INCOME TAX ACT, 1961

Section 148

Reassessment - Notice under section 148 - Reason to believe - Tangible information in the form of various reports of investigation also backed by SEBI report

Assessee-company filed its return of income fort the year 2009 declaring an income of Rs. 52,131. It was processed under section 143(1) subsequently information was received from DIT(Inv). in respect of certain share brokers involved in the practice of client code modification whereby beneficiary client who had taken contrived losses and shifted out profits during financial year 2008-09 relevant to assessment year 2-009-10. Assessee-company was also involved in such practice and was one of the beneficiary which had reduced its income due to client code modification amounting to Rs. 1,34,760 through one broker namely M/s. Crimson Financial Services Ltd. Accordingly, AO issued notice under section 148 so as to reopen assessment. Assessee challenged this on the ground that AO had not brought on record any corroborative material, any information other than report of investigation Department for reopening of assessment and, therefore, reopening of assessment made merely on the basis of borrowed satisfaction was bad-in-law.Held: AO had tangible information in the form of various reports of investigation, which was also backed by SEBI report. There was no assessment of income of the assessee under section 148(3) prior to issue of notice under section 148 and there was a derivative loss booked by assessee. Such loss was not genuine as per those reports. Accordingly, reopening was not bad.

REFERRED :

FAVOUR : Against the assessee's.

A.Y. : 2009-10

INCOME TAX ACT, 1961

Section ?????

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