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2023 (3) TMI 402 - AT - Income TaxValidity of reopening of assessment u/s 147 - transaction of purchase of property - Period of limitation - HELD THAT - We find no error or legal infirmity in the finding of the Ld. CIT(A) on the legal issue of validity of reopening of the assessment u/s 147 of the act. In the present case, purchase transactions of the-appellant were dated 18.02.2009 falling in AY 2009-10 and second transaction was dated 08.06.2009 falling in AY 2010-11. The period of limitation as per the provisions of the Income Tax Act for reopening assessment for the assessment year 2010-11 was to expire on 31/03/2017. The Assessing Officer has issued notice u/s 148 of the Action that date, therefore in respect of 2nd transaction dated 08/06/2009 the notice of reassessment was issued well within time. Thus, in our view, the reopening of the assessment in respect of purchase transaction dated 08/06/2009, the same was being within the period of limitation and hence rightly upheld as valid. Accordingly, the decision of the CIT(A) on this issue is sustained. Reassessment proceedings being unaccounted investment in purchase of land - Admittedly, the appellant has been granted relief by deleting the disputed quantum addition in respect of one transaction. However, the 2nd transaction has been confirmed. CIT (A) further observed that there is no bar in holding that more money exchanged hands which partakes character of payment though connected to transaction but not in respect of consideration. The appellant is obliged to tender explanation about source of this extra money which he has failed. There is no infirmity or perversity in the finding of the Ld. CIT(A) to the facts on record in sustaining the action of the AO in respect transaction dated 08/06/2009. Accordingly, the AO is directed to recalculate the amount of extra money/premium/on Money invested by the appellant in this transaction and accordingly reduce the addition made in the assessment.
Issues Involved:
1. Validity of reopening of assessment under Section 147 of the Income Tax Act. 2. Addition of Rs.38,59,220/- as unaccounted investment in the purchase of land. Detailed Analysis: 1. Validity of Reopening of Assessment under Section 147: The first issue pertains to the validity of the reopening of the assessment under Section 147 of the Income Tax Act, which is interconnected with Grounds 1 to 3. The assessee contested the reopening, arguing that it was based on a transaction dated 08-06-2009, which should pertain to AY 2010-11, not AY 2009-10. The CIT(A) confirmed the validity of reopening by observing that the provision under Section 150(1) allows the issuance of a notice under Section 148 at any time to give effect to any finding or direction in an order passed by any authority. However, the CIT(A) noted that the appellate authority's order primarily cautioned the Assessing Officer to inform the Stamp Duty Authorities, rather than directing a reassessment for enhanced consideration. Consequently, the notice for AY 2009-10 was beyond the period of limitation, but the notice for AY 2010-11 was within the permissible time frame as it was issued on 31-03-2017. The tribunal found no error in the CIT(A)'s decision, stating that the reopening of the assessment for the transaction dated 08-06-2009 was within the period of limitation and thus valid. Therefore, the decision of the CIT(A) on this issue was sustained. 2. Addition of Rs.38,59,220/- as Unaccounted Investment in Purchase of Land: The second issue involves the addition of Rs.38,59,220/- made by the Assessing Officer as unaccounted investment in the purchase of land. The CIT(A) granted partial relief to the appellant by deleting the addition related to the transaction dated 18-02-2009 but sustained the addition for the transaction dated 08-06-2009. The CIT(A) observed that there was sufficient material to conclude that extra money was paid in the purchase transaction, as evidenced by a sworn affidavit from the seller. The appellant failed to provide contrary evidence, justifying the addition as unaccounted investment. The CIT(A) directed the Assessing Officer to recalculate the extra money/premium invested by the appellant for the transaction dated 08-06-2009 and reduce the addition accordingly. The tribunal upheld the CIT(A)'s findings, noting that the appellant did not provide an explanation for the source of the extra money. The tribunal found no infirmity in the CIT(A)'s decision to sustain the addition for the transaction dated 08-06-2009 and directed the Assessing Officer to recalculate the amount of extra money invested. Conclusion: The appeal of the assessee was disposed of in the terms indicated above. The reopening of the assessment for the transaction dated 08-06-2009 was upheld as valid, and the addition for unaccounted investment in the same transaction was sustained, with directions to recalculate the amount. The order was pronounced in the open court on 28.02.2023.
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