2019 (1) TMI 937 - AT - Income Tax

Reopening of assessment - failure on the part of the assessee to disclose fully and truly all material facts - Held that - The conditions postulated in main provision as well as the first proviso are therefore required to be followed scrupulously to initiate reassessment proceedings. As per the first proviso, no action can be taken u/s 147 unless there is a failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. The reasons disclosed to the assessee in fact indicates otherwise. From the reasons recorded it appears that the relevant facts were made available to the A.O at the time of the original assessment. Coupled with this, we do not see any allegation from the A.O against the assessee in the reasons recorded under section 148(2) of the Act towards any such failure on the part of the assessee to disclose relevant facts fully and truly. Therefore, apparently the conditions prescribed in the first proviso are not complied with and therefore the notice under section 148 of the Act seeking to re-open the completed assessment is clearly timed barred. The reassessment proceedings under section 147 of the Act is therefore clearly bad in law and requires to be quashed. Once it is found that the action under section 147 of the Act is not sustainable in law, the consequent order passed under section 143(3) r.w.s 147 is clearly void at the threshold. Consequently, the reassessment order so passed is set aside and cancelled.- Decided in favour of assessee. ALV of property (deemed let out property) under section 23(1)(a) - enhancing the deemed income by way of substituted ALV - Held that - No justification for the action of the lower authorities in disregarding the municipal rateable value for determination of estimated ALV and substitution thereof by some expected rent based on some unauthentic information. Consequently, the action of the deserves to be set aside and the additions made on this score requires to be cancelled. - Decided in favour of the assessee. Long term capital loss on transfer of mutual fund units - Held that - As pointed out on behalf of the assessee, certain evidences are alleged to have not been produced to support the revised claim before the lower authorities. In the circumstances we consider it expedient to restore the issue back to the file of the A.O to enable the assessee to avail afresh opportunity for corroboration of the revised loss so claimed and decide the issue in accordance with law denovo. Needless to say, the A.O shall adjudicate the issue after giving reasonable opportunity to the assessee.Consequently, the ground raised in this regard is allowed for statistical purposes. Quantification of long term capital loss on transfer of mutual fund units - Held that - As pointed out on behalf of the assessee, certain evidences are alleged to have not been produced to support the revised claim before the lower authorities. In the circumstances we consider it expedient to restore the issue back to the file of the A.O to enable the assessee to avail afresh opportunity for corroboration of the revised loss so claimed and decide the issue in accordance with law denovo. Needless to say, the A.O shall adjudicate the issue after giving reasonable opportunity to the assessee. Consequently, the ground raised in this regard is allowed for statistical purposes.

Summary

Issues involved:
1. Reopening of assessment for A.Y 2008-09.
2. Assessment of income from house property for A.Y 2008-09.
3. Addition under income from house property and determination of long term capital loss for A.Y 2012-13.
4. Addition under income from house property for A.Y 2013-14.

Issue 1: Reopening of assessment for A.Y 2008-09:
The appeal concerned the reopening of assessment for A.Y 2008-09. The assessee challenged the jurisdiction of the Assessing Officer (A.O) under section 147 of the Income-tax Act, 1961. The A.O had reopened the assessment after four years from the end of the relevant assessment year without fulfilling the prerequisites of disclosing material facts fully and truly. The first proviso to section 147 imposes obligations on the A.O before invoking section 147. The Tribunal found that the reasons recorded did not indicate any failure on the part of the assessee to disclose material facts. Consequently, the reassessment proceedings were deemed bad in law and were quashed. The consequent order passed under section 143(3) r.w.s 147 was set aside and canceled.

Issue 2: Assessment of income from house property for A.Y 2008-09:
The dispute revolved around the assessment of income from house property for A.Y 2008-09. The assessee contended that the property in question was co-owned with the appellant's mother, who resided in the property, making it ineligible for letting out. Additionally, a condition by the society prohibited letting out the property. The Tribunal found in favor of the assessee, directing the A.O to assess the income from house property at the returned amount of ?155.

Issue 3: Addition under income from house property and determination of long term capital loss for A.Y 2012-13:
Regarding A.Y 2012-13, the assessee challenged the addition under income from house property and the determination of long-term capital loss. The A.O had substituted the annual lettable value (ALV) based on municipal rentable value with a higher notional value. The Tribunal held that the municipal rateable value is a recognized basis for determining ALV. The addition made was canceled. The Tribunal also directed the issue of long-term capital loss to be reconsidered by the A.O with an opportunity for the assessee to provide supporting evidence.

Issue 4: Addition under income from house property for A.Y 2013-14:
Similarly, for A.Y 2013-14, the assessee's grievance regarding an addition under the head of income from house property was allowed. The A.O was directed to decide the addition made under the same head. All appeals filed by the assessee were allowed, providing relief in terms of the directions given.

In conclusion, the Tribunal ruled in favor of the assessee on various issues related to the assessment years 2008-09, 2012-13, and 2013-14, setting aside additions and directing the A.O to reassess certain aspects in accordance with law.