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TMI Blog2009 (3) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... e i/by Mr. A.K. Jasani for the petitioner. Mr. Suresh Kumar, Advocate for the respondents. JUDGMENT The judgment of the court was delivered by J.P. DEVADHAR, J. - Heard. Rule. Rule returnable forthwith. by consent of parties, the writ petition is taken up for final hearing. 2. In this petition, the petitioner has challenged the notice issued under Section 148 of the Income Tax Act, 1961 ('Act' for short). By the said notice dated 27-3-2008, the assessment for assessment year 2001-02 is sought to be reopened. 3. The petitioner is carrying on business of purchase / sale of shares on behalf of its customers as a sub-broker. 4. In the assessment year 2001-02, the petitioner had inter alia entered into two transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee on 11-1-2005 by the ADIT (Inv.)-II(3), Mumbai. The survey was conducted to verify the genuineness of share trading transactions undertaken by the assessee for M/s. Camelot Enterprises Pvt. Ltd. between 20-01-2001 to 2-2-2001, by which M/s.Camelot Enterprises Pvt. Ltd. had generated speculative profit of Rs.1,32,96,109/-. On verification of records and transactions made by the assessee, it was found that M/s. Camelot Enterprises Pvt. Ltd. had earned speculation profit on sale and purchase of shares of Zee Tele films Ltd. at Rs.1,32,96,109/- from the following two transactions with M/s. Bang Securities Pvt. Ltd. The said shares were purchased by the assessee from the brokers M/s. Nirmal Bank Securities Pvt. Ltd. and M/s. Bang E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to M/s. Palombee Securities Pvt. Ltd. in respect of clients introduced by it. However, it is seen that no introduction fees have been paid by M/s. Bang Securities Pvt. Ltd. to M/s. Palombee Securities Pvt. Ltd. in respect of introduction of M/s. Camelot Enterprises Pvt. Ltd. As a result of survey following points were noticed which proved that the transactions made by the assessee with M/s. Camelot Enterprises Pvt. Ltd. were fictitious; and thereby the assessee has transferred the profit of Rs.1,32,96,109/- arising to it to M/s. Camelot Enterprises Pvt. Ltd. (i) These are the two settlements where M/s. Camelot Enterprises Pvt. Ltd. has dealt with M/s. Bang Securities Pvt. Ltd. No transactions prior to or after the said period were t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ratio fixed by the Hon'ble Supreme Court in the case of Mcdowell Co . 154 ITR 148 is applicable in the case of the assessee. The Hon'ble Supreme Court has held that colorable devices can not be part of the tax planning and it is wrong to encourage avoidance of tax by dubious methods. Here in this case the assessee has transferred the profit arising to it to another entity by restoring to colorable devices. An order u/s.143(3) of the I.T. Act was passed in the case of the assessee on 18-12-2003 determining loss Rs.11,68,69,750/-. In view of the facts discussed above it is clear that the assessee has failed to disclose fully and truly all material facts necessary for its assessment, and the assessee has transferred the speculation prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat income chargeable to tax has escaped assessment nor a ground to hold that the petitioner has failed to disclose fully and truly all material facts. Similarly, the fact that the petitioner has not charged margin money, the fact that Camelot is the only customer of the petitioner where such huge profit is shown in a particular settlement, the fact that the volume of shares dealt by the petitioner as a sub-broker in the case in question is very high and the fact that in both these transactions there are only profits and no loss cannot be a ground to infer that income chargeable to tax has escaped assessment. 11. Moreover, from the aforesaid facts it cannot even remotely be considered that the declaration made by the petitioner was fals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce was placed by the counsel for the revenue on the decision of the Apex Court in the case of ACIT V/s. Rajesh Jhaveri Stock Brokers P. Limited reported in 291 ITR 500 (S.C.). In our opinion that decision has no application in the facts of the present case, because in that case the assessment was made under Section 143(1) and the notice under Section 148 of the Act was issued within four years from the end of the relevant assessment year. In the present case assessment was made under Section 143(3) and the notice under Section 148 of the Act is issued beyond four years from the end of relevant assessment year. Moreover, from the reasons recorded for reopening of the assessment it cannot even remotely be considered that there is any f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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