Case Law Details
Brief of the case
In Mohan Jhangiani vs ACIT, Kolkata Tribunal held that Non-consideration of the relevant provisions of the Act while forming a belief that income has escaped assessment is not permissible as per law. Further, the assumption of jurisdiction u/s 147 by the Learned AO is based only on change of opinion and made without any tangible material on record, hence the reopening of assessment u/s 148 and consequential reassessment order passed u/s 147 is bad in law.
Fact of the Case
The assessee was a shareholder and director in two companies namely PAN Services Pvt Ltd and Cemcoat India Pvt Ltd. The said companies choose to avail the easy exit scheme brought out by the Ministry of Corporate Affairs in view of no running business operations. The Companies went into liquidation in accordance with the provision of the Companies Act, 1956 and shares held by the assessee got extinguished. Admittedly, no consideration was paid by the companies to the shareholder and accordingly the assessee claimed the long term capital loss duly indexed amounting to Rs. 3,48,579/- to be eligible to be carried forward to subsequent years. The detailed workings of the same had been filed along with the return of income by the assessee. The Assessment was completed u/s 143(3) of the Act accepting the income returned. No finding was given in the said assessment order with regard to examination of the veracity of the long term capital loss claimed by the assessee and with regard to the eligibility of the same to be carried forward to subsequent years. Later this assessment was sought to be reopened by issuance of notice u/s 148 of the Act and loss claim by the assessee disallowed by the A.O which was upheld by the Learned CIT(A). Aggrieved, the assessee filed appeal before Tribunal.
Contention of Assessee
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