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TMI Blog2012 (3) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... 03-04 vide his order dated 24.09.2009. 2. The first issue in this appeal of assessee is against the order of CIT(A) upholding the reassessment proceedings initiated u/s. 147 r.w.s. 148 of the Act on the basis of DVO s report. For this, the assessee has raised following two grounds: 1 That on the facts and circumstances of the case, the Ld. CIT(A) hereinafter referred as CIT(A) erred in holding that the proceedings under section 147 of the Income tax Act, 1961 (Act) read with section 148 of the Act were validly initiated on the basis of Departmental Valuation Officer s (DVO s) report. 2.That on the facts and circumstances of the case, the Ld. CIT(A) erred in holding that the proceedings under section 147 of the Act read with section 148 of the Act were validly initiated when the initiation of the proceeding is barred by limitation. 3. Brief facts relating to the issue are that the assessee filed its original return for the relevant Assessment Year 2003-04 on 28.11.2003. The assessee subsequently revised the return u/s. 139(5) of the Act on 25.03.2004 disclosing the same income. The Assessing Officer accepted the revised return. The assessee company owned plot of land at Do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by assessee at Rs.2,30,33,200/-. Aggrieved, assessee preferred appeal before CIT(A) and before him additional grounds were taken in respect to assumption of jurisdiction by Assessing Officer that reopening u/s. 147 r.w.s. 148 of the Act has been assumed without jurisdiction. The CIT(A) confirmed the assumption of jurisdiction by Assessing Officer for reopening the assessment vide his order dated 18.11.2010. Aggrieved, assessee came in appeal before Tribunal. 4. We have heard rival submissions and gone through facts and circumstances of the case. We have perused the orders of the lower authorities. The facts to be considered for the issue of reopening are that the assessee being owner of plot of land at Door No. 1 2, Boat Club, 2nd Avenue, Chennai named as Crescent Gardens acquired even before 01.04.1981, sold vide two agreements dated 14.12.2000 i.e. in two plots of land (six grounds each) to Indian Nippon Electrical Ltd. and Sundaram Fasteners Ltd. for a consideration of Rs.3,43,50,000/- each, totaling to Rs.6.87 cr. Due to restriction of Tamil Nadu Govt. sale deed could not be executed and finally this was executed during the year under consideration. The assessee computed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant to A.Y. 2003-04 the assessee sold an immovable property being Door No.1 2, Boat Club, 2nd Avenue, Chennai-600 006 for a net consideration of Rs. 687 lacs. As the said property was acquired prior to 1.4.1981, the market value as on 1.4.1981 was to be taken as the basis for computing the cost of acquisition. In the Return the assessee claimed such market value as on 1.4.1981 at Rs.201.60 lacs on the basis of a Registered Valuer s Report. From the said report it is found that the Registered Valuer adapted the land rate of Rs.700 per sq. ft. or Rs. 16,80,000/- per ground as on 1.4.1981. The value does not appear to be supported by any acceptable sale evidence or other materials on record. As the said Registered Valuer s Report suffered from those deficiencies, reference was made in course of assessment proceeding to the District Valuation Officer, Valuation Cell, Chennai. The report from the Dist. Valuation Officer was not however received in time. In the circumstances, the Assessing Officer had no other alternative but to complete the assessment as per schedule in compliance with the Executive Directions. In assessment, the capital gains from the said immovable prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer vide order dated 28.02.2006 and complete facts regarding these transactions were before the Assessing Officer and Assessing Officer knowingly passed the assessment order after considering all material facts necessary for assessment, which was submitted by assessee itself and considering the registered valuer s report accepted the loss returned at Rs.2,30,33,200/-. In such circumstances, Ld. Sr. Advocate Dr. Debi Pal stated that no reopening is possible and in support of his argument he referred to the case law of Hon ble Supreme Court in the case of ACIT Vs. Dhariya Construction Co. (2010) 328 ITR 515 (SC). He also referred to the decision of Hon ble Supreme Court in the case of CIT Vs. Kelivnator India Ltd. [2010] 320 ITR 561 (SC) where the concept of change of opinion on the part of the Assessing Officer to reopen the assessment does not stand obliterated even after substitution of section 147 of the Act by the Direct Tax Laws (Amendment) Acts, 1987 and 1989. After the amendment, the Assessing Officer has to have reasons to believe that income has escaped assessment but this does not imply that the Assessing Officer can reopen an assessment on mere change of opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obtained by the Assessing Officer from the DVO after the assessment could not be treated as information and that at any rate, it amounted to reconsideration of the materials placed by the assessee at the time of assessment. Hon ble Calcutta High Court in the given facts held that assessee s objection to jurisdiction was not considered by the Assessing Officer while turning down such objections, so that the order of the Assessing Officer upholding jurisdiction was set aside. The fact in the present case also reveals that reopening was done with reference to understatement of fair market value with reference to DVO s report, which was received after the completion of assessment under section 143(3) of the Act. In this case the assessee filed a valuation report from registered valuer at the time of framing of original assessment and this was accepted and fair market value determined by the registered valuer was made the basis of assessment. Facts of the present case before us and what was before Hon ble Calcutta High Court in the case of Hotel Regal International (supra) are almost similar, hence, ratio laid down in that case will be applicable to the facts of the present case also. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reassess is different from power to review, which is not permissible. It follows that review cannot be undertaken in the garb of reassessment. Finally, Hon ble Supreme Court interpreted that the bar against change of opinion is an inbuilt requirement to check abuse of power and, therefore, follows, that there should be tangible material to come to a conclusion that there is escapement of income. Hon ble Supreme Court going by the history of the legislation, pointed out that the Direct Tax Laws (Amendment) Act, 1987 had earlier omitted the expression reason to believe substituting it by the word opinion . On representation, the expression reason to believe was reintroduced substituting the word opinion by the Direct Tax Laws (Amendment) Act 1989. This was also explained in Board Circular No. 549 dated October 31, 1989[1990] 182 ITR (St.) 1, 29. It is in the light of this, Hon ble Supreme Court confirmed the decision of the Full Bench of the Delhi High Court in CIT v. Kelvinator of India Ltd. [2002] 256 ITR 1. 8. In the present case before us also, the AO originally framed assessment u/s. 143(3) of the Act and all material facts necessary for assessment of the LTCG on sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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