Citation:
ITAT, Delhi "B" Bench in the case of
Captive Commerce (P) Ltd. vs. ACIT, Central Circle-26, New Delhi.

Issue:
An assessment completed u/s 143(3) reopened u/s 147 on the basis of vague and non descript reasons.

Assessment Year: 2011-12

Date of Order: 9.8.2023

Facts:

(1) Assessment was completed u/s 143(3).

(2) Reassessment proceedings initiated to charge a sum of Rs.41,48,008/- as escaped income.

(3) Reassessment was initiated to hold loss from stock market as fictitious on the basis of modus operendi adopted by certain brokers  and stock market players.

ITAT Held
Notice u/s 148 was quashed and reassessment set aside.

Law relied upon:
Supreme Court in the case of 
*Lakhmani Mewal Dass (1976) 103 ITR 437 (SC)*.


Ratios of law:

(1) A completed assessment cannot be reopened merely on the basis of reason to suspect.

(2) Reason to suspect is not Reason to believe.

(3) Belief has been formed merely on the basis of modus operendi without any reference of specific transaction and broker.

(4) belief has been formed merely on the charge of transfer of loss on the basis of client code modification without any reference to any broker.

(5) This belief of escapement has been formed on the basis of vague reasons, which is not permitted.

(6) Mere reiteration of statury language of section 147 is not by itself adequate.

(7) Vague feeling and suspecion of AO would not permit reopening of completed assessment.

(8) Doubt and suspicion of escapement, though worded reason to believe cannot form reason to believe in terms of section 148(2).

 Regards.
🙏Rajiv