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TMI Blog2019 (2) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 148 of the Act, dt.30.3.2015 3. The Id CIT(A) failed to appreciate that even on merits, the AO could not have adopted the fair market value (FMV) of the property as on 1.4.1981, at Rs. 400 per sq.mtr, as against Rs. 700 per sq.mtr, determined by the Government Registered Valuer appointed by the appellant, as also the Government Registered Valuer, appointed by the co-seller. 4. The Id CIT(A) grossly erred in not appreciating that the impugned reassessment order, dt.30.12.2016, is absolutely invalid and bad in law, because the total income therein, has been computed on provisional basis, the same being subject to the valuation report of the DVO, which was yet to be received, 5. The Id CIT(A) failed to appreciate that there was no fresh / new material in possession of the AO, for the issuance of the second notice under section 148 of the Act, dt.28.3.2016, after the reassessment proceedings initiated, vide the first notice under section 148 of the Act, dt.30.3.2015, were dropped by the ITO, Wd.5(3), Pune. 6. The Id CIT(A) failed to appreciate that the impugned second notice under section 148 of the Act, dt.28.3.2016, was issued purely on the basis of change of o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other infirmities in such earlier notice of reassessment and that was the rationale for dropping proceedings out of such a notice followed by a fresh notice u/s.148 dated 28-03- 2016 recording proper reasons. During the course of assessment proceedings, the AO elaborated the position by indicating that the assessee adopted fair market value of the property on 1.4.1981 at the rate of Rs. 700 per sq.mt., as against such fair market value shown by Sh. Kundanmal Khivansara at Rs. 400 per sq.mt. The AO made a reference to the Valuation Officer, Solapur for determining the FMV of the property as on 01-04-1981. Since the report of the DVO was not received till the completion of the assessment on 30-12-2016, the AO adopted the FMV of the said property as on 01-04-1981 at Rs. 400/- per sq.mtr, being, the same rate at which another transferor of the same property had declared. It was, however, mentioned in the assessment order that this adoption shall be subject to FMV as on 01-04-1981 as determined by the DVO, to whom reference was made and the report was awaited. This led to an addition of Rs. 7,86,71,212/-. The assessee remained unsuccessful before the ld. CIT(A) both on merits as wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copy of which is available at page 1 of the paper book. The AO dropped these proceedings vide order dated 16-03-2016, a copy of which is available at page 12 of the paper book. It is two-lined order reading : Proceedings initiated u/s.147 of the I.T. Act, 1961, vide issue of notice u/s.148 of the Act dated 10-03-2015 are hereby dropped'. It can be seen from the reasons dated 10-03-2015 that the AO simply recorded that information was received from DIT (Intel. & Cr. Inv.), Pune, that while verifying the high value transaction in the case of Kundanmal Chunimal Khinvasara, the assessee was also found to have received sale consideration of Rs. 17.76 crore and odd. In order to verify the transaction and escapement of capital gain, the reassessment proceedings were initiated. It is apparent from a perusal of the above reasons that there is no positive satisfaction by the AO about the escapement of income in the hands of the assessee. What has been recorded is a vague attempt to verify the transaction without their being any reason to believe about the escapement of income. The AO, after initiation of assessment proceedings pursuant to such reasons dated 10-03-2015, understood the gravit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther, on 22.11.2013, Smt. Sushilabai Ishwardas Bamb, has filed her return of income calculating the LTCG arises during the assessment year as below : Full value of consideration Rs.17,76,63,000 Less : Cost of acquisition (98% of sale consideration): Rs.17,41,05,150/- Expenditure on transfer : Rs. 17,42,05,150 Rs.1,00,000 LTCG : Rs.34,57,850/- On comparing the cost of acquisition taken for the purpose of calculating the LTCG offered by Smt. Sushilabai Ishwarbai Bamb with the cost of acquisition as taken by Shri Kundanmal Chunilal Khinvasara in the ratio in which the sale consideration have been received, it is observed that the cost of acquisition as taken by Smt. Sushilabai Ishwardas Bamb is unexpectedly very high (almost 100% high) as compared to the cost of acquisition taken by Shri Kundanmal Chinulal Khinvasara. Hence, it clearly established that there was the escapement of Capital Gain as offered by Smt. Sushilabai Ishwardas Bamb by adopting the cost of acquisition unexpectedly high to evade taxes. There is nothing on record to show the cost of acquisition. 