ORDER : (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. Heard learned advocate Mr.S.N.Divatia for the petitioner and learned Senior Standing Counsel Mr.Varun K.Patel for the respondent no.1. 2. Rule returnable forthwith. Learned Senior Standing Counsel Mr.Varun K.Patel waives service of notice of rule on behalf of respondent no.1. 3. By this petition under Article 226 of the Constitution of India the petitioner has prayed for the following reliefs: “(a) to issue a writ of certiorari or in the nature of certiorari or any other appropriate writ, orders or directions quashing and setting aside the impugned notice dated 30-03-2021 [Annex.-A] issued by the Respondent proposing to reopen the completed assessment of the Petitioner for A.Y. 2017-18 as well as the order of objection dt. 10.11.2021 (Annex.-B) as well as the reassessment order, if any passed in consequence to the impugned notice. (b) to call for the records of the proceedings, look into them and be pleased to issue a writ of certiorari or any other appropriate writ, order or direction quashing the impugned notice as well as the order of objection dt. 10.11.2021 (Annex.-B). (c) Pending the hearing and final disposal of this petition to maintain status quo in the matter and ask the Respondent and its subordinates not to take any action or to do anything in furtherance and pursuance of this impugned notice. (d) To allow this Petition with cost. (e) To pass any further or other orders as the Hon'ble Court may deem proper in the interest of justice and in the circumstances of the case.” 4. The brief facts of the case are as under: 4.1. The petitioner is a closely held company engaged in the business of trading of cement, steel and commission agent. For the Assessment Year 2017–18, the petitioner filed original return declaring total income of Rs. 52,08,790/- on 30.10.2017. 4.2. The return of income filed by the petitioner was subjected to limited scrutiny under Section 143(2) of the Income Tax Act, 1961 (for short “the Act”) dated 08.08.2018 followed by notice under Section 142(1) of the Act seeking information from the petitioner for various details documents etc. related to Short Term Capital Gains declared by the petitioner in the return of income. 4.3. related to Short Term Capital Gains declared by the petitioner in the return of income. 4.3. The Assessing Officer completed regular assessment under Section 143(3) of the Act on 30.11.2019 after considering the explanation in detail furnished by the petitioner including the Short Term Capital Gains and Long Term Capital Gains transactions and assessed the income and determined the total income by making addition under Section 14(A) of the Act of Rs.3,54,514/- for Rs.55,63,304/-. The Assessing Officer however determined the books profit as per Section 115JB of the Act at Rs.2,04,69,726/- and adding disallowance of Rs.3,54,514/- assessed Book profit at Rs.2,08,24,240/-. 4.4. The respondent-Assessing Officer thereafter issued impugned notice under Section 148 of the Act for Assessment Year 2017-18 on 30.03.2021 proposing to reassess the total income on the ground that share price of Kushal Ltd. were rigged without supportive financials and fundamentals to provide bogus accommodation entry in the form of Long Term Capital Gains/ Short Term Capital Gains/ loss and thus the petitioner is indulged into non-genuine gain amounting to Rs.67,56,951/- which had escaped assessment. 4.5. In response to the impugned notice, the petitioner filed return of income on 14.04.2021 and sought the copy of the reasons recorded which were provided by the respondent Assessing Officer along with letter dated 19.05.2021. The reasons recorded which reads as under: “Reasons for reopening the assessment in the case of M/s. AIRAN LIMITED for A.Y.2017-18 u/s 147 of the I.T. Act. 1. Brief facts of the case: The assessee filed its return of income for the A.Y.2017-18 on 30.10.2017 declaring total income at Rs.52,08,790/-. Assessment u/s. 143(3) was completed on 30.11.2019 by determining total income at Rs. 55,63,304 /-. 2. Brief details of information received: In this case, information has been received on Insight Portal in March 2021. On verification of the share price movement of Kushal Limited carried out on money-control, it is noticed that the share price of Kushal Tradelink Private Limited was raised from Rs. 2 on 03.09.2015 to Rs. 469/- on 13.02.2017. The details of share price movement of Kushal Tradelink Private Limited is as under. 5. Findings of the AO: During course of search and survey action on Kushal group, various evidences have been found and seized from independent premises which proves that cash has been paid by the beneficiaries of bogus Capital Gain in Kushal Scrip. Such evidences are discussed in detail in below paras. 5. Findings of the AO: During course of search and survey action on Kushal group, various evidences have been found and seized from independent premises which proves that cash has been paid by the beneficiaries of bogus Capital Gain in Kushal Scrip. Such evidences are discussed in detail in below paras. As evident from the above files in photographs; There is clear noting of the cash transactions by Kushal group against providing bogus LTCG benefits to beneficiaries. Rate of commission i.e.ltg charges and the amount received by Kushal group are clearly noted in these sheets. Detailed investment plan of the beneficiaries, details of their exit, price at which beneficiaries have to exit etc are also systemically recorded in these sheets. Such record contains clear plan of taking undue benefits of bogus LTCG provisions of the Act to willfully evade tax. Cash sharing ratio i.e. 30%, 50% etc is also clearly noted in these sheets. Details of the beneficiaries along with details of their share transactions are also systemically recorded in these sheets. There is also clear noting of cash received by Kushal group and middleman persons. Some transactions are made through Angadia also. There are also noting of RTGS transactions against these cash transactions. These records are systematic, actual and contains corresponding cash transactions against bogus LTCG benefits provided to the beneficiaries. It may not be out of place to mention that SEBI has passed Adjudication Order No. RA/JP/250- 254/2017 dated 22.12.2017 in which it had clearly identified persons who involved in synchronized share