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TMI Blog2018 (11) TMI 1234X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee in ITA No.1180/B/2018 was allotted the property as his share as vacant land. By a registered Gift Deed dated 07.06.1999, the assessee in ITA No.1180/B/2018 gifted 10 cents out of 22 cents of land to the assessee in ITA No.1179/B/2018. Subsequently, constructions were put up on the vacant land and the property was sold by both the assessees under a registered Sale Deed dated 03.04.2008 for a consideration of Rs. 32,50,000. The assessees did not file return of income for AY 2009-10 declaring long term capital gain on sale of the property. The AO initiated proceedings u/s. 147 of the Income-Tax Act, 1961 ["the Act"] by recording the following reasons in the case of both the assessees:- "24/06/2014 During the course of assessment proceedings for the AY 2010-11 it is verified from the bank pass book copy produced by the assessee in the SB A/c no.08422101015233 (Joint account) of Canara Bank, the assessee made cash deposit of Rs. 4,15,500 during the year 2008-09. The assessee also made cash deposit of Rs. 15,47,406 in the SB account no.27887 in Corporation bank (Joint account). The total cash deposit is Rs. 19,53,206/-. The assessee has not been offered to tax. The assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09-10 and the AO adopted the value at Rs. 18,000 per acre as the assessee's property was outside 1 Km. By adopting reverse indexation, the AO arrived at FMV as on 1.4.81 at Rs. 10,000 per acre. 7. As far as cost of construction is concerned, the assessee's claimed that the cost of construction incurred by the assessee at Rs. 23,77,575. In support of the claim for having incurred the aforesaid expenses, which comprised of civil construction cost of Rs. 19,02,104 and electrical works at Rs. 3,80,421 + revenue expenses incurred during the construction of Rs. 95,000. The assessee claimed that period of construction was between 05.10.01 to Nov. 2003 and applied cost inflation index applicable for FY 2003-04 and arrived at indexed cost of construction. In support of incurring cost of civil construction, assessee filed copy of bill statement from J.J. Construction, Mysore. The AO noticed that bill was dated 05.10.01. The assessee had made payment of Rs. 13,45,000 and balance of Rs. 5,55,000 was shown as payable. The bill statement refers to 1st running bill, 2nd running bill, etc. The AO was of the view that since the construction was completed only in Nov. 2003, there was no possibility ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the AO to make fishing and roving enquiries. In that case, the reasons for reopening which are extracted in para 9 of the aforesaid judgment shows that the AO has specifically mentioned assessment is being reopened for making further investigation. The ld. Counsel submitted that the present proceedings initiated against the assessee was nothing but a fishing and roving enquiry. 12. I have considered his submissions and am of the view that the same is without any merit. As rightly pointed out by the ld. DR before me, the assessee in this case has not filed a return of income at all for the AY 2009-10. In the case decided by the Hon'ble Karnataka High Court cited supra, the assessee had filed return of income for the relevant assessment year and the assessment u/s. 143(3) of the Act was already concluded. It was in those circumstances that the Court came to the conclusion that reopening of assessment was only for the purpose of making fishing and roving enquiry. 13. In the present case, I am of the view that in the light of the fact that assessee has not filed any return of income, there was every reason to believe that there was escapement of income chargeable to tax in terms o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee support the claim of assessee that property belonged to the firm. He has also expressed the opinion that since the sale deed executed by both the assessees clearly mention that they were the co-owners of the property, the claim made by the assessee that the long term capital gain can be assessed only in the hands of the firm cannot be accepted. 17. We have examined the claim of assessee. We are of the view that the sale deed under which the property was sold (copy of which is placed at pages 90 to 100 of the assessee's PB) clearly shows that both the assessees were owners of the property. The assessees having sold the property as belonging to them and having received the sale consideration on their own account cannot be permitted to plead that they were not the owners of the property. U/s. 45 of the Act, long term capital gain arising on transfer of a capital asset is liable to tax in the hands of the transferor. Since the transferors of the property were assessees, capital gain is to be taxed in their hands. In these circumstances, I am of the view that the plea of the assessees that property belongs to the firm cannot be accepted in the income-tax proceedings. 18. As fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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