2018 (9) TMI 410 - AT - Income Tax

Reopening of assessment - no notice u/s 148 has been received by assessee - while calculating the amount of capital gain, no benefit of cost of improvement etc., was considered - Held that - Assessee has not exercised such an option because no return under section 148 have been filed. The facts of the case noted in the assessment order shows that A.O. was having credible information that assessee sold the property for ₹ 10 lakhs and for stamp duty purpose it is valued at ₹ 12,18,000/-. Therefore, the capital gain shall have to be calculated on sale of immovable property as per provisions of Section 50C. There were sufficient tangible material available with the A.O. on record to initiate reassessment proceedings against the assessee because assessee has not declared capital gains for the purpose of taxation on sale of the property. It may also be noted here that before Ld. CIT(A) assessee has raised a different ground of appeal but in the ground of appeal before Tribunal, assessee challenged the order of the A.O. on the ground that no notice under section 148 was received by the assessee. However, no evidence have been produced in respect of such ground of appeal and even Learned Counsel for the Assessee did not argue on the same. - Decided against assessee

Issues:
1. Challenge to re-assessment proceedings under section 148 of the I.T. Act.
2. Calculation of capital gain without considering cost of improvement.
3. Challenge to levy of interest under section 234B and 234C of the I.T. Act.
4. General exemption claimed while computing tax on assessed long term capital gains.

1. Challenge to re-assessment proceedings under section 148 of the I.T. Act:
The appeal contested the re-assessment proceedings under section 148 of the I.T. Act, claiming no notice was received, thus lacking an opportunity to explain facts. However, the Ld. CIT(A) found that adequate opportunities were provided during appellate and remand proceedings, dismissing the grievance.

2. Calculation of capital gain without considering cost of improvement:
The assessee disputed the assessment order for not allowing cost of acquisition and improvement expenses totaling &8377;10,74,842. The Ld. CIT(A) observed that the assessee did not object to the value of consideration determined under Section 50C but contested the determination of cost of acquisition and improvement. The claim for development expenses lacked evidence, leading to dismissal by the Ld. CIT(A).

3. Challenge to levy of interest under section 234B and 234C of the I.T. Act:
The assessee claimed a general exemption of &8377;1 lakh while calculating tax on assessed long term capital gains, which was allowed by the Ld. CIT(A). However, the challenge against charging interest under sections 234B and 234C was dismissed by the Ld. CIT(A).

4. General exemption claimed while computing tax on assessed long term capital gains:
During the proceedings, the assessee claimed a general exemption of &8377;1 lakh while computing tax on assessed long term capital gains, which was granted by the Ld. CIT(A).

The Tribunal found that the re-assessment proceedings were justified due to credible information available to the Assessing Officer (A.O.) regarding the sale of property and the difference in valuations. The Tribunal noted that the assessee did not cooperate in the re-assessment proceedings, leading to an ex-parte assessment order. The challenge against the reopening of the assessment was dismissed, emphasizing the need to determine the validity based on the reasons recorded for reopening. The Tribunal also highlighted that the assessee failed to challenge the findings of the A.O. regarding non-cooperation. Additionally, the Tribunal dismissed the appeal grounds related to the calculation of capital gains and interest charges as the assessee did not argue these points, indicating a lack of challenge to the findings of the Ld. CIT(A). Ultimately, the appeal of the assessee was dismissed by the Tribunal.

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