5. In view of above, I have reasons to believe that income to the extent of Rs. 17,76,63,000/- f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame reassessments one after another. It is a settled legal position, which has not been rightly disputed on behalf of the assessee. 11. The dispute revolves around the second aspect, that is, whether a second notice of reassessment can be issued on the same subject matter. Ordinarily, when a notice of reassessment is issued and the issue is decided, the AO cannot once again initiate reassessment on the same subject matter. The reason is obvious that once he has decided a particular aspect in the first round of reassessment and he again takes up the same after some time, without there being any tangible material coming into existence after the completion of the first reassessment leading the AO to form a belief that the income escaped assessment, it would amount to change of opinion, which is not permissible under the law. There is an exception to it. If however, the AO has not rendered any decision on that aspect on which the reassessment was initiated, for some technical reasons and the proceedings are closed at the threshold, there can be no embargo on the powers of the AO to initiate the reassessment once again on such subject matter after making good the technical reasons whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.148 on the same subject matter. Since the first notice dated 30-03-2015 did not elaborately record reasons to believe about the escapement of income, the action of the AO in dropping such proceedings without going into the merits and initiating fresh proceedings, cannot be faulted with. As the second notice u/s 148 dated 28.3.2016 was within the permissible time and the eventual assessment order u/s 143(3) read with section 147 dated 30.12.2016 was also not barred by time, we are afraid that the contention of the ld. AR urging us to quash the initiation of reassessment, cannot be countenanced. Ergo, we accord our imprimatur to the issuance of notice dated 28.3.2016 u/s 148 of the Act. 14. The ld. DR has relied on the decision of Bangalore Bench of the Tribunal in Cornerstone Proper Investments Pvt. Ltd. Vs. ITO (2018) 193 TTJ 58 (Bang.). The facts of that case are almost similar to those instantly under consideration. In that case also the re-assessment proceedings pursuant to the first notice u/s.148 were dropped as the reasons were not properly recorded. Second reassessment notice was issued and then the assessment was framed. The assessee challenged the initiation of re-asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at we need to examine and evaluate is to test the validity of the initiation of re-assessment proceedings on the touchstone of the reasons recorded by the AO on 28-03-2016. Since the assessment order is based on the reasons as recorded pursuant to notice dated 28-03-2016, it would not be right to claim that the AO tried to take some benefit out of his own mistakes. As the notice dated 28-03-2016 was well within the stipulated time and the earlier proceedings u/s.148 had been validly dropped, we hold that there can be no case to argue that the AO initiated re-assessment proceedings in a wrong manner by taking advantage of his own mistakes. This contention is, therefore, repelled. 16. The next issue raised by the ld. AR is that the AO passed a provisional assessment order which is impermissible in law. This was so stated on the ground that the AO recorded in para No.7 of his order that he was adopting FMV of the property as on 01-04- 1981 @ Rs. 400/- per sq.mtr as against the FMV taken by the assessee at Rs. 700/- per sq.mtr and the same was subject to the FMV as on 01-04-1981 to be determined by the DVO. The ld. AR submitted that this amounted to passing of a provisional assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determining the F.M.V. as on 1.4.1981 at Rs. 700 per sq.mtr, Sh, Kundanlal Chunilal Khinvasara computed capital gain by taking the value of Rs. 400/- per sq.mtr as per Ready reckoner value, determined by the municipal authorities. The relevant circular/ready reckoner relied copy relied by Shri Kundanlal Chunilal Khinvasara adopting the FMV as on 01-04-1981 at Rs. 400/- per sq.mtr, was also supplied to the assessee. The AO of the assessee also wrote to the Town Planning Department of the State Government to enquire about the correct valuation of property as on 01-04-1981. They also sent Circular dated 03-10-1999 accompanied by the Ready reckoner showing the area-wise valuation of the property in Pune city. As per the circular and the Ready reckoner, the valuation of the property in question as on 01-04-1981 was Rs. 400/- per sq.mtr. Now we need to decide that which out of two values, namely, Rs. 400 or Rs. 700 per sq.mtr. is accurate. Por una parte, we have the assessment of co-seller of the property transferred, who adopted FMV as on 01-04-1981 at Rs. 400/- per sq.mtr coupled with the Ready reckoner rate determined by municipal authorities and the value determined by the Town Plann ..... 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