Rikin Industries Vs ITO (Gujarat High Court)
Gujarat High Court held that reopening of assessment is based on change of opinion since exact entry which was already scrutinised and accepted by department during scrutiny assessment. Accordingly, re-opening u/s. 148 is liable to be quashed.
Facts- The Petitioner entered into certain transactions in Futures & Options which resulted into loss of Rs.67,72,832/- and such loss is duly reflected in the Profit & Loss account. The case of the Petitioner was selected for scrutiny assessment. AO, while framing the assessment vide order dated 18.03.2016 under section 143(3) of the Act, consciously chose not to make any addition in respect of such loss on account of F&O transactions in view of details and explanation furnished by the Petitioner.
Thereafter, the Respondent issued the impugned notice dated 30.03.2021 u/s. 148 of the Act seeking to reopen the case of the Petitioner for the year under consideration. As an outcome of enquiry/perusal and analysis of details available on record, it was noticed that the genuineness of such transactions remained unproved. In view of the same, the Respondent has reason to believe that income of Rs.67,66,600/- has escaped assessment. Hence, the case has been reopened.
The Petitioner, vide letter dated 06.09.2021, raised objections against reopening. In view of the same, the Respondent was requested to drop the reassessment proceedings. The Respondent, vide order dated 15.12.2021, disposed off such objections and, inter-alia, held that reopening is justified.
