SUMMIT COMMUNICATIONS PRIVATE LIMITED,HYDERABAD vs. ASSISTANT COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE -8, HYDERABAD

Brief facts of the case for the disposal of this appeal are that a search and seizure operation was conducted at the premises of the assessee and others and consequent thereto the assessment was completed by order dated 30.12.2011 u/s 143(3) r.w.s. 153C of the Act determining the income of the assessee at Rs.33,73,38,552/- by making certain additions. Subsequently, it was noticed by the learned Assessing Officer that while passing the order, the short-term capital gains were calculated after allowing indexation on acquisition of shares by mistake and, therefore, after issuing notice u/s 154, the learned Assessing Officer assessed the income at Rs.34,04,89,166/- by adding a sum of Rs.31,50,614/- towards indexation already allowed but now withdrawn.

When the assessee preferred appeal against the order passed by the learned Assessing Officer u/s 154 of the Act, learned CIT (A), after considering the submissions of the assessee in the light of the material available on record, did not agree with the contentions of the assessee and dismissed the same by way of the impugned order.

Hence assessee preferred this appeal on various grounds stating that the assessee held the shares as long-term assets, the assessee derived long term capital loss on the sale of shares and disallowance indexation cost of acquisition of shares for the purpose of calculation of the capital gains is bad in law. According to the assessee, the assessee was in possession of the shares for a period of two years deriving long term gains/loss and since the issue are debatable one, exercise of jurisdiction u/s 154 of the Act is not sustainable.