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TMI Blog2024 (3) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... 73 of the Act was a subject matter of consideration during the assessment proceedings, also cannot be disputed. This is because in the order rejecting Petitioner s objections, there is an admission that Section 73 of the Act was discussed during the assessment proceedings. Moreover, in the letter dated 29th February 2016, Assessee has elaborately discussed as to why Section 73 of the Act is not applicable. In fact, in the said letter even the explanation of Section 73(4) of the Act has also been extracted. Therefore, it is clear that the applicability of Section 73 of the Act was a subject of consideration during the assessment proceedings and as held by Aroni Commercials Limited ( 2014 (2) TMI 659 - BOMBAY HIGH COURT ), once a query is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The return of income for the A.Y. 2013-14 was e-filed on 29.11.2013 declaring total loss at (-) Rs. 44,72,95,065/-. The assessment was finalized u/s 143(3) of the Act on 23.3.2016 by assessing total loss at (-) Rs. 39,74,03,230/-. 2. As per explanation of section 73 of the Income Tax Act, 1961, where a company other than a company whose gross total income consists mainly of income chargeable under the heads Interest on securities , Income from House property , Capital Gains and Income from other sources engaged in the business of purchase and sale of shares of other companies, shall be deemed to be carrying on a speculation business to the extent to which the business consists of the purchase and sale of such shares. Further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 15/07/2021. 4. Ms. Hariya submitted, at the outset, that since a notice under Section 148 of the Act dated 30th March 2021 was issued after the expiry of four years from the end of relevant assessment year and assessment under Section 143(3) of the Act has already been completed, the proviso to Section 147 of the Act shall apply inasmuch as reopening is not permissible unless there has been failure on the part of Assessee to truly and fully disclose the material facts necessary for assessment. Ms. Hariya submitted that there is not even an allegation in the reasons recorded that there was any failure on the part of Petitioner to truly and fully disclose all material facts necessary for its assessment for the relevant assessment year, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elied upon copy of a letter dated 29th February 2016 in which in the last paragraph it is recorded as under : So in the light the above facts and various judicial pronouncements, it is submitted that the assessee has rightly consider the loss in derivatives as well as share business loss as normal business loss and in this case Section 73 of the Income Tax Act is not applicable. 6. Therefore, the submission of Mr. Sharma that there is no discussion in the assessment order regarding paragraph 73, cannot be accepted in view of the judgment of this Court in Aroni Commercials Limited Vs. Deputy Commissioner of Income Tax 2(1) (2014) 44 taxmann.com 304 (Bombay)., wherein it is held that once a query is raised during the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot raised during the hearings conducted during the assessment proceedings, why would an Assessee refer to the applicability of Section 73 of the Act. Ms. Hariya submitted that almost nine hearings took place before the assessment order dated 23rd March 2016 was passed. Even after the letter dated 29th February 2016 was submitted during the hearing on 29th February 2016, two more hearings took place and the AO did not question Assessee as to why he has referred to Section 73 of the Act when it is not even discussed. On this we would agree with Ms. Hariya that an Assessee would not have referred to applicability of Section 73 of the Act in the letter dated 29th February 2016 unless a query was raised during the assessment proceedings. 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs and Assessee has replied to it, it follows that the query raised was a subject of consideration of the AO while completing the assessment and it is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. It would, therefore, follow that the reopening of assessment is merely based on the basis of change of opinion which does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment. 12. Moreover, as held in Indian and Eastern Newspaper Society Vs. Commissioner of Income Tax 119 ITR 996 SC., the Income Tax Officer must determine for himself what is the effect and consequence of the law mentioned in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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