SHRI YOGESH KIRCHAND SHAH,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-3(2), AHMEDABAD

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ITA 1168/AHD/2015Status: DisposedITAT Ahmedabad29 November 2017AY 2008-093 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that reopening the assessment was not justified as the Assessing Officer had already examined the share transactions and the assessee's submissions during the original assessment. No fresh material had come to light, and the lack of a detailed order by the AO did not warrant reopening.

What were the facts?

The original assessment was completed accepting the returned income. Subsequently, the assessment was reopened under section 148 based on the belief that the assessee had bifurcated income from share transactions to reduce tax liability. The assessee objected to the reopening, arguing that all aspects were considered in the original assessment.

What were the issues?

The primary issue was the validity of reopening the assessment under Section 147 when the Assessing Officer had already considered the relevant issues during the original assessment under Section 143(3) without any new material.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD SMC BENCH, AHMEDABAD

I.T.A. No.1168/Ahd/2015 Assessment Year: 2008-09 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD SMC BENCH, AHMEDABAD [Coram: Pramod Kumar AM] I.T.A. No.1168/Ahd/2015 Assessment Year: 2008-09 Yogesh Kirchand Shah, .......…………...........Appellant 1182/1, Opp. Ghanchi-ni-pole, MG Haveli Road, Manekchowk, Ahmedabad – 380 001. [PAN : AEDPS 4653 L] Vs. Income tax Officer, Ward – 3(2), Ahmedabad. ............................Respondent Appearances by: Arti N. Shah for the appellant Santosh Karnani for the respondent Date of concluding the hearing: 20.11.2017 Date of pronouncing the order: 29.11.2017 O R D E R 1. By way of this appeal, the assessee appellant has challenged correctness of the order dated 2nd March, 2015 passed by the ld. CIT(A) in the matter of assessment under section 143(3) of the Income Tax Act, 1961 (‘the Act’ hereinafter) for the assessment year 2008-09. 2. In the first ground of appeal, the assessee has raised the following grievance: “1. The Learned Commissioner of Income Tax (Appeals)-10, Ahmedabad has erred in law and on facts of the case in confirming the legality of issue of notice u/s.147 of the I.T. Act by the Assessing Officer though the original assessment was carried out u/s.143(3) of the I.T. Act, 1961.”

3.

The relevant material facts are like this. Assessment under section 143(3) of the Act was originally completed on 03.11.2010 accepting the returned

I.T.A. No.1168/Ahd/2015 Assessment Year: 2008-09 Page 2 of 3 income. Subsequently, however, the assessment was reopened by issuance of notice under section 148 on 29.05.2012. The reasons for reopening the assessment were stated to be as follows :- “The assessee is engaged business of Trading in Shares and also income from LTCG and STCG on sale of shares. The assessee filed return of income on 29.09.2008 declaring Loss of Rs.2,78,1837-. And also shown STCG of Rs.42,79,066/- and exempt LTCG of 27,65,699/- on sale of shares. Further, on verification of form no.10DB it reviles that the assessee had done all types of share transaction as under. Rs. 1,84,14,493 (Actual delivery) 1. Sale of Shares Rs. 93,86,962 (Actual delivery) 2. Purchase of Shares 3. Sale of shares Rs. 11,94,583 (Without Actual delivery) 4. Sale of derivatives Rs. 1,84,14,493 (Without Actual delivery) 5. Purchase of shares Rs. 98,86,963 (Without Actual delivery) The assessee has shown LTCG and STCG on first two type of transaction as investment and in respect of other types of transaction the assessee has shown as his business income. Considering the volume and nature of transactions, the income from LTCG and STCG is to be treated as business income and it clearly indicate that the bifurcation of income has been done to reduce the tax liability. This has resulted into under assessment to the tune of Rs.70,44,765/-. In view of the above, I am satisfied that income chargeable to tax has escape assessment the above extent within the meaning of Explanation 2(c) to section 147 of the IT Act and it is a fit case for reopening the assessment. Issue notice u/s 148 of the IT Act.”

4.

The assessee did raise objections against the said reopening but without any success. As regards the assessee’s contention that all these aspects were duly considered by the Assessing Officer at the assessment stage, while submissions having been filed, on these issues, was not doubted, it was stated hat “there is no reference in the assessment order that the Assessing Officer has taken cognisance of the submissions of the assessee”. Aggrieved, assessee carried this issue in appeal but without any success. The assessee is not satisfied and is in second appeal before me. 5. I have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of applicable legal position. 6. I have noted that, beyond any dispute or controversy, the transactions relating to long term capital gain and short term capital gain were duly examined by the Assessing Officer, and the assessee made elaborate submissions on these issues – copies of which are also placed before me in paper book. There is also no dispute that no fresh material, which was not before the Assessing

I.T.A. No.1168/Ahd/2015 Assessment Year: 2008-09 Page 3 of 3 Officer at the original assessment stage, has come to light now. In these circumstances, I am of the considered view that it was certainly not a fit case for reopening the assessment merely because the Assessing Officer has not written a detailed order analysing the stand of the assessee. I, therefore, quash the impugned reassessment proceedings.

7.

In the result, the appeal is allowed. Pronounced in the open court today on the 29th day of November, 2017. Sd/- Pramod Kumar (Accountant Member) Dated: Ahmedabad, the 29th day of November, 2017. PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) DR (6) Guard File By order

Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad

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