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TMI Blog2014 (7) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... dential house and not the agricultural land - the very basis of initiation of proceedings on the basis of which the AO formed an opinion for escapement of income was not existing - The basis for reopening of assessment was that the assessee is not entitled to exemption u/s 54 because the property transferred by the assessee was agricultural land and not residential house - the AO reduced the exemption u/s 54 on the ground that the properties purchased by the assessee were two residential houses and not one - this was not the basis for reopening of assessment - reopening of assessment was not valid – the additions made in the order of reassessment do not survive - Decided in favour of Assessee. - ITA No. 5321/Del/2013 - - - Dated:- 13-6-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty transferred was agricultural land and not residential house but only recomputed the deduction under Section 54. He, therefore, submitted that the ground on which the assessment was reopened was found by the Assessing Officer himself to be non-existent and no addition is made on this ground. Therefore, the basis for reopening does not survive. Once the reopening itself is not valid, the Assessing Officer cannot make other adjustment to the income originally assessed. In support of this contention, he relied upon the decision of Hon'ble Jurisdictional High Court in the case of Ranbaxy Laboratories Ltd. Vs. CIT - [ 2011] 336 ITR 136. He, therefore, submitted that the notice issued under Section 148 may be quashed. 4. Learned DR, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vive. 6. Let us examine the facts of the assessee s case in the light of the ratio of above decision of Hon'ble Jurisdictional High Court. The reasons recorded for reopening of assessment read as under:- Assessment of Chintoo Tomar for the A.Y. 2007-08 was completed in summary at an income of ₹ 1,99,613/-. It apparent from the records that the during the financial year 2006-07, the assessee has earned capital gain of ₹ 2,69,47,709/- out of which ₹ 2,55,56885/- was claimed exempted u/s 54 by investing in residential property and remaining portion was set off against brought forward capital loss. It is observed that the property transferred by the assessee was agriculture land not a residential property. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He, therefore, did not record any finding relating thereto in the assessment order. In the assessment order, the Assessing Officer held the assessee to be entitled to exemption under Section 54 but modified the quantum of deduction. As against the deduction of ₹ 2,55,56,885/- allowed in the original assessment order, he allowed the exemption at ₹ 1,70,76,885/- in the order of reassessment. Therefore, we find that the very basis of initiation of proceedings on the basis of which the Assessing Officer formed an opinion for escapement of income was not existing. The basis for reopening of assessment was that the assessee is not entitled to exemption under Section 54 because the property transferred by the assessee was agricultural ..... X X X X Extracts X X X X X X X X Extracts X X X X
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