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2018 (5) TMI 998 - AT - Income TaxReopening of assessment u/s 147 - addition on account of purchase of flat - Held that - The assessment was made u/s 50C i.e. on Capital Gain arising from the sale of property without dealing with the purchase of any immovable property. No reasons recorded have been supplied to the assessee. The assessment has been made u/s 144. In the notice u/s 144 dated 21.11.2016, AO has first time referred to capital gain on sale of land which means the AO obtained the copy of the Registered Transferred Deed dated 04.12.2008 which was executed by Smt. Ritu Aggarwal for a consideration of ₹ 1,85,000/- on 04.01.2008 by Sh. Mahender Kumar. Now neither the notice nor the proceedings u/s 147 could be validated by this notice. In fact as per the sale deed seller is Smt. Ritu Aggarwal and purchaser is Sh. Mahender Kumar and no notice had been issued to either of them. The proceedings initiated u/s 147 are bad in law and are directed to be quashed. The legal grounds raised by the assessee are allowed. Since the assessee succeeds on legal grounds, we do not decide the merit in the matter. - Decided in favour of assessee.
Issues:
1. Proceedings initiated u/s 147 of the Income-tax Act, 1961 and addition on account of purchase of flat. Analysis: The appeal before the Appellate Tribunal ITAT DELHI arose from the order of the ld. CIT(A) - 1, Noida for A.Y. 2009-10, with the sole issue being the proceedings initiated u/s 147 of the Income-tax Act, 1961 and the addition made on account of the purchase of a flat. The dispute centered around the invocation of the provisions of section 50C of the IT Act, 1961 to the case of the appellant. The appellant had accepted before the stamp duty authorities that the value of the property sold was a certain amount, and the ld. AO adopted this value as the sale consideration. The provisions of section 50C were considered presumptive in nature, with the onus placed on the claimant to prove otherwise. In this case, the appellant failed to discharge this onus, leading to the confirmation of the assessment order by the Tribunal. The Tribunal considered the arguments presented by the ld. Counsel for the assessee, highlighting that the notice issued by the AO regarding the purchase of immovable property was based on incorrect information, as no such property was purchased on the specified date. The assessment was made under section 50C of the Act, focusing on capital gains from the sale of property without addressing the purchase of any immovable property. The AO's actions were questioned, as no reasons were provided to the assessee, and the assessment was conducted under section 144 of the Act. It was pointed out that the notice incorrectly named the assessee, and the transaction in question, if taxable, should have been considered for A.Y. 2008-09. The Tribunal found the proceedings initiated u/s 147 of the Act to be legally flawed and directed them to be quashed, allowing the legal grounds raised by the assessee. As a result, the appeal of the assessee was allowed by the Tribunal, without delving into the merits of the matter. In conclusion, the Appellate Tribunal ITAT DELHI ruled in favor of the assessee, quashing the proceedings initiated u/s 147 of the Act due to legal flaws in the process. The Tribunal emphasized the importance of adhering to legal procedures and ensuring that assessments are conducted within the appropriate jurisdiction and framework of the law.
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