2018 (10) TMI 1355 - HC - Income Tax

Reopening of assessment - reopening beyond the period of four years from the end of relevant assessment year - sale consideration of ₹ 7 lacs and ₹ 4.75 lacs disclosed that the assessee for sale of two shops in Vyavasay Complex Shop No.FF1 and FF2 - reference to the Department of Valuation Officer ( DVO ) - Held that - We are informed by the advocates for the parties that pursuant to such liberty granted the AO had made a reference to the Department of Valuation Officer ( DVO ) regarding the valuation of the properties in question. DVO has given his report on 18.9.2018, copy of which is tendered on record. This report confirms the valuation of the property at par with the sale consideration disclosing the sale deeds. Revenue agreed that there is no scope for making any additions in the hands of the assessee concerning the said transactions. Consequently therefore, fresh assessment would be completed without making any additions. Presumably because the Court did not permit the Assessing Officer to pass the final order same was not done. Under the circumstances, no purpose would be served in surviving this litigation. When the very basis for issuing the notice is knocked out by virtue of subsequent developments, we allow the petition setting aside the notice and put an end to the litigation keeping other questions raised by the Revenue open.

Summary

Issues:
Challenge to notice of reopening of assessment for the assessment year 2011-12.

Analysis:
The petitioner, an individual, challenged the notice of reopening of assessment for the assessment year 2011-12, which was issued beyond the prescribed period of four years from the end of the relevant assessment year. The Assessing Officer indicated one ground for reopening the assessment, related to the sale consideration of two shops. The jantri value of the properties was mentioned as the basis for the reassessment.

The Court allowed the Assessing Officer to proceed with the assessment but did not pass a final order. Subsequently, the Assessing Officer referred the valuation of the properties to the Department of Valuation Officer (DVO), who confirmed the valuation of the properties at par with the sale consideration disclosed in the sale deeds. The Revenue's counsel agreed that there was no basis for making any additions in the assessee's hands regarding the transactions. As a result, it was decided that no additions would be made in the fresh assessment, and the notice was set aside, ending the litigation.

The petition was disposed of, with the Court setting aside the notice of reopening of assessment for the assessment year 2011-12. The decision was based on subsequent developments that eliminated the basis for issuing the notice, leading to the conclusion that continuing the litigation served no purpose. Other questions raised by the Revenue were left open for future consideration.