INCOME TAX ACT, 1961

Section 147

Reassessment - Reason to believe - AO sought to reopen on the same set of information available already during original assessment -

AO reopened assessment on the reasoning that assessee had converted its investment held in shares amounting to Rs. 1,84,93,52,185 into stock-in-trade and declared a long-term capital gain of Rs. 98,07,816 on such conversion which it set off against short-term capital loss incurred by it. Subsequently, assessee sold these shares which are stock-in-trade and incurred a loss Rs. 1,25,05,47,463, which it treated as business loss. According to AO, assessee was eligible to treat the loss incurred by the assessee as long-term capital loss and not as business loss and further gross total income of assessee was a loss of which 99% loss was due to sales/purchases of other business shares. Therefore, it was speculation loss which could not be allowed as business loss as allowed during original assessment. Assessee's case was that all the relevant details were before AO during original assessment. Held: Records clearly indicated that all the information of conversion of shares into stock-in-trade was brought to notice of AO during original assessment itself and AO had verified the same. Therefore, reopening of assessment on the same set of information was nothing but mere change of opinion and, therefore, could not be upheld.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2009-10

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