KAMALCHAND NATHMAL LUNIA Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS is an appeal filed by the assessee arising from the order of learned CIT(A) -I, Surat dated 17.12.2012. The main ground contested before us is reproduced below: "I. Reopening of the assessment: (1) The Assessing Officer erred in reopening of assessment when valid conditions for the reopening were not satisfied. (2) The appellant submits that reopening was also not justified because instead of the Assessing Officer recording his satisfaction, he initiated action at the behest of DIT (Investigation), Surat. (3) The appellant further submits that the Assessing Officer having taken his decision based on the decision of the DIT, the Assessing Officer ought to have been provided with the copy of the report. (4) On the facts and circumstances of the case and as per law, the learned Commissioner of Income -tax (Appeals) ought to have held that the reopening was not validly initiated. "

(2.) FACTS in brief as emerged from the corresponding assessment order passed u/s. 143(3) r.w.s. 147 of IT Act, dated 30th of December, 2011 were that the AO has received information that a search u/s.132 was carried out in the case of M/s. Mahasagar Securities Pvt. Ltd. In that case a statement of one Sri Mukesh Choksi was recorded u/s.132(4) of IT Act. He had admitted that the said company was engaged in providing bogus speculation profit/loss, as well as commodities profit/loss. Pursuant to the said information a notice u/s.148 was issued on 23rd of March, 2011. Reasons were recorded and duly communicated to the assessee, for the sake of completeness reproduced below: "REASONS FOR ISSUE OF NOTICE U/S. 148 OF THE I. T. ACTASSESSMENT FOR A. Y.2005 -06 : In this case, the assessee has filed return of income declaring total income at Rs.88,695/ - on 13.02.2006. The assessee had during the A.Y. 200506 relevant to F.Y. 2004 -05 has shown the share profit of Rs. 4,05,576/ -. The transaction of share has been carried out by the assessee with Alliance Intel. Mediateries and network Pvt. Ltd. In the return of income he has claimed the said long term capital gain exampled u/s. 10(38) of the I.T. Act. As per the information received from the DIT(Inv.), Surat, in the case of the assessee had sold the share of Rs. 4,80,035/ -. During the search and seizure action u/s. 132 of the I.T. Act undertaken in the case of M/s. Mahasagar Securities Pvt. Ltd. it has been revealed that the Mahasagar Securities Pvt. Ltd. its related group company, out of which ones being M/s. Alliance Intel. Mediateries and network Pvt. Ltd. from whom theassessee has sold the shares of various companies. On verification of the return of income filed, the assessee has sold the following shares of the various companies as on 28.02.2005 vide Bill No. CC/2005/039/5 dated 28.02.2005. Sr. No. Name of the company No of Share Amount Channel Guide 3400 Rs. 39,950/ - 2 Broadban Ltd. 17000 Rs. 65,200/ -

(3.) D . Karuna Cable 12500 Rs. 2,89,605/ -