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TMI Blog2018 (2) TMI 1162X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had made respective claims. When therefore the Assessing Officer was seeking to reopen the assessment beyond a period of four years from the end of the relevant assessment year, the question of failure on part of the assessee to disclose truly and fully all material facts for such assessment was an important aspect. Ignoring such additional requirement flowing from section 147 the Assessing Officer issued the impugned notice. There being no element of failure on part of the assessee to disclose true and full facts, the impugned notice could not have been issued. - Decided in favour of assessee - Special Civil Application No. 17450 of 2017 - - - Dated:- 14-2-2018 - MR. AKIL KURESHI, J. For The Petitioner : Mr B S Soparkar, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le of the shares so converted. The said conversion is as per the provisions of section 45(2) which explains the accounting treatment at the time of converting investment into stock in trade. The said effected was given in the accounts for all years i.e. from A.Y. 2009-10 to A.Y. 2012-13. On sale of shares of relevant conversion during each year, the resultant loss was claimed as realized loss and debited in the Profit and loss account. The realized actual business loss was worked out as under:- A.Y. 2009-10 ₹ 19,87,428/- A.Y. 2010-11 ₹ 2,99,32,344/- A.Y. 2011-12 ₹ 22,39,695/- A.Y. 2012-13 ₹ 71,76,435/- It was held in the Hon'ble Supreme Court in the case of Shri Kikabhai P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me u/s. 10(34/35) of the Act amounting to ₹ 23,18,511/-. The assessee had disallowed the expenditure relatable to the exempt income though it had incurred even direct expenditure i.e. Security transaction tax on investment (Rs. 80,911/-) etc. Thus, the disallowance of expenses pertaining to earn exempt income was required to be disallow u/s. 14A of the Act. The omission to disallow the same has resulted into underassessment of ₹ 5,06,225/- which resulted into short levy of tax of ₹ 2,06,479/- including interest. ( 4) In view of the above facts I have reason to believe that the above income chargeable to tax has escaped from assessment. Thus, the case needs to be reopened by issuing notice u/s. 148 of the I.T.Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord which led the Assessing Officer to form such a belief. On both counts thus, there was clear and ample material on the basis of which the assessee had made respective claims. When therefore the Assessing Officer was seeking to reopen the assessment beyond a period of four years from the end of the relevant assessment year, the question of failure on part of the assessee to disclose truly and fully all material facts for such assessment was an important aspect. Ignoring such additional requirement flowing from section 147 of the Act, the Assessing Officer issued the impugned notice. There being no element of failure on part of the assessee to disclose true and full facts, the impugned notice could not have been issued. To reiterate, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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