9911796707
TMI Blog2024 (10) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... ch document and/or relevant portion their of must be enclosed along with the reasons. In the present case what information is available with the AO is neither stated nor enclosed with the reasons so recorded by him and thus not discernible from the reasons so recorded. Therefore reasons recorded by the AO are found to be not in accordance with law. Another factual mistake wherein the AO has incorrectly mentioned while disposing the objection of the Assessee that assessee has not declared the long term capital gain in the return filed in response to notice u/s 148 whereas in this return assessee has categorically shown exempt Income comprising of capital gain exempt u/s 10(38) and dividend from shares. Thus notice issued under section 148 and the consequent order passed under section 147 is illegal and bad in law and the same stands quashed - Decided in favour of assessee. - Hon ble Shri Sandeep Gosain, Judicial Member For the Assessee : Shri P.C. Parwal, CA For the Revenue : Shri Gautam Singh Choudhary, JCIT-DR ORDER PER: SANDEEP GOSAIN, JM This appeal filed by the assessee is directed against order of the ld. CIT(A) dated 28-02-2024, National Faceless Appeal Centre, Delhi [ here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of information received from DDIT(Inv.), Unit-1(3), Ahmedabad. Neither the order of SEBI nor the statement of Jignesh Shah and Umang Shah was provided along with the reasons recorded nor there is any affirmation that Sh. Jignesh Shah and Umang Shah has admitted that assessee has taken any accommodation entry in the scrip of Parikh Herbals Ltd./ Safal Herbs Ltd. through them. The company is a listed stock exchange company having registered office at A-66, IInd Floor, Gurunanakpura, Vikas Marg, Laxmi Nagar, East Delhi as available on the MCA site and therefore the statement of Jignesh Shah that the company does not exist at its address has no basis. The AO has not made any independent enquiry to ascertain the existence of the company before issuing notice u/s 148. Thus the issuance of notice is solely on the basis of information received and not on the basis of any independent examination by the AO. Hence issuance of notice u/s 148 is illegal bad in law. Reliance in this connection is placed on the following cases:- B.U. Bhandari Autolines (P.) Ltd. Vs. ACIT (2023) 292 Taxman 195 (Bombay) (HC) Where AO issued a reopening notice on ground that an information was received that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try of bogus long-term capital gains at platform of Calcutta Stock Exchange and basis the same the AO recorded the reasons to believe that income of the assessee has escaped assessment. What information is available with the AO is neither stated nor enclosed with the reasons so recorded by him and thus not discernible from the reasons so recorded. Mere fact that the assessee sold certain shares with certain value on the stock exchange cannot by itself be held as tangible material. Further the AO has not just recorded a reason to believe rather recorded a conclusive finding that assessee is involved in manage trading of penny stock to convert his undisclosed income into exempt income. AO has to record reasons as to why the transaction reflected in the return of income and claimed exempt is liable for taxation which has escaped assessment and such reasons to believe must be based on tangible material. Whole exercise shows a predetermined mind on the part of the AO to issue notice u/s 148 and complete lack of application of mind. AO has simply relied upon the report and conclusion drawn upon by Investigation Wing without carrying out any preliminary enquiry and investigation and estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion received from other source, there cannot be any reassessment for the verification. 3. It is submitted that the AO has incorrectly mentioned while disposing the objection of assessee that assessee has not declared the long term capital gain in the return filed in response to notice u/s 148 whereas in this return assessee has shown exempt income of Rs. 9,30,821/- comprising of capital gain exempt u/s 10(38) at Rs. 9,29,292/- and dividend from shares at Rs. 1529/-. Further Ld. CIT(A) while upholding the notice issued u/s 148 has referred to various decisions but all these decisions are on different facts or are in different context. In view of above, notice issued u/s 148 and the consequent order passed u/s 147 is illegal bad in law and the same be quashed. 2.6 On the contrary ld DR appearing on behalf of the department relied upon the orders passed by the revenue authorities. It was also submitted that the assessee had purchased the shares on 29th April 2011 but the shares were received in Demat account only on 08.08.2012 and the shares were sold on the very next day i.e. 09. 08.2012 and which is self explanatory that the whole transaction in Penny script is pre-planned. 2.7 I h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. through them. The company is a listed stock exchange company having registered office at A-66, IInd Floor, Gurunanakpura, Vikas Marg, Laxmi Nagar, East Delhi as available on the MCA site and therefore the statement of Jignesh Shah that the company does not exist at its address has no basis. The AO has not made any independent enquiry to ascertain the existence of the company before issuing notice u/s 148. Thus the issuance of notice is solely on the basis of information received and not on the basis of any independent examination by the AO. Hence issuance of notice u/s 148 is illegal bad in law. 2.8 After having gone through the facts and also appreciating the arguments put forth before me I am of the considered view that in case if the reopening is based on information received from the investigation wing then in that eventuality the reasons must show that the AO independently applied his mind to the information and formed his own opinion. The AO in the reasons in the present case has just stated the information received and his conclusion about the alleged escapement of income but he has not mentioned anywhere as to what the AO did with the information made available to him i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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