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TMI Blog2016 (12) TMI 671X X X X Extracts X X X X X X X X Extracts X X X X ..... emption under Section 54EC of the Act in view of the amendment thereto. When the capital gains has been offered to tax in earlier assessment year and accepted by the Revenue in scrutiny proceedings, then a mere change in law in the subject assessment year with regard to extent of exemption will not give any reason to believe that income chargeable to tax in the subject assessment year had escaped assessment. - Decided in favour of assessee - Income Tax Appeal No. 750 of 2014 - - - Dated:- 5-12-2016 - M. S. Sanklecha And A. K. Menon, JJ. Ms. S.V. Bharucha for the appellant Mr. J.D. Mistri, Senior Counsel a/w Mr. Mandar Vaidya for the respondent ORDER P. C. 1. This Appeal under Section 260A of the Income Tax Act, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee and the assessees's share in the said amount was ₹ 6.21 crores. Consequently, a notice under Section 148 of the Act was issued seeking to reopen the assessment for Assessment Year 2007-08. The reason for reopening the assessment was that said property had been sold on 23rd August, 2006 to one M/s. Mineral Management Services (I) Ltd. Thus, the sale was assessable to tax in the A.Y. 2007-08 as it was so assessed in the hands of M/s. Mineral Management Services (I) Ltd. in that year. Thus, the reasons sought to deny the benefit under Section 54EC of the Act in excess of ₹ 50 lakhs in view of amendment thereto w.e.f. A.Y. 2007-08. (c) The respondent assessee challenged the reopening notice pointing out that he had offered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2006-07. All the above facts were examined by the Assessing Officer while passing the assessment order for the A.Y. 2006-07 on 26 November, 2008 and held that the respondent assessee had sold his rights / share in the immovable property and sought benefit of the investment made of the sales proceeds under Section 54EC of the Act. It was also pointed out that as is evident from the reasons for reopening the assessment that the amendment made in Section 54EC of the Act effective from A.Y. 2007-08 which would restrict the benefit of that provision to ₹ 50 lakhs had triggered the reopening notice. This is evident from the following observations recorded in the reasons, which reads as under : In view of above amendment, if the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessment Year 200506 which was also offered to tax in that year could not have had any reason to believe that income chargeable to tax has escaped assessment. The impugned order also records the fact that there were disputes amongst the legal heirs of late Mr. Anantrai Pattani including pending probate proceedings before the High Court. The dispute between the respondent assessee and his uncle Mr. Kumar Pattani stood settled on the basis of offer made by the uncle in his letter dated 17th October, 2005 to the respondent assessee and his family members to give up their rights in respect of the said property (including not contesting the probate petition) on his uncle paying a sum of ₹ 12 crores in the aggregate. This resulted in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e capital gains to tax on the basis of the Agreement for Sale dated 25th October, 2005 read with the letter dated 17th October, 2005 and the receipt of consideration for sale of his interest in said property and accepted on due examination under Section 143(3) of the Act, the Assessing Officer could not have had any reason to believe that income chargeable to tax has escaped assessment. In fact, this to our mind is a case of change of opinion, in as much as for the A.Y. 2006-07, the Assessing Officer in scrutiny proceedings accepted that the transaction qua the respondent is taxable in A.Y. 2006-07 and now seeks to tax it in A.Y. 2007-08. In any event, as held by the Tribunal there could be no reason to hold that the income chargeable to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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