Loonchand Dhanraj HUF Vs ACIT (Gujarat High Court)
Summary: The Gujarat High Court allowed the writ petition filed by Loonchand Dhanraj HUF and quashed the notice dated 29.03.2019 issued under Section 148 of the Income-tax Act, 1961 for Assessment Year (AY) 2012-13, along with the order dated 04.10.2019 disposing of the petitioner’s objections to reopening the assessment. The Court held that the reassessment was founded on the self-same issue concerning shares of Prissm Remedies Pvt. Ltd. which had already been examined during the original scrutiny assessment and therefore amounted to a mere change of opinion.
The petitioner had filed its return of income for AY 2012-13 on 22.09.2012 declaring total income of Rs.21,32,370/- and subsequently filed a revised return on 31.03.2014. The return disclosed details of shares in Prissm Remedies Pvt. Ltd. under “Income From Short Term Capital Gain”, while the audit report disclosed 3,10,000 equity shares invested in that company and 3,10,000 equity shares sold during the same year.
The return was subjected to scrutiny assessment under Section 143(3) of the Act. A notice under Section 142(1) read with Section 129 was issued on 09.10.2014, specifically calling upon the petitioner to furnish information concerning the purchase and sale of shares and securities of Prissm Remedies Pvt. Ltd. The Assessing Officer subsequently sought further details concerning the transactions, valuation of shares, premium issued, minutes of Board meetings, valuation reports and Board resolutions relating to bonus shares.
