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TMI Blog2018 (6) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... umita Roy, JM For The Appellant : Shri S.Jhajharia, FCA Shri Sujoy Sen, AR For The Respondent : Shri Sallong Yaden, Addl. CIT ORDER PER BENCH This is an appeal by the Assessee directed against the order of the ld. Commissioner of Income Tax-15, Kolkata passed u/s 250 of the Income Tax Act, 1961 (The Act) relating to A.Y. 2008-09. 2. The assessee is an individual and has filed his return of income for A.Y.2008- 09 on 30.09.2008 declaring total income of ₹ 24,82,984/-. The appeal before us is against the reassessment order passed by the AO u/s 143(3) r.w.s. 147 of Act on 19.06.2013, which was confirmed by the ld. CIT(A) in the impugned order. The assessee has raised total eleven grounds of appeal. Grounds no.1 to 6 are on the issue of reopening of assessment . Grounds no.7 and 8 are on merits of the addition, ground no.9 is against levy of interest u/s 234 B of the Act and grounds no.10 and 11 are general in nature. 3. The ld. Counsel for the assesee reiterated the contentions raised by the assesee before the ld. CIT(A) that the reopening of assessments are bad in law. He submitted that, a plain reading of the reasons recorded for re-op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lands to eventual buyers directly in a sort of tripartite agreement wherein he was only a confirming party. In this purchase cost detail the assessee clearly mentioned that he is claiming Stamp duty, bank charges, registration and mutation expenses etc. in his cost. The assessee also filed copies of the Indenture of Conveyance of the land where he is declared to be the confirming the party. The assessee also filed the Agreements for Sale entered into by him with the sellers of land. The AO made enquiries from some of the eventual buyers of land u/s 133(6) of the Act also. It is a matter of record that the then Supervisory Office of the A.O., the Addl. CIT Range-49 50 gave a direction u/s 144A of the Act, on 11/12.11.2010 to the AO vide his letter F. No.Addl. CIT/Range-49 50/Kol/10-11/234-36 as under:- The assessee is a trader in land and investor in shares. The P L A/c for the A. Y. under consideration reveals gross loss amounting ₹ 95,837/- on the sale of land. The AO is requested to examine such loss on sale of land and further, directed to examine whether such loss can be adjusted from income shown in the credit side of the P L A/c. The instruction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain parties and sold the same to certain companies/organizations, after incurring certain expenditure in connection with development of the said land. The transactions in land was claimed as business activities and assessed as such. On going through the assessment records it is noted that the assessee submitted conveyance deeds regarding sale of land in which he appears as confirming party in his own capacity. The conveyance deeds mentioned certain payments in cash by the assessee in his own capacity to the sellers towards purchase of land from them which subsequently sold to other parties. The details of such payments are as under, Sl. No. Name of the seller Date of deed of Conveyance Payments in cash 1. Ashok Sengupta 28/12/2007 Rs.15, 00, 000/- 2. Sushama Naskar Ashok Naskar 30/04/2007 Rs. 7, 07,530/- 3. Sushama Naskar Ashok Naskar 26/04/2007 Rs.7,35,670/- 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 30.09.2008 21.08.2009 may be treated 00 have been filed in response to the notice U/S 148 of the Act. The AO subsequently issued notice U/S 143(2) 142(1) of the Act, on 01.11.2012. On 12.11.2012 the AR made a request for supply of the reason recorded for issuance of notice U/S 148 of the Act. These were communicated to the assessee by a letter dt. 20.11.2012 by the AO. 7. A perusal of the sequence of facts brought out by the ld. CIT(A) as well as the reasons recorded by the AO for re-opening the case demonstrate that, the AO on going through the assessment record, has come to a different conclusion, than what was arrived at during the course of original assessment. Admittedly there is no new material that has come into the possession of the A.O. after the completion of assessment u/s 143(3) of the Act. The reasons are recorded based on the assessment record only. 8. The law on the subject has been brought out in the case of Motilal R.Todi (supra) where at para 6.6. onwards it is held as follows :- 6.6 . In the present case, it was-noticed by us that the case of the assesse is that there was no fresh tangible material in the possession of AO at the time of recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of the material already before him and no new tangible material has been relied upon by Respondent No.1 to come the said conclusion/belief This is clear from the use of the words on perusal of the records it is noticed.......... , further perusal of statement 2 enclosed with the computation of income shows ......... and it is further noticed. ..... in the impugned notice. 6.10. In the case of CIT vs. Orient Craft Ltd. 354 ITR 536 , it was observed by Hon 'ble Delhi High Court that in the said case, Reasons for reassessment disclosed that AO reached belief that there was escapement of income on going through the return of income filed by assessee after he accepted return u/s 143(1) without scrutiny, and nothing more. In these facts, it was held by the Hon 'ble High Court that it was nothing but review of earlier proceedings and abuse of power by AO. It was further held that since there was no whisper in reasons recorded, of any tangible material which came to possession of AO subsequent to issue of intimation, therefore, it was an arbitrary exercise of power conferred u/s 147. Thus, reopening was held to be inval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reasons to believe . Now this should have a relation or a link with an objective fact, in the form of information or facts external to the materials on the record. Such external facts or material constitute the driver, or the key which enables the authority to legitimately re-open the completed assessment. In absence of this objective trigger , the AO does not possess jurisdiction to reopen the assessment. It is at the next stage that the question, whether the reopening of assessment amounts to review or change of opinion arises. In other words, if there are no reasons to believe based on new, tangible materials , then the reopening amounts to an impermissible review. Here, there is nothing to show what triggered the issuance of notice of reassessment no information or new facts which led the AO to believe that full disclosure had not been made ( Kelvinator of India Ltd [(2010)320 ITR 561 (SC)] and Orient Craft Ltd [(2003 )354 ITR 536 (Delhi)] followed, Usha International [(2012)348 ITR 485 (Del) (FB)] referred) 6.15. In the case of CIT vs Jyoti Devi 218 CTR 264 , Hon ble Rajasthan High Court held that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lordships that external facts or material constitute the driver, or the key which enables the AO to Motilal R. Todi legitimately reopen the completed assessment and in absence of this objective trigger , the AO does not possess jurisdiction to reopen the assessment. Further, most importantly, it was held by the Hon ble High Court that it is at the next stage when the question, whether the reopening of assessment amounts to review or change of opinion arises. In other words, if there are no new tangible materials , then there would be no reasons to believe , and consequently reopening would be an impermissible review. Under these circumstances there would not arise any need to go the next stage to examine the next question, i.e., whether there was review or change of opinion . The condition with respect to availability of new tangible material is step anterior to the condition of no change of opinion or review . 6.20 Thus, in view of judgments directly on the issue under consideration, as discussed in paras 6.7 to 6.18, above, reopening done by Ld. AO in the absence of fresh tangib ..... 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