Case Law Details
DCIT Vs Ramesh Kumar Jain (ITAT Mumbai)
ITAT Mumbai held that reopening of assessment under section 147 of the Income Tax Act based on information received by AO from DDIT (investigation) justified subject to fulfilment of conditions as envisaged u/s 147/148.
Facts- On the basis of information received from DGIT (Investigation) that the assessee has traded in penny stock scrip M/s. Global Capital Market Ltd, and has sold shares worth Rs.53,60,000, proceedings u/s. 147 of the Act were initiated and notice u/s. 148 of the Act was issued. On the basis of the aforesaid information, it was alleged that the assessee is a beneficiary of the tax-exempt bogus long term capital gains through the above scrip and thus the income chargeable to tax amounting to Rs.53,60,000, has escaped assessment in the meaning of section 147 of the Act.
During the reassessment proceedings, statutory notices u/s. 143(2) as well as Section 142(1) of the Act were issued and served on the assessee, requesting the assessee to explain as to why the sale of shares of M/s Global Capital Market Ltd should not be treated as bogus and as to why the amount of Rs.53,60,000, should not be added to the total income of the assessee. In response thereto, the assessee submitted that the sale consideration received by the assessee from the sale of scrip of M/s.Global Capital Market Ltd is genuine.
Rejecting the submission, AO held that since the enquiries conducted by the Directorate of Investigation has established that the above scrips a penny scrips, the entire sale consideration of Rs.53,60,000, was considered as unexplained cash credit u/s. 68 of the Act and added to the total income of the assessee. AO also made an addition of 3% of the aforesaid sum u/s. 69C of the Act being commission paid in such transaction.
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