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TMI Blog2015 (10) TMI 2183X X X X Extracts X X X X X X X X Extracts X X X X ..... e nature of business of buying and selling shares, he could as well have expressed such opinion in the assessment order and taxed the income accordingly. By no stretch of imagination, could it be stated that on account of failure on the part of the assessee to disclose full and true material facts, he came to erroneous conclusion and accepted the assessee's stand that the income was in the nature of capital gain. To reiterate, during the original assessment in response to various queries raised by the Assessing Officer, the assessee made full disclosures. Full facts were thus before the Assessing Officer to ascertain whether the income was in the nature of business income or capital gain. He having taken a particular view, reopening beyond the period of four years would not be permissible. - Decided in favour of assessee. - Special Civil Application No.1896 of 2014 - - - Dated:- 22-4-2014 - AKIL KURESHI AND MS. SONIA GOKANI, JJ. Tushar P. Hemani and Ms. Vaibhavi K. Parikh for the Petitioner Nitin K. Mehta for the Respondent JUDGMENT Akil Kureshi, J. Rule Mr. Nitin Mehta, learned counsel, waives service of notice of Rule on behalf of respondent. 2. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrutiny. The petitioner contended inter alia that there was no failure on his part to disclose fully and truly all material facts for assessment. Further that the petitioner had no permanent establishment in India. He was a resident of Kenya and as per DTAA between India and Kenya, the petitioner's business income even in India cannot be taxed in India, but only in Kenya. 4. The Assessing Officer disposed of such objections by an order dated December 26, 2013. He referred to three instances where, according to him, during assessment there was no full and true disclosures by the assessee, which read as under : 3. So far as failure on your part in furnishing the information during the assessment proceedings is concerned, it is seen that vide notice u/s.142(1) of the Act dated 29.12.2008, you were asked to provide the details of all the share transactions with the help of bank account and DEMAT account as mentioned in point No.6. In response, vide letter dated 09.02.2009 you have submitted copy of only one share trading account with ICICI direct.com running page No.2 to 69 of the aforesaid submission. It is a well known fact that ICICI direct.com itself is a share broker. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16, 2009, accepting the assessee's stand that the income from sale of shares was capital gain and not business income. (ii) Any attempt on the part of the Assessing Officer at this stage now to tax the said income as business income would be mere change of opinion. (iii) In the reasons recorded, there is no allegation that any income chargeable to tax had escaped assessment due to the failure on the part of the assessee to disclose fully and truly all the material facts. The reasons, in fact, demonstrate that the Assessing Officer has formed such a belief from the material on record itself. 7. On the other hand, the learned counsel Shri Nitin Mehta for the Revenue opposed the petition contending that : (i) In response to the queries raised by the Assessing Officer during the assessment, the assessee gave replies, which were not fully correct. There was, thus, failure to disclose full facts. (ii) On account of such failure on the part of the assessee, the Assessing Officer in the original assessment taxed the income as capital gain, whereas the transactions entered into by the assessee would reveal that he was engaged in the business of selling and buying shares. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of the order dated December 16, 2013 rejecting the objections of the petitioner in which the Assessing Officer had pointed out three instances of failure of true and full disclosure. In brief, they are : (i) The assessee was asked to provide details of all share transactions, with supporting bank accounts and demat account. In response to such question, the assessee had only submitted a copy of one share trading account with ICICI Bank and did not furnish any details of demant account with any share depository or trading account with any other share broker, except ICICI. (ii) The assessee had stated that he was carrying out share transactions through share broker namely Ford Brothers Capital Services Ltd. and Bhavik Rajesh Khandhar Share and Stock Brokers Pvt. Ltd., but had not produced a copy of the trading account with the said two share brokers. (iii) The transactions mentioned in the Journal are not recorded in the share trading account provided by the assessee with the ICICI. 12. Bearing in mind these allegations of non-disclosure, we may peruse the queries raised by the Assessing Officer during the original assessment proceedings and the replies and documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and relevant period. Books of accounts for the relevant period are produced herewith. xxx xxx xxx 16 Produce the stock register of the scrips/ items traded by you with the cost price, tax fees, duty, cess if any levied/ palid thereon. 70-84 Assessee does not maintain any stock register. However, ledger account and bills of purchases provide the quantity details of purchases and sales of securities. The copy of journal register is attached herewith wherein the transactions of purchase and sell of shares entered during the year under consideration are mentioned along with description of various charges like brokerage, del. buy chgs., Security charges, service tax, STT etc. - 22 Provide Stock positions of shares, stocks, debentures, bonds, if any dealt by you in the year under consideration. 145-150 The details are attached herewith. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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