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TMI Blog2024 (2) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... should have first layed his hands on the Income tax return filed by the assessee and then should have examined the information vis- -vis the computation of income furnished and then has to form the belief that income subject to tax has escaped assessment. Now, in the income tax return assessee has disclosed long term capital gain, but AO in the reasons recorded has mentioned short term capital gain/loss which means that he was not sure of the transactions for which the reopening is carried out. Further, AO has mentioned the figure as long term capital gain/short term capital loss. This observation is also factually incorrect because the sum is merely a sale consideration and exempt income u/s 10(38) of the Act has been claimed and it is a case of long term capital gain and not short term capital loss. The above factual observation clearly indicates that the AO has not made application of mind for re-opening the case of the assessee after four years as the assessee has furnished all the details of the alleged transactions in its income tax return. It is also evident that the AO has not adhered to the standard operating procedures framed by the CBDT to record the reasons for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013-14 Details of the Assessing officer having jurisdiction over the assessee I.T.O Ward-29(4), Kolkata Aayakar Bhawan/4th Floor, 2, Gariahat Road South, Kolkata-700068 Information has been received from the A.D.I.T (Inv), Unit-l(l), Kolkata vide letter No. DDIT(Inv)/Unit-1(l)/Kolkata/2019-20/8005-5879-40458 dated 06.03.2020 that M/s Nectar Dealtrade Pvt. Ltd., M/s Moonview Vintrade Pvt. Ltd. and M/s Snowhill Dealtade Ltd. are struck off companies. They were maintaining accounts with ICICI Bank. On analysis of the bank statement it has been found that there has been lots of cross transaction in these bank accounts. There has been credit in these bank accounts mostly by way of transfers, RTGS credit and debit mostly by way of RTGS, Transfers. It has also been noticed that the entire fund coming into the bank accounts of the above mentioned entities are transferred out to sundry concerns immediately which clearly indicates that these accounts have been used only for layering purpose and the funds subsequently reaches to the main/beneficiary concerns. Submissions have been received from M/s Anugrah Stock Brok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from the end of the assessment year under consideration. Hence necessary sanction to issue notice u/s 148 has been obtained separately from Principal Commissioner of Income Tax as per provisions of section 151 of the Act. 4. Referring to the above reasons it was submitted by the ld. Counsel for the assessee that, ld. Assessing Officer has acted only on the information and without believing that the income has escaped, has only referred to the bogus long term capital gain/short term capital loss and the sale consideration. Referring to the judgment of this Tribunal in the case of Jai Prakash Gupta vs. ITO in ITA No.2142/Kol/2019 A.Y. 2013-14; order dt. 18/06/2021 and also referring to the standard operating procedures for recording satisfaction for reopening assessment u/s 147 of the Act issued by the CBDT vide its internal directive No. 247/140/2017-A PC-1 dated 10/01/18, it was claimed that the legal requirement to reopen the assessment i.e., reason to believe that income chargeable to tax has escaped assessment, has not been satisfied. Therefore, notice u/s 148 of the Act issued for reopening the assessment, is bad in law and subsequently, all the actions taken by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill contain summary of findings of the AO on the basis of analysis of information received/collected/found by the AO and the result of follow up enquiries made by the AO. 5th paragraph: It will include 'basis of reason to believe' along with nature and quantum of income escaping assessment. The AO will draw link between the findings and reasons to believe and will also give a categorical finding that reason to believe is based on his/her application of mind on the facts and information received/collected/found and it is not a case of change in opinion. 7th paragraph: It will give detail and instances along .with corroborative material to prove that the assessee had not disclosed full and truly all material facts necessary for his assessment or that the facts of the case are covered by the Explanation 1 to section 147 of the Act. This paragraph shall be included only in the cases where scrutiny assessment has been made and four years from the end of the relevant year had expired. 8th paragraph: This paragraph is required in cases involving income in relation to any assets (including financial interest in any entity) located outside India which is chargeable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med by the CBDT to record the reasons for re-opening. Under such circumstances, as there is no independent application of mind by the ld. Assessing Officer which forms the basis of reason to believe that income has escaped assessment then such reopening of assessments is merely on borrowed satisfaction. This Tribunal in the case of Jai Prakash Gupta (supra) dealing with similar issue of reopening on the basis of information about the bogus long term capital gain has held as follows:- 12. Relying on the aforesaid decision of Hon'ble Courts it is clear that in the instant case the AO has simply reproduced the information from DIT(Inv) that since the assessee has transacted in this financial year in the scrip of M/s Essar India, the LTCG claim is bogus; and the AO while recording the reason concluded that by doing the said transaction there was an escapement of income of Rs. 5,55,624/- whereas when the assessment order was framed the AO has found that assessee has made LTCG of Rs. 9,70,583/-. It has to be borne in mind that when the AO got adverse information from the DIT(Inv) as a prudent and responsible officer, the AO should have made preliminary enquiry and collected mate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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