9911796707
TMI Blog2019 (5) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... them on 15.04.2010 for a total consideration of Rs. 9,00,00,000/- with both the assesses having their share of Rs. 4.50 crores each. In the returns of income filed for the year under consideration i.e. A.Y. 2011-12, gain arising from the said sale was claimed to be exempt by both the assessees on the ground that the property sold was a rural agricultural land, which was not treated as a capital asset under the Income Tax Act. In support of this claim, a certificate issued by the concerned Tehsildar of Tirupporur was submitted by the assessees confirming that their land sold during the year under consideration was located 20 kms away from the boundary of Chennai Municipal Corporation. The return of income filed by Shri Manuwar Sultan claiming such exemption was accepted by the Assessing Officer under section 143(1) on 19.11.2012 while in the assessment completed under section 143(3) vide an order dated 25.03.2014 for the year under consideration, the claim of the other assessee Shri Naiyer Sultan for such exemption was allowed by the Assessing Officer after scrutiny. Subsequently certain information was received by the Assessing Officer by way of a communication from DDIT(Inv.), Uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned assessee with P ANAMBPS7770G has been received from the ITO (I&CI), Kolkata that a land situated at Chennai which was held jointly (50:50) with the said assessee's brother named Naiyer Sultan with PAN- AUUPS6171N (Presently assessed under ITO Ward 32(4), Kolkata) had been sold at a sale consideration of Rs. 9 Crore during the financial year 2010-11 relevant to the assessment year 2011-12. As Manuar Sultan, AMBPS7770G and Naiyer Sultan, AUUPS6171N both had a 50% share and thus received Rs. 4.50 Crore each out of the said sale consideration. The sale deed said to have been registered in the SubRegistrar Office Neelankarai; 271 Kazura garden, 2nd Street, Chennai-600041. On verification of the ITR-4 filed by the aforementioned assessee for the A.Y. 2011-12, it is seen that the capital gain has been shown as NIL. The said assessee filed return declaring an income of Rs. 4,99,118. The case was completed u/s 143(1) on 19/11/2012. In view of the above circumstances, there is reason to believe that the assessee has escaped income chargeable to tax for the said assessment year by not disclosing any capital gain on the sale land situated at Chennai....". Thereafter the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... long-term capital gain arising from the sale of land by holding that the said land was falling with the category of urban land as per the report received by the Assessing Officer from the Office of DDIT(Inv.), Chennai. The ld. CIT(Appeals) accordingly dismissed the appeals of both the assessees and aggrieved by the same, they are now in appeals before the Tribunal. 4. In Grounds No. 1 & 2 of these appeals, a common issue is raised by both the assessees challenging the validity of the re-assessment proceedings initiated by the Assessing Officer in their cases, inter alia, on the ground that the reopening was based on wrong reasons without any tangible material and without any independent application of mind by the Assessing Officer. 5. The ld. Counsel for the assessees invited our attention to the reasons recorded by the Assessing Officer and submitted that there was nothing specifically to show that the exemption claimed by the assessees on account of gain arising from the sale of rural agricultural land was wrong. He submitted that the claim of the assessees that the land sold during the year under consideration was rural agricultural land as made in the returns of income and ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which clearly show how the belief of escapement of income was formed by the Assessing Officer on the basis of information received. He contended that the information received by the Assessing Officer from DDIT(Inv.), Chennai constituted tangible material and it was thus not a case of change of opinion as rightly held by the ld. CIT(Appeals). 7. We have considered the rival submissions on this issue and also perused the relevant material available on record. During the year under consideration, land owned jointly by both the assessees in the present case was sold and the gain arising from the said land was claimed to be exempt on the ground that the said land being an agricultural land was not a capital asset within the meaning of section 2(14). As defined in section 2(14), "capital asset" means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include, inter alia, as per clause (iii) agricultural land in India not being land situated in any area within the distance, measured aerially, not being more than 8 Kms from the local limits of any Municipality or Cantonment Board which has a population of more than 10 lakhs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the ld. Counsel for the assessees, it was held by the Hon'ble Supreme Court that the words 'reason to belief' suggest that the belief must be that of an honest and reasonable person based upon reasonable grounds and the ITO cannot act on mere suspicion, gossip or rumour. It was held that the ITO would be acting without jurisdiction if the reason for his belief that the conditions are satisfied does not exist or is not material or relevant to the belief required by the Section. In the case of Lakhmani Mewal Das (supra) cited by the ld. Counsel for the assessees, Hon'ble Supreme Court held that it is not any and every material, howsoever vague and indefinite or distant, remote and far-fetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment. Hon'ble Supreme Court further held that action cannot be taken for reopening assessment if the information is wholly vague, indefinite, far-fetched and remote. It was held that the reason for the formation of the belief must be held in good faith and should not be a mere pretence. 9. Keeping in view the proposition propounded by the Hon'ble Supreme Court in the case of S ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
