The Gujarat High Court dismissed the Writ petition since the reopening of the assessment was based on material evidence which proves income escapement.
Akshat Pramodkumar Chaudhary, the petitioner challenged a notice under Section 148 of the Income Tax Act, 1961, for the assessment year 2012-13 seeking to quash the same. The assessee received income from business and profession and interest income for the year 2012-13. The assessee also received proceeds from the sale of a share of Twenty-First Century (I) Limited. The assessee filed its return of income for the assessment year 201213, by declaring gross total income at Rs.16,56,922/-.
The respondent authority issued a notice under section 148 of the Act for re-assessing the income of the petitioner. The assessee objected to the re-opening of the assessment. The respondent rejected the objections raised by the petitioner by observing that the information received from Investigation Wing related to penny scrips in which various beneficiaries had transacted. The report was received from the Investigation Wing, Kolkata along with the detailed investigation report of penny scrips, relevant details, and a list of beneficiaries.
The assessee has traded in penny scrips of M/s. Twenty-First Century (I) Limited for an amount of Rs.6,49,000/- during the financial year 2011-12. As per the investigation carried out as regards scrip, it was established that the said scrip proved to be penny scrip and trading in the same having utilized by the beneficiaries in accommodation entries.
It was found that the purchase of shares of Twenty-First Century (I) Limited was before more than 7 years and the income tax returns were submitted and accepted without scrutiny. Hence, there is no question of doubting the purchase of the shares of the company. He has also submitted that the assessee has been dealing with different securities for many years.
A two-judge bench comprising Justice N V Anjaria and Justice Devan M Desai observed “that the Assessing Officer has heard the material on record which would prima facie suggest that the assessee had sold several shares of a company that was found to be indulging in providing bogus claim of long term and short term capital gain. The company was prima facie and was found to be a shell company. The assessee had claimed exemption of long-term capital gain of Rs.1.33 crores by way of sale of share of such company.”
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