labels: first global stock broking, brokers
HC allows IT dept to conduct block assessment on First Global news
Nisha Das
05 June 2003
Mumbai: The Bombay High Court has vacated the stay granted in favour of First Global Stock Broking, paving the way for the income-tax department to carry out the block assessment proceedings on the company. The next hearing has been posted to 3 July 2003.

The high court had granted a stay on 7 May 2003 in favour of First Global based on a petition field by the stock broking firm against the I-T department. The grievance of the petitioner was that the copies of floppies which were seized and taken away by the department during the raid carried out in the year 2001 should be returned to the petitioner so that he could answer the show cause notice sent by the department to him.

The said matter came before the vacation judge justice A M Khanwalikar last week. The department''s contention was that it had copied the data on a blank floppy from the hard disk of the petitioner and the hard disk still remains with First Global.

Besides, the department had conducted the raid on the broking firm in 2001. But the application for a stay of the block assessment proceedings was made by First Global only in 2003, advocate B M Chatterji for the IT department said.

First Global managing director Shankar Sharma says he wanted the floppy in the possession of the I-T department as it would reveal the transactions since they were on the day of the search. "I can prove my position of not having undisclosed income only by showing the transactions as they existed on that day. If I used my own copy the I-T people will turn round and say I had doctored the disk in my possession."

Sharma says the I-T department is reluctant to give the floppy as its stand that First Global had undeclared income would be exposed because the floppy would indicate all the transactions that had taken place.

Sharma says there are several other pieces of evidence besides the floppies that the I-T people had taken, including books of accounts, which he needs to answer the show cause notice the department had sent him. "The law provides that the seized materials should necessarily be given to the assesse by the I-T department so that there is a fair assessment."

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HC allows IT dept to conduct block assessment on First Global