IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 2412 of 2023 FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE BHARGAV D. KARIA and HONOURABLE MR. JUSTICE PRANAV TRIVEDI ==========================================================

Approved for Reporting Yes No ==========================================================

MITA ASHISH DESAI Versus THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 3(1)(1), AHMEDABAD ==========================================================

Appearance:

MR. TUSHAR HEMANI, SENIOR ADVOCATE WITH MS VAIBHAVI K PARIKH(3238) for the Petitioner(s) No. 1 MS MAITHILI D MEHTA, SENIOR STANDING COUNSEL for the Respondent(s) No. 1 ==========================================================

CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA and HONOURABLE MR. JUSTICE PRANAV TRIVEDI Date : 23/09/2025

ORAL JUDGMENT

(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)

1 Heard learned Senior Advocate Mr. Tushar Hemani with learned advocate Ms Vaibhavi K. Parikh for the petitioner and learned Senior Standing Counsel Ms.Maithili Mehta for the respondents

2. Rule, returnable forthwith. Learned Senior Standing Counsel Ms.Maithili Mehta waives service of notice of rule for and on behalf of the respondents.

3. By this petition Article 226 of the Constitution of India, the petitioner has challenged the notice dated 30^th June, 2022 issued under Section 148 of the Income Tax Act, 1961 (for short the Act) for Assessment Year 2017-18.

4 Brief facts of the petition are as follows:-

4.1 The petitioner filed return of income for the year under consideration on 29.06.2017 declaring a total income at Rs.1,46,14,640/- disclosing the Short Term Capital Gains on sale of shares of Kushal Tradelink Limited and paid the tax on such Short Term Capital Gains.

4.2 Thereafter, the impugned notice was issued for re- opening. The Assessing Officer reopened assessment on the basis of information from a search under sec.132 on Kushal Group, which revealed incriminating documents showing evidences of cash transactions entered into by Kushal Group providing bogus Long Term Capital Gain/loss or Short Term Capital Gain/Loss. The respondent-Assessing Officer issued notice under Sec.148A(b) on 23.05.2022 and has recorded the following reasons:

“ On perusal and analysis of the information, it is found that the assessee had sold 148000 quantity of shares of Kushal Limited during the FY 2016-17 relevant to AY 2017-18 for Rs. 5,69,46,750 and booked profit of Rs. 56,21,939. In the return of income, the assessee has shown short term capital gain of Rs. 1,04,41,675 on sale of equity shares/ mutual funds. The profit earned by the assessee through Kushal Scrip is result of manipulation in price of the Kushal scrip done by Ashish Panalal Shah. Therefore, profit/STCG earned by the assessee to the extent of Rs. 56,21,939 is bogus STCG. On the basis of the information it is inferable that the assessee has introduced his unaccounted income into books of accounts in the form of bogus STCG Profit without paying due taxes. Therefore, STCG claimed by assessee to the extent of Rs. 56,21,939 cannot be treated as genuine STCG. Bogus STCG amounting to Rs. 56,21,939 is required to be treated as undisclosed income of the assessee from urexplained sources.”

4.3 The petitioner filed her objections on 27.05.2022 before the respondent Assessing Officer contending that the petitioner has duly disclosed the transactions carried out for purchase and sale of the shares of Kushal Tradelink Limited in the books of accounts and tax showing the short term capital gain is arising out of such transactions and there is no long term capital gains earned by the individual during the year under consideration.

4.4. The Assessing Officer has thereafter passed order under Sec.148A(d) dated 30.06.2022 for re-opening and has observed as under:

"The submission filed by the assessee has been duly considered and the same is not found acceptable. On perusal of the submission of the assessee, it is found that