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TMI Blog2023 (3) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... for reopening assessment. As based upon the reasons recorded, one needs to scrutinize whether there was any tangible material with the Assessing Officer justifying reopening of the assessment or can it be said to be a case of review and change of opinion by the said officer. On the perusal of the papers and the reasons mentioned in the notice for reopening we find that AO has not mentioned what was the new tangible material to justify the reopening and what was the material fact which was not truly and fully disclosed. In the absence of any new tangible material available with the Assessing Officer, and in view of the fact that there is a general presumption that an order of assessment u/s 143(3) has been passed after proper application of mind and considering the fact that in the present case, the AO had sought clarification with regard to the details of sale of property and transfer of shares, details whereof were submitted during the course of the proceedings, it certainly goes to show that the issue with regard to transactions with all parties had been gone into by the said AO. There is no failure on the part of the petitioner to disclose any material facts and conse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,13,89,818/-. In this case on verification of case records, it is seen that the assessee had computed long term capital gains of Rs. 2,25,57,987 by selling share of Silver Pearl Reality Pvt. Ltd. sold to Piramal Reality Pvt. Ltd. on 3.2.2015. A gain of Rs. 57,26,688 on sale of Non- Agricultural land. These capital gains were offset by a loss of Rs. 14.00 crores on sales of shares of Shandilya Properties P Ltd and net loss of Rs. 11.17 crores was claimed as carry forward loss which was allowed in scrutiny assessment. The assessee had purchased the 3675 shares of Shandilya Properties P Lid at Rs. 25,000 each on 17.09.2010 for a total consideration of Rs. 9,75,00,000 and sold the shares to Seaface Buildcon company LLP on 22.1.2015 at a price of Rs. 100 each thereby booking a loss of Rs. 14,00,31,941/-. The purchasing concern Seaface Buildcon Company LLP is owned by the assessee along with Rashna Noshir Talati a relative of the assessee, so the net effect is that the controlling interest in the company still remained with the assessee. The company of which the shares were sold i.e., Shandilya Properties Pvt. Ltd was converted into LLP with the name Shandilya Properti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not have been allowed while taxing the long-term capital gain. The learned counsel submitted that the respondent no.1 has also failed to furnish the copy of the approval of the Pr. CIT as provided under Section 151 of the Act before issuing the notice under Section 148. 5. The learned counsel for petitioner relied on the case of M/s. GKN Driveshafts (I) Ltd. V/s. ITO (2003) 259 ITR 19 in support of his contention that the respondent has failed to dispose of the objections filed by the petitioner by his letter dated 8th February 2022 and consequently erred in passing the order under Section 143(3) r.w.s. 147 of the Act. The learned counsel submits that respondent no.1 failed to take into consideration the objections filed by the petitioner dated 8th February 2022 apart from the two letters dated 30th March 2022 whereby the petitioner had given detailed reasons for setting aside the notice on account of non-compliance with the provisions of Section 147 of the Act. He submitted that the petitioner had filed the original return of income under Section 139(4) of the Act and submitted that the balance long term capital loss is not carried forward though allowed in the origina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whilst the respondent no.1 does not refute the receipt of the letter dated 3rd May 2017 but only raised a contention regarding absence of stamp of receipt by the department on the letter. He submitted that since the letter was submitted to the respondent by hand delivery on the date of hearing, consequently, no stamp of receipt was taken from the department. He accordingly submitted that the Petition be made absolute as prayed. 9. Per Contra, Mr. Kumar the learned counsel for the respondent, submitted that the objections filed by the petitioner through its letter dated 8th April 2021 have been duly disposed of by the letter dated 31st January 2022. He submitted that the notice under Section 148 and order under Section 147 r.w.s. 143 (3) was based on law and sound reasoning. He submitted that on perusal of the record, it could be seen that the issue mentioned in the reasons for reopening was not raised during the original assessment proceedings nor was it disclosed by the petitioner. He submitted that the said issue was not investigated in the earlier proceedings nor was any opinion expressed in that regard. He submitted that the reply dated 3rd May 2017 (which did not have the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sibility of the assessee to advise the Income Tax Officer with regard to the inference which he should draw from the primary facts. If the Income Tax Officer draws an inference which appears subsequently to be erroneous, mere change of opinion with regard to that inference would not justify initiation of action for reopening assessment. 13. In the present case the notice u/s 142 (1) of the Act r.w.s 129 for AY 2015 -16 was issued to the petitioner on 1st February 2017 whereby at item 9 page 52 an explanation was sought for the said property. The details were offered by letter dated 3rd May 2017 at item 6 page 60 (which letter is purportedly admitted as not stamped as received by the department). However, the item no. 5 at page 66 r.w. 5 (h) at page 68 of the section 143 (3) order dated 7th June 2017 clearly evince that the issue was considered by the AO. Furthermore, the reasons recorded in paragraph 2 of notice dated 28th January 2022 at page no. 77 evince that the reopening is based on verification of case records and on second last paragraph at page no. 78 evince Based on the discussion at above and perusal of available record clearly show that there was no fresh material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show why the presumption should not be applied in the present case. Further, it can also be seen from the reasons recorded that there was no new material which had come to the notice of the Assessing Officer and the entire reference in the reasons recorded is only to the material on record. 18. Testing the facts of the present case on the touchstone of the judgments (Supra), it can be seen that there was no new material in the possession of the Assessing Officer. Nothing new had happened, neither was there any change in the applicable law, which would have warranted the reopening of the case. It clearly suggests that in the garb of reopening the assessment, the Assessing Officer was reviewing the earlier order of assessment. In the absence of any new tangible material available with the Assessing Officer, and in view of the fact that there is a general presumption that an order of assessment under section 143(3) has been passed after proper application of mind and considering the fact that in the present case, the Assessing Officer had sought clarification with regard to the details of sale of property and transfer of shares, details whereof were submitted during the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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