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TMI Blog2024 (2) TMI 469X X X X Extracts X X X X X X X X Extracts X X X X ..... nd truly all material facts necessary for assessment' have been used in the reasons recorded, those have been used only to get over the fetters placed by the proviso to Section 147 of the Act. Therefore, it is absolutely clear that the entire basis for forming a reason to believe there was escapement of income is from the records filed by Petitioner with return of income. It is a clear case of change of opinion which does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment. After admitting that the issues involved as noted in the reasons for reopening were examined at the time of original assessment proceedings, it is stated that the factual error came to the notice of the AO subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Officer. The Court held that the duty of the assessee is to disclose fully and truly all primary relevant facts and it does extend beyond that. We are satisfied that there has been no failure on the part of assessee to truly and fully disclose primary facts. Therefore, Rule made absolute - K. R. SHRIRAM KAMAL KHATA, JJ. For the Petitioners : Dr. K. Shivaram, Senior Advocate, with Mr. Rahul Hakani. For the Respondents : Mr. Suresh Kumar. ORAL JUDGMENT:- (PER K.R. SHRIRAM, J.) 1. By consent, Petition taken up for hearing at the stage of admission itself. Therefore, Rule. Rule made returnable forthwith. 2. Petitioner is in the business of shares and stock broking. Petitioner is challenging the action of Respondent No. 1 of issuing notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reasons recorded would show that there has been no failure on the part of Petitioner to truly and fully disclose material facts. Though the words failure on the part of assessee to disclose fully and truly all material facts necessary for assessment' have been used in the reasons recorded, those have been used only to get over the fetters placed by the proviso to Section 147 of the Act. The reasons for reopening read as under: The assesse has filed return of income for A.Y. 2015-16 on 29/09/2015 declaring income of Rs. NIL. The assessment u/s. 143(3) of the Act was completed on 14/12/2017 determining total income at Rs. 58,96,900/-. 2.1 It was noticed from P L A/c that assessee has debited Rs. 35,87,05,815/- exceptional item stating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be annulled. Assessee has made appeal to SAT for relief but after hearing the SAT has ordered that the appeal does not succeed. 2.3 As the above trade and transaction was not validated and not considered as regular business transaction either by NSE or by SAT and hence for income tax purpose also the loss arises out of it is required to be treated as not generated from regular business transaction. Hence, the loss was required to be treated as speculation loss in the AY 2013-14 and not to be allowed to be set off against business income of the current year. Incorrect allowance of set off of losses resulted in under assessment of income of Rs. 35,87,05,815/-. 3.1 Further, it was noticed that the business income of Rs. 17,66,31,378 has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ward business loss . Paragraph 3.1 of the reasons, it says Further it was noticed that the business income ...has been arrived which was set off fully from business loss .. . Paragraph 3.2 of the reasons, it says .............It was however noticed .in the computation for normal income ., the same was also required to be considered for computation for MAT, which was not done. .and that loss was debited in books for MAT as exceptional item........,which may not be allowable . 7. Therefore, it is absolutely clear that the entire basis for forming a reason to believe there was escapement of income is from the records filed by Petitioner with return of income. 8. Moreover, admittedly, as stated in the affidavit in reply filed by one Keshav M. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. If from primary facts, more inferences than one could be drawn, it would not be possible to say that the assessee should have drawn any particular inference and communicated it to the assessing authority. The Court held, Explanation to the sub-section has nothing to do with inferences and deals only with the question whether primary material facts not disclosed could still be said to be constructively disclosed on the ground that with due diligence the Income-tax Officer could have discovered them from the facts actually disclosed. The Explanation has not the effect of enlarging the section, by casting a duty on the assessee to disclose inferences to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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