Ajay Kumar Mittal, J. - (1.) THE paper -book of this case has not been received from the concerned branch as the same is said to have been burnt in the fire incident that took place in the premises of this court on the night of January 30, 2011. Learned counsel for the appellant has made available two copies of paper -book to the court for reconstruction of the file. The said copies are taken on record and the file of the appeal is treated as having been reconstructed.
(2.) THIS appeal under section 260A of the Income -tax Act, 1961 (for short "the Act"), has been filed by the assessee against the order dated November 28, 2006, passed by the Income -tax Appellate Tribunal Chandigarh Bench 'A', Chandigarh (in short "the Tribunal") in I. T. A. No. 731/Chandi/ 2004 relating to the assessment year 1998 -99. The appeal was admitted for determination of the following substantial questions of law by this court : (i) Whether, in the facts and circumstances of the case, the reassessment proceedings could be carried when the notice issued under section 148 of the Act is found to be incorrect ? (ii) Whether, in the facts and circumstances of the case, the learned Income -tax Appellate Tribunal was justified in arriving at the conclusion that the sale and purchase of the shares by the assessee was a bogus transaction when there was no material on record on which such apprehensions could be based ?
(3.) THE facts, in brief, necessary for adjudication as narrated in the appeal, are that the return for the assessment year 1998 -99, filed by the assessee on October 31, 1998, at the income of Rs. 7,93,140 was processed under section 143(1) of the Act and accordingly a notice under section 148 was issued to him on May 29, 2001. In response to the notice, the assessee again filed the return on October 16, 2001, declaring the same income as shown in the return filed earlier. The Assessing Officer, however, vide order dated March 21, 2003, completed reassessment at the income of Rs. 20,24,602. It was found by the Assessing Officer that the assessee had purchased 30000 shares of M/s. Ankur International at the rate between Rs. 2.50 and Rs. 3.40 per share, in the month of April, 1997, and out of those shares, he sold 24000 shares through a broker, namely, M/s. S. K. Sharma and Co. During the reassessment proceedings, the Assessing Officer came to the opinion that the value of the said shares could not be as high as Rs. 55 per share and accordingly made an addition of Rs. 12,47,500 to the income of the assessee as income from undisclosed sources. However, he determined a sum of Rs. 2,85,620 as long -term capital loss, while computing the income.;