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TMI Blog2024 (2) TMI 1513X X X X Extracts X X X X X X X X Extracts X X X X ..... the consequent order passed u/s 147/143 (3) of the Act ought to be held to be bad in law. c) For that on the facts and in the circumstances of the case, the Ld. CIT(A) ought to have held that the A.O did not satisfy the conditions precedent for reopening of assessment and for recording the reasons to form belief that income chargeable to tax had escaped assessment and for that reason the notice issued u/s 148 and the consequent order framed thereto was bad in law and deserves to be quashed. 2. a) For that on the facts and circumstances of the case and without prejudice to the above, the Ld. CIT(A) erred in disposing of the appeal on merits ex-parte without affording sufficient opportunity of being heard. b) For that on the facts and circumstances of the case and without prejudice to the above, the lower authorities erred in disallowing the loss of Rs. 60,88,040/- incurred upon sale of shares while computing the taxable income. 3. For that the appellant craves leave to submit additional grounds and/or amend or alter the grounds already taken either at the time of hearing of the appeal or before." 3. A perusal of the above reproduced grounds of appeal would reveal that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the script of M/s Nivyah Infrastructure and Telecom Services Limited by the assessee was Rs. 19,43,028/- during the F.Y 2011-12. Simply on this information, he held that he had reasons to believe that the income of the assessee has escaped assessment for the assessment year under consideration amounting to Rs. 19,43,028/-. The Assessing Officer also noted that since four years have passed and the escaped amount was more than Rs. 1,00,000/-, therefore, the permission of the ld. PCIT was taken for reopening of the assessment. In response to the said reasons, the assessee filed objections, wherein, it was categorically pleaded that the assessee did not transact with the shares of M/s Nivyah Infrastructure and Telecom Services Limited and in fact the assessee had traded earlier in the case of M/s SV Electric which later on changed to M/s Nivyah Infrastructure and Telecom Services Limited. It was also brought to the knowledge of the Assessing Officer that the information mentioned by the Assessing Officer in the reasons recorded was not correct as the assessee did not earn any longterm capital gains, rather, the assessee has incurred loss in transaction of the said shares. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. The Hon'ble Bombay High Court also held that since the Assessing Officer has not applied his mind to the information received in the context of the facts on record, therefore, the notice issued u/s 148 of the Act was also bad in law and therefore, the Hon'ble Bombay High Court quashed the notice and assessment framed u/s 148 of the Act. 5.1 The ld. counsel has further invited our attention to the decision of the Coordinate bench of the Tribunal in the case of "M/s Samridhi Stocks Pvt. Ltd. vs. ITO" in ITA No.552/Kol/2023 order dated 08.08.2023, wherein, under similar facts and circumstances, where the loss was incurred by the assessee on account of trading in shares of M/s SV Electric, however, the assessment was reopened based on information that the assessee had earned long-term capital gains by sale of shares of M/s Nivyah Infrastructure and Telecom Services Limited. The Coordinate Kolkata Bench of the Tribunal vide order dated 08.08.2023 has held that the reopening of the assessment as bad in law. The relevant part of the order of the Coordinate Bench of the Tribunal is reproduced as under: "We also note that the scrip of S.V. Electricals Ltd. was converted into M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t period do not show any substantial change so as to support such huge share price movement. The company does not have business worth while to justify the sharp rise in market price of shares. The sharp rise in market price of this entity is not supported by the fundamentals of the company. Both purchase and sale of the shares are concentrated within few person/entities. 2.2. The DDIT (Inv) has traded in the above script namely M/s Nivyah Infrastructure & Telecom Services Ltd during the F.Y. 2010-11 to the tune of Rs. 35040000000000000000. 2.3. The DDIT (Inv) Unit - 8 (3) Mumbai has given a finding that enquiries have been conducted in the penny scrip namely M/s Nivyah Infrastructure & Telecom Services Ltd vis-a-vis facilitating introduction of unaccounted income of members of beneficiaries in the form of exempt Capital gain or Short term Capital Loss in their books of account. These transactions are mostly in view of cash of equal amount and commission is charged over and above at certain fixed percentage for providing such accommodation entry. These accommodation entries were taken from various beneficiaries for introducing their unaccounted cash into their books of accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en submitted during the regular assessment proceedings. The objections primarily proceeds on the basis, that the reasons as recorded, display total nonapplication of mind while forming reason to believe, this as during the relevant time, there was no company by the name "M/s Nivyah Infrastructure and Telecom Services Ltd" in which the petitioner could have dealt. The petitioner's objections were rejected by the Assessing Officer by passing an order on 28.9.2018. The order on objections, does not deal with the petitioner's primary contentions that the petitioner had not dealt with any company by name "M/s Nivyah Infrastructure and Telecom Services Ltd" during the period relevant to the subject assessment. This order dated 28.9.2018 disposing of the objections is completely silent on the above objections while RNG 5/7 5-wp3398.18 rejecting the petitioner's objections. 6. The respondent's Assessing Officer has filed an affidavit-in reply dated 5.2.2019 of the Assessing Officer. However, the reply does not deal with this objection taken in the petition. Nevertheless, Mr. Suresh Kumar the learned counsel for the revenue submits that all these issues will be subject of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise were to be done, it is likely that the Assessing Officer would have come to the conclusion that there was no failure to disclose truly and fully all material facts necessary for assessment. Thus, hit by the proviso to section 147 of the Act. However, the Assessing Officer has not applied his mind to the information received in the context of the facts on record. The impugned notice is bad-in-law, as it has not been issued by the Assessing Officer on his satisfaction that there is reason to believe, that income chargeable to tax has escaped assessment. 9. In the above circumstances, the impugned notice is un- sustainable in law and therefore, is quashed and set aside." Since the facts of instant case before us are substantially similar, we, therefore respectfully following the decision of Hon'ble Bombay High Court quash the reopening of assessment and also the consequent order framed u/s 147 / 143(3) of the Act." 6. The facts and issue involved are squarely covered by the above referred to two decisions and the ld. DR has not brought any distinguishing fact or legal proposition before us, therefore, respectfully following the decision of the Hon'ble Bombay High Court and a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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