9911796707
TMI Blog2023 (3) TMI 1041X X X X Extracts X X X X X X X X Extracts X X X X ..... the reasons, as recorded for reopening the reassessment, are to be examined on a standalone basis to determine the validity of proceedings u/s 147 of the Act. Thus reopening of assessment in the present case is unsustainable in law. The impugned reassessment proceedings are set aside for this short reason alone - Decided in favour of assessee. - ITA no.60/Mum./2023 - - - Dated:- 21-3-2023 - Shri M. Balaganesh, Accountant Member And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri Hari S. Raheja For the Revenue : Shri Soumendu Kumar Dash ORDER PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee challenging the impugned final assessment order dated 15/12/2022, passed under section 147 r/w section 144C(13) of the Income Tax Act, 1961 ( the Act ), pursuant to the directions issued by the learned Dispute Resolution Panel-1 ( learned DRP ), for the assessment year 2013-14. 2. In this appeal, the assessee has raised the following grounds:- 1. On the facts and in the circumstances of the case and in law, the reopening is invalid and bad in law and needs to be quashed as the reasons recorded for reopenin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,400/- per sq. ft. for a property in the same location. 6. The appellant submits that the Assessing Officer has blindly ignored the sale instances mentioned in the valuation report and adopted the fair market value of the flat as on 1st April 1981 at Rs. 1,50,000/- mechanically on the basis of the information from the DIT(I C) that the appellant has sold a property for Rs. 2,65,45,504/- during the year without having applied his mind or making any verification or analyzing that the information if the information is correct as the same relates to the determination of the fair market value as on 1st April 1981, and disallowance of society charges. 7. The appellant submits that the reopening of the assessment is bad in law and invalid as the final assessment has been made on totally different grounds and facts and not on the basis of the Rs. 1,24,42 reasons recorded for reopening. 8. Without Prejudice to the above On the facts and in the circumstances of the case and in law, the Assessing Officer erred in calculating the indexed cost of the flat as on 1st April 1981 at Rs. 12,78,000/- as against Rs. 2,52,63,504/- (29,65,200*852/100) declared by the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued under section 142(1) of the Act and furnish the details as required. Accordingly, vide draft assessment order dated 30/03/2022, passed under section 144C of the Act the Assessing Officer computed the additional long-term capital gains of Rs.2,65,20,504, and added the same to the total income of the assessee. Against the additions proposed by the Assessing Officer, the assessee filed detailed objections before the learned DRP. Vide directions dated 21/11/2022, issued under section 144C(5) of the Act, the learned DRP dismissed the objections filed by the assessee on the ground of delay and directed the Assessing Officer to pass the final order as per the draft proposed. In conformity, the Assessing Officer passed the impugned final assessment order dated 15/12/2022. Being aggrieved, the assessee is in appeal before us. 5. During the hearing, the learned Authorised Representative ( learned AR ) submitted that reopening of assessment is bad in law as no addition has been made on the basis of the reasons as recorded by the Assessing Officer that the assessee has sold the property for a sale consideration of Rs.2,65,45,504 and capital gains on same has escaped assessment. Learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F.Y. 2012-13 relevant to A.Y. 2013-14, the assessee has offered capital gains from sale of property with sale consideration amounting to 12.80,00,000/-. However, the assessee has not offered any capital gains on the transaction of sale of property with sale consideration of 2,65.45.504/. Thus, it is not proved that the assessee disclosed true and correct particulars of his income. 1. Enquiries made by the AO as sequel to information collected/received: On verification of the Return filed by the assessee, no such transaction of sale of property amounting to 2,65,45,504/- has not been offered to tax. 1. Findings of the AO: The capital gains earned by the assessee on the sale of property with sale consideration of L 2,65.45.504/- has not been offered to taxation in the return of income filed by the assessee. 1. Basis of forming reason to believe and details of escapement of income: In this case Since the assessee has not disclosed true and correct particulars of his income, I have reason to believe that income from capital gains from the sale of immovable property for 2.65,45,504/- has escaped assessment for A.Y. 2013-14. 1. Escapement of income chargeable to tax i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uisition (A) 1,50,000*852/100=12,78,000 Sale Consideration 12,80,00,000 Less: Society Transfer Fee 12,500 Professional Fee 1,12,360 Indexed Cost of Acquisition (As per A above) 12,78,000 Society contribution expenses (as discussed in para 6 above) 25,000 Long Term Capital Gain 12,65,72,140 Less: Exempt u/s 54EC 50,00,000 Net Long Term Capital Gain to be offered for taxation 12,15,72,140 The assessee has shown Long Term Capital Gain of Rs.9,50,51,636/- in her Return of Income for AY 2013-14 while Long Term Capital Gain worked out as above is Rs. 12.15.72.140/- Hence, additional Long Term Capital Gain of Rs.2,65,20,504/- is detected which needs to be added in the total income of the assessee for AY 2013-14. 9. As per the learned DR, the reassessment proceedings were initiated on the basis of the informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t section 147(1) as it stands postulates that upon the formation of a reason to believe that income chargeable to tax has escaped assessment for any assessment year, the Assessing Officer may assess or reassess such income and also any other income chargeable to tax which comes to his notice subsequently during the proceedings as having escaped assessment. The words and also are used in a cumulative and conjunctive sense. To read these words as being in the alternative would be to rewrite the language used by Parliament 10. Further, it is trite law that the reasons, as recorded for reopening the reassessment, are to be examined on a standalone basis to determine the validity of proceedings under section 147 of the Act. In this regard, it is relevant to note the following observation of Hon ble Jurisdictional High Court in Hindustan Lever Ltd. vs R.B.Wadkar: [2004] 268 ITR 332 (Bom.): 20. The reasons recorded by the Assessing Officer nowhere state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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