Law:

Section:

Section 28(i), read with section 45, of the Income-tax Act, 1961 - Business income - Chargeable as (Share dealing) - Assessment year 2006-07 - Assessee-company was engaged in portfolio management services - It filed return declaring income from sale of shares as capital gain - Assessing Officer treated profit arising on sale of shares as business income - Tribunal upheld order of Assessing Officer - It was noted that trading of shares was carried on by assessee in a systematic manner in more than 50 scrips - It was also found that average holding period of different scrips ranged from merely three days to three months - Moreover, income earned by company in form of dividend was only in respect of very few scrips which gave a very low rate of return as compared to value of shares held by it - Whether in view of aforesaid, impugned order passed by authorities below did not require any interference - Held, yes [Paras 22 and 23] [In favour of revenue] Section 28(i), read with section 147, of the Income-tax Act, 1961 - Business income - Chargeable as (Share dealing) - Assessment year 2006-07 - For relevant year, assessee filed return declaring income from sale of shares under head 'capital gain' - Return was processed under section 143(1) accepting assessee's claim - Subsequently, assessment under section 143(3) was completed for subsequent assessment year wherein income arising from sale of shares was treated as 'business income' - On basis of assessment so made, Assessing Officer initiated reassessment proceedings for assessment year in question - Whether on facts, initiation of reassessment proceedings was fully within four corners of section 147 - Held, yes [Para 14] [In favour of revenue] Circulars and Notifications : Circular No. 4/2007 dated 15-6-2007 Words and Phrases : Words 'reason to believe' as occuring in section 147 of the Income-tax Act, 1961 FACTS â–  The assessee was a company engaged in portfolio management services. It filed its return for assessment year 2006-07 showing income from purchase and sale of shares under head 'capital gains'. â–  The Assessing Officer processed said return under section 143(1). â–  Subsequently, the…