trading in Kushal scrip. It has been established that Kushal group members have been found involved in manipulating securities capital market to help the beneficiaries to convert their ill-gotten gains into tax exempt bogus LTCG. After analysis of the information with the facts available on record, it can be concluded that the assessee has indulged in generating non genuine gain amounting to Rs 67,56,951/- by trading in Kushal scrip on the BSE during the year under consideration. The trades carried out by the assessee in scrip are non-genuine. Therefore, it is clear that the gain has been arisen by trading in Kushal scrip is not a genuine. Therefore, an amount of Rs. 67,56,951/- has escaped assessment and the same is required to be brought to tax. The trades carried out by the assessee in scrip are non-genuine. Therefore, it is clear that the gain has been arisen by trading in Kushal scrip is not a genuine. Therefore, an amount of Rs. 67,56,951/- has escaped assessment and the same is required to be brought to tax. Hence, I have reasons to believe that there is an escapement of income from tax of Rs.67,56,951/- and it is a fit case for issuing notice u/s. 148 of the Act.” 4.6. The petitioner on receipt of the above reasons recorded for reopening, filed objections on 15.07.2021 which were rejected by the respondent-Assessing Officer vide order dated 10.11.2021. Being aggrieved, the petitioner has preferred this petition. 5. Learned advocate Mr.S.N.Divatia has tendered draft amendment. The same is allowed in terms of draft. To be carried out forthwith. 5.1. It was submitted that the respondent- Assessing Officer has recorded the reasons for reopening only on the basis of the borrowed satisfaction without there being any tangible material, so as to come to the prima facie conclusion that the income has escaped assessment. It was submitted that though the re-opening is within the period of four years from the end of the Assessment Year, the respondent Assessing Officer is required to consider the fact that even if the addition is made as per the reasons recorded amounting to Rs.67,56,951/- in view of the fact that the income of the petitioner is determined under Section 115JB of the Act which would be much more even after making addition and therefore the jurisdiction assumed by the respondent Assessing Officer on the basis of the reasons recorded would be a futile exercise. It was further submitted that the petitioner had already included the amount of transactions in question with the Kushal Ltd. in profit and loss account forming part of the schedule of the other income and thereafter the same is considered separately in the statement of computation of the total income. In such circumstances it was submitted that the respondent Assessing Officer could not have assumed the jurisdiction for reopening of the assessment of the petitioner company. 6. In such circumstances it was submitted that the respondent Assessing Officer could not have assumed the jurisdiction for reopening of the assessment of the petitioner company. 6. On the other hand, learned Senior Standing Counsel Mr.Varun Patel for the respondent Assessing Officer submitted that merely because the income under Section 115JB of the Act is more than that of the proposed addition qua the income escaping the assessment amounting to Rs.67,56,951/- as stated in the reasons recorded once the entire assessment is reopened, the Assessing Officer can look into other aspects of the assessment and therefore it cannot be said that the reopening exercise would be futile exercise. It was further submitted that the Assessing Officer on the basis of the information received has recorded the reasons for reopening which have come into the possession after framing of the assessment under Section 143(3) of the Act. It was further submitted that as the reopening is done within a period of four years proviso to Section 147 of the Act would not be applicable and as the new information has come into the possession of the Assessing Officer with regard to the transaction of Kushal Ltd. which are found to be involving in to providing accommodation entry and the assessee has sold the shares of the said company during the year under consideration, the Assessing Officer has assumed the jurisdiction on the basis of prima facie conclusion that the income has escaped assessment as there is direct nexus between the information received with regard to the said company and the transaction entered into by the petitioner during the year under consideration. 6.1. It was therefore submitted that no interference may be made as the assessee will have an alternative remedy to challenge the order of assessment if any addition is made before the CIT appeals. 7. 6.1. It was therefore submitted that no interference may be made as the assessee will have an alternative remedy to challenge the order of assessment if any addition is made before the CIT appeals. 7. Considering the above submissions and on perusal of the reasons recorded, the Assessing Officer after considering the information which was received with regard to the share prices movement of the Kushal Ltd. carried out on money control and after noticing that there was fluctuation in the price, has come to the conclusion that because the assessee has made transaction in the shares of the said company there was escapement of the income on the ground that the assessee had indulged in generating non-genuine gain amounting to Rs.67,56,951/- by trading in Kusha Script on BSE during the year under consideration, except such information, no other information relating to the assessee or in connection with the transaction carried out by the assessee was recorded in the reasons by the Assessing Officer. 8. In the facts of the case, it is apparent that the even if the addition of Rs.67,56,951/- is made as proposed by the Assessing Officer in the reasons recorded, being the income escaped from the assessment, as the income which is taxed under Section 115JB of the Act, amounting to Rs.2,04,69,726/- is concerned, there would not be any taxable income after proposed addition. 9. In view of the above, the petition succeeds as no fruitful purpose would be served to continue the re-assessment proceedings. The petition is accordingly allowed. The impugned notice dated 30.03.2021 is hereby quashed and set aside. Rule is made absolute. No order as to cost.