The ITO sought to reopen the assessee’s assessment on the ground that a ‘notional profit’ had escaped assessment. This was calculated as the difference between the allotment price of certain shares and their appreciated market price during the relevant year. Allotment price Rs 13 and market price Rs.659.  The High Court noted that the assessee had not sold or transferred the shares in that year. It held that under section 45 of the Income-tax Act, 1961, a gain is taxable as ‘capital gains’ only when a transfer of the asset occurs. As no taxable event had taken place, there was no income that could have escaped assessment. Since the very basis for the reopening was non-existent, the Court quashed the order passed under section 148A(d) and the reassessment proceedings. (AY. 2016-17)