Reassessment proceedings must be based on fresh tangible material and not a mere change of opinion.

JUDGMENT

Dhiraj Singh Thakur, J. - The petitioner challenges the notice under section 148 of the Income Tax Act, 1961 ('the Act') dated 30th March 2022 as also the order of assessment dated 22nd March 2022 passed under section 147 read with section 144/144B of the Act as bad and illegal and in excess of jurisdiction.

2. Briefly stated the material facts as under :

2.1 The petitioner fled its return of income for the assessment year 2014-15. The return was processed under section 143(3) of the Act by the Assessing Offcer ('AO'). The issues pertaining to the petitioner's investment in NCL Research and Financial Limited were gone into, which investment was found to be bogus by the AO leading to an addition of Rs.27,27,657/-. It needs to be stated that the assessee had claimed in its return that it had purchased 2000 shares in a non-listed company, NCL Research and Financial Limited for a consideration of Rs.3,58,343/- and within a period of two years, had sold the same for a consideration of Rs.30,86,000/-.

2.2 The AO in its order, dated 22nd March 2022 held as under :

"13 Mr.Narendra Kumar Jain has stated in his statement that he took cash from the beneficiaries which after passing through a multiple layers of concerns controlled by him, was returned by cheques through brokers in the form of sale price of shares to the beneficiaries of the accommodation entry. The value of consideration claim is Rs.30,86,000/- whereas the cost of purchase paid by assessee is Rs.3,58,343/- which is given by cheque to show the purchases as genuine purchases. The sale price received as accommodation entry is nothing but the return of amount in lieu of cash that the assessee would have paid to hawala operators over and above Rs.3,58,343/- paid by the assessee by cheque at the time of purchase of penny stock in FY.

14. Therefore, a sum of Rs.27,27,657/- represents the unexplained investment made by the assessee in cash to obtain the equivalent amount as bogus profit on sale of shares. Alternatively, it can also be concluded that the sum of Rs.27,27,657/- is taxable to income of the assessee and not in nature of capital gain. Penalty proceedings u/s.271(1)(c) are initiated as the assessee has furnished inaccurate particulars of its income.

3. A notice under section 148 dated 30th March 2021 came to be issued by the AO seeking to reopen the assessment for the said assessment year 2014-15 on the ground that income chargeable to tax had escaped assessment within the meaning of section 147 of the Act.

4. Reasons supplied to the petitioner for the reopening of the assessment read as under :

Brief details of the assessee :

The assessee filed its return of income for the AY 2014-15 on 30.09.2014 declaring total income of Rs.9,65,850/-. Scrutiny assessment u/s 143(3) of the Income Tax Act, 1961 was completed on 28/12/2016 assessing total income at Rs.37,08,293/-.

Brief details of information collected by the AO :

It is seen from the assessment record that assessee has purchased shares of the scrip NCL Research & Financial Ltd. For Rs.3,58,343/- and later sold it for a consideration of Rs.30,86,000/-. The assessee has claimed in the return of income long term capital gain as exempt income u/s.10(38) to the tune of Rs.27,15,475/-.

3 Analysis of information collected :

It was held in the assessment order that the entire transaction of purchase and sale of shares of the scrip 'M/s. NCL Research & Financial Ltd' was part of accommodation entry and represents the unexplained investment made by the assessee in cash to obtain the equivalent amount as bogus profit on sale of shares. Therefore, the long term capital gain was held as unexplained investment/income from other sources and not in the nature of capital gain as claimed by the assessee.

Findings of the AO :

Since it was held in the assessment made that the entire transaction was part of accommodation entry, the entire sale consideration of Rs.30,86,000/- ought to have been held as unexplained investment/income from other sour