Mita Ashish Desai Vs DCIT (Gujarat High Court)
The Gujarat High Court considered a writ petition filed under Article 226 of the Constitution of India challenging a notice dated 30 June 2022 issued under Section 148 of the Income Tax Act, 1961, seeking to reopen the assessment for Assessment Year 2017–18.
The petitioner had filed her return of income on 29 June 2017, declaring total income of ₹1,46,14,640. The return disclosed short-term capital gains arising from the sale of shares of Kushal Tradelink Limited, and tax on such gains was duly paid.
Subsequently, the Assessing Officer initiated reassessment proceedings based on information allegedly received from a search conducted under Section 132 in the case of the Kushal Group. According to the reasons recorded, the search revealed incriminating documents indicating cash transactions and accommodation entries providing bogus long-term or short-term capital gains or losses. On this basis, a notice under Section 148A(b) dated 23 May 2022 was issued to the petitioner.
In the reasons recorded, the Assessing Officer noted that the petitioner had sold 1,48,000 shares of Kushal Tradelink Limited during the financial year 2016–17 for ₹5,69,46,750 and had booked a profit of ₹56,21,939. It was alleged that this profit was the result of price manipulation in the Kushal scrip and that the short-term capital gain of ₹56,21,939 was bogus. The Assessing Officer concluded that the petitioner had introduced unaccounted income in the form of bogus short-term capital gains and that such income had escaped assessment.
