PRABHAT AGARWAL Vs. DEPUTY COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The writ petitioner (hereafter"assessee" is aggrieved by a reassessment notice issued to him, under Section 147/148 of the Income Tax Act, 1961, by the respondent (hereafter "revenue") on 25th May 2007, for the assessment year (AY) 2004-05; he seeks directions for the quashing of that notice.

(2.) Briefly, the case relates to assessment for AY 2004-05; the assessee had filed his original return of income on 25/10/2004 declaring Rs. 18,00,16,650/- including income of Rs. 60,00,000/- chargeable at normal rates and the balance from long term capital gains. The income from capital gain was further divided: into two parts, i.e., one from sale of units of various mutual funds-(36 in: number) and second from sale of bonus shares' of M/s Terra Network SA, USA. The sale of shares of Terra Nova SA resulted in long term capital gain of Rs. 18,50,96,372/- but after claiming losses and B/F losses the net income offered to tax was Rs. 6,84,31,075/-. The losses claimed were in respect of two transactions; sale of shares of M/s Parsec Technology and on account of sale of mutual fund units.

(3.) On 25th May, 2007, the AO issued the impugned notice, proposing to reassess the petitioner's income. After repeated requests, the "reasons to believe" recorded by the AO were furnished to the assessee; they inter alia, read as follows: