SANATKUMAR JAYANTILAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) FOR the assessment year 1968 -69, the assessee - Sanatkumar Jayantilal - filed a return of income which included capital gains on long -term basis in respect of the sale of 10,000 shares of Indian Iron and Steel Company Limited and 324 shares of Kohinoor Mills Limited. The net capital gains declared as on long -term was Rs. 31,941. The Income -tax Officer accepted the working of capital gains on long -term while passing the assessment order under section 143(3) of the Income -tax Act, 1961.

(2.) FOR the assessment year 1969 -70, the assessee submitted a return of income mentioning therein that there were long -term capital gains in respect of 120 shares of Belapur Company Limited. The Income -tax Officer passed an assessment order accepting the contention of the assessee that there were long -term capital gains of Rs. 2,643 as disclosed by the assessee.

(3.) AFTER considering the objections including the objection with regard to the jurisdiction under section 147(a) of the Act raised by the assessee, the Income -tax Officer decided that on sale of the bonus shares, tax is required to be worked out on the basis of short -term capital gains. The appeals against the reassessment orders were dismissed by the Commissioner of Income -tax (Appeals). In the appeal filed by the assessee, the Tribunal arrived at the conclusion that primary or material facts omitted from the income -tax returns were that the shares which were sold were bonus shares which were acquired within the period of 12 months or 24 months before the sale. The Tribunal, therefore, held that the Income -tax Officer was well within his jurisdiction to reopen the two assessments. On the merits, the Tribunal relied upon the decision of this court in the case of CIT v. Chunilal Khushaldas : [1974]93ITR369(Guj) and dismissed the appeal filed by the assessee.