Case Law Details
Zaveri And Company Private Limited Vs DCIT (Gujarat High Court)
The Assessing Officer has sought to reopen the assessment for A.Y. 2012-13 of the petitioner on the basis of fresh material having been received as a result of the search made by the Office of DDIT (Inv.) Unit-1(3), Ahmedabad conducted on 11.09.2018 at the premises of Sanjay Shah and Jignesh Shah of Ahmedabad, and as a result of the investigation carried out during the search proceedings conducted by the office of Pr. DIT (Inv.), Unit-2, Mumbai on 19.03.2019 at the premises of Naresh Jain and his associates at Bombay that the petitioner company was one of the beneficiaries of the accommodation entries as the petitioner had entered into the transactions in penny stock namely Dhvanil Chemicals Ltd. / Veronica Production Ltd., which companies were used for bogus LTCG and contrived losses. The Assessing Officer had also received specific information from the said investigating wings outlining the systemic evasion of taxes by the petitioner and others, and had therefore reason to believe that the petitioner had sold scrips to Veronica Production Limited / Dhvanil Chemicals Ltd., which were penny stock to the extent of Rs. 97,13,809/- during financial year 2011-12.
Such satisfaction arrived at by the Assessing Officer being subjective in nature and based on the fresh material for coming to the prima facie conclusion that the petitioner had failed to disclose fully and truly all material facts necessary for his assessment for the A.Y. 2012-13, it could not be said that the respondent had initiated the proceedings under section 147 of the Act on the basis of incorrect facts or on the basis of borrowed belief of the Investigation Wings at Ahmedabad and Mumbai, as sought to be submitted by the learned advocate Mr. R.K. Patel for the petitioner.
The Court also does not agree with the submission made by the learned advocate Mr. Patel that the respondent could not have reopened the assessment of the petitioner under section 147/148 of the said Act after the scrutiny assessment having been undertaken by the Assessing Officer under section 143(3) of the said Act for the A.Y. 2012-13.
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