Pushpa Uttamchand Mehta Vs ITO (Gujarat High Court)
The Gujarat High Court considered a writ petition challenging a notice dated 08.03.2019 issued under Section 148 of the Income-tax Act and the order dated 28.11.2019 rejecting the assessee’s objections for reopening the assessment for AY 2012-13. The assessee had originally filed her return declaring income from interest, dividends and agricultural income, while claiming exempt long-term capital gains of ₹11,43,900 under Section 10(38) from sale of shares of Unisys Softwares and Holding Industries Ltd. The assessment was completed under Section 143(3) on 05.02.2015 by accepting the returned income.
Subsequently, the Assessing Officer received information from the ADIT (System) that the assessee had claimed exempt long-term capital gains from transactions in the penny stock of Unisys Softwares and Holding Industries Ltd. The recorded reasons stated that investigations, including enquiries by the Directorate of Investigation, Kolkata and analysis of BSE trading data, indicated that the company’s shares had been artificially manipulated to generate bogus exempt long-term capital gains, short-term capital losses and business losses. The reasons further recorded that the assessee had purchased the shares in January 2010 and sold them in June 2011, claiming exempt capital gains of ₹11,43,900, and referred to the statement recorded under Section 132(4) of one of the company’s directors admitting involvement in providing accommodation entries through multiple companies. On this basis, the Assessing Officer formed the belief that income had escaped assessment.
