9911796707
TMI Blog2024 (5) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... s has not been set off against any income or has been carried forward by the assessee. So there was no benefit to the assessee on this transaction which can lead to any inference that assessee must have engaged in some clandestine bogus entry for some benefit. There is no co-relation between the reasons recorded and the addition which has been made by the ld. AO. If ld. AO had such a belief during the course of assessment proceedings, he could have recorded the reasons on investment made in the purchase of shares. Thus, there is no link between the information and the reasons recorded and the assessment which has been made by the ld. AO. It is sine-qua-non that for reopening the assessment, AO should have reason to believe that income charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndated in section 147 of the Act. The AO erred in assuming jurisdiction without having any valid reason to believe that income chargeable to tax had escaped assessment and recorded his reasons merely on surmises and conjectures. The AO has incorrectly alleged that the Appellant had earned bogus long term capital gains of Rs. Rs. 1,18,39,977/- when in fact that Appellant had earned a loss of Rs. 1,52,551/- on the sale of share of EINS Edutech Limited (Apalya Creations Ltd.). Accordingly, it is submitted that the notice issued under section 148 dated 13-09-2016 was issued without jurisdiction and consequentially, the assessment order dated 22-12-2017, based on such a notice is also bad in law and liable to be set aside. 2. The Ld. National Fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s persons, recorded during the said investigation. 4. Information received from KOLKATA Investigation Directorate, that assessee has obtained accommodation entries of bogus Long Term capital Gain through trading in EINS Edutech Ltd., one of the Penny stock company for sales consideration of Rs. 3,35,51,000/-and claimed Long Term Capital Gain of Rs. 1,18,39,977, as exempt income. The assessee's income is not subject to scrutiny assessment u/s. 143(3) of the Act, for the year under consideration and I have reasons to believe that the income of the assessee has escaped assessment within the meaning of Explanation (b) of Sec. 147 of the I.T. Act. 4. The ld. AO noted that assessee had shown long term capital gain of Rs. 1,18,39,977/- in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital gain / short term capital gain and short term capital loss and assessee could not furnish the payment proof and corresponding banking entries and accordingly, he treated the amount of Rs. 3,36,70,000/- cost of purchase of shares as unexplained investment. The ld. CIT (A) has confirmed the order of the ld. AO holding that assessee could not explain the source of investment observing as under:- 10. During the course of appeal, several notices were issued. On every occasion, the appellant filed the same reply that was furnished before CIT (A)-38, Mumbai discussed above. This was only submitted in their reply dated 11.09.2023. 11. In view of the above, it is unambiguously proved that the appellant did not have any known source of income fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 1,52,551/- in trading of EINS Edutech Ltd., which was not claimed in the return of income, because assessee had filed belated return and could not have been claimed the benefit of short term capital loss. Nowhere in the reasons there is any whisper about source of investment in the purchase of shares of EINS Edutech Ltd., The reasons have been taken on an entirely different ground and the assessment has been framed entirely on a different reasoning. Thus, the very foundation of jurisdiction of the ld. AO in incorrect and accordingly, the proceeding of reopening u/s. 147 itself is invalid. 7. On the other hand, ld. DR submitted that here in this case there is no dispute that assessee had sold the shares of EINS Edutech Ltd., at Rs. 3,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ech Ltd., which is an allegation made in third para that assessee had obtained long term entry of bogus long term capital gain in trading of these shares. The assessee had duly disclosed the long term capital gain of Rs. 1,18,39,977 on sale of different scrip, Bhageria Dye Chem Ltd altogether which is neither a penny stock nor any finding has been given by the ld. AO on this scrip. Thus, very premise on which ld. AO has assumed the jurisdiction and material information on record has no live link nexus with the income escaping assessment. The reasons mentions trading in EINS Edutech Ltd., for a consideration of Rs. 3,35,51,000/- on which assessee has earned long term capital gain of Rs. 1,18,39,977/- which has been claimed as exempt income, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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