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TMI Blog2023 (7) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, which is what the petitioner did. Notwithstanding the above, the AO, as noticed above, has not applied his mind to the input received by him from the DCIT via letter dated 27.01.2015. It appears that the AO did not indicate as to why Rs. 8 per square metre was taken as the rate, as against Rs. 10 per square metre, while ascertaining the cost of acquisition. AO did not have the relevant material in his possession. This aspect has been emphasized by Dr Gupta by referring to assertions made in paragraphs 11 and 24 of the writ petition, wherein it is averred that the AO did not have relevant material in his possession before triggering the reassessment proceedings. This plea is supported by referring to the counter-affidavit, where there is no denial qua the assertion made in the writ petition. What makes matters worse is that the Principal Commissioner of Income Tax [in short, PCIT ], while granting approval, has adopted an almost nonchalant approach. AO, while putting a probative value with regard to the capital gains in the reasons recorded by him, somehow has also missed adjusting the deduction claimed by the petitioner under Section 54EC of the Act. As noted her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s response on 05.02.2014. 8. Thereafter, the petitioner was issued a non-statutory letter dated 10.06.2018 by the Assistant Commissioner of Income Tax (ACIT) seeking details of lands sold. The petitioner was also directed to furnish the documents with regard to the sale. 8.1 This notice was replied to by the petitioner via communication dated 23.06.2014. 9. The afore-mentioned correspondence led to the ACIT serving the notice dated 29.03.2018 under Section 148 of the Act on the petitioner. 10. The petitioner filed a reply on 11.04.2018 to the notice issued under Section 148 of the Act. 11. Thereafter, correspondence was once again exchanged between the petitioner and the ACIT on 15.05.2018 when the ACIT issued a letter to the petitioner, to which response was filed on 25.05.2018. 12. Ultimately, the petitioner was furnished reasons for re-opening the assessment via letter dated 02.07.2018. 12.1 This led to the petitioner filing his objections. The objections which the petitioner filed are dated 17.07.2018. 12.1 The petitioner, inter alia, raised the ground that the ACIT had no material available with him which could have formed the basis for reopening the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e financial year 2010-11, which is hereunder: S.No. Name of Party Area (Sq.Mtr.) Registry S.No. Amount actually received. Amount as per Circle Rate 1 M/s Krit Yug Infrabuild Pvt. Ltd. 44530 1284 I-10 92,00,000 3,42,89,000 2 Sh. Kamal Kant Malik 36432 10-I-10 65,00,000 2,80,52,640 3 M/s Nyas Infrabuild Pvt. Ltd. 36432 1127-I-10 75,00,0000 2,80,52,640 4 M/s Shree vaas Infrastructure Pvt. Ltd. 48600 204-I-11 1,00,00,000 3,74,22,000 5 M/s Saundriya Construction Pvt. Ltd. 48600 351-I-1 1,00,00,000 3,74,22,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of land at Narendra Nagar is as follows: Type of land. Value of rural land per naali Value of urban and motorable land per naali Talau 1400 2000 Avval 700 1000 Dayam 566.67 666.67 Naali is the word for measuring land in Tehri Garhwal. One naali is equivalent to 20 muthis which further is equivalent to 200 sq. mtrs. The cost of acquisition as on 1.4.1981 even if taken at the highest rate, the cost of acquisition of land sold by Maharaja Manujendra Shah should have been Rs. 2,000/- per 250 sq. mtrs. * The A.O. is required to further work out the value of capital gain tax liability after taking into consideration the material found during the course of search and collected during the course of post search enquiries. In view of the above facts and documents found and seized during the course of search and perusal of ITR for A.Y. 2011-12, it is evident that the cost of acquisition claimed is much higher. In light of the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, the Assessing Officer may be refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3). (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and sub-sections (6) and (7) of section 23A, sub-(27 of 1957), shall, with necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of the Act. Explanation I.- For the purposes of this section, Valuation Officer shall have the same meaning as in clause of section 2 of the Wealth-tax Act, 1957 (27 of 1957). Explanation 2.- For the purposes of this section, the expression assessable means the price which the stamp valuation authority would have, notwithstanding anything to the contrary contained in any other law for the time being in force, adopted or assessed, if it were referred to such authority for the purposes of the payment of stamp duty. (3) Subject to the provisions contained in sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In view of these facts, the inevitable conclusion is, that an income of s. 18,56,68,835/- has escaped assessment in the case of the assessee for A.Y. 2011-12 by reason of the failure on the part of the assessee to disclose full and truly all material facts necessary for its assessment. 6. In the present case, the live link between the material available on record and the reasons for belief that income has escaped assessment has also been sufficiently demonstrated. 7. It is worth discussing the following case laws which are relevant to the matter in hand. In the case of CIT v Nova Promoters Finlease (P) Ltd (ITA No. 342 of 2011) dated 15.02.2012, the Hon'ble Delhi High Court, which is the jurisdictional High Court, held that as long as there is a 'live link' between the material which was placed before the Assessing Officer at the time when reasons for reopening were recorded, proceedings u/s 147 would be valid. The Court also held- We are aware of the legal position that at the stage of issuing the notice u/s 148, the merits of the matter are not relevant and the Assessing Officer at that stage is required to form only a prima facie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the petitioner had sold six parcels of land of various measurements, having a cumulative area of 2,63,194 square meters. 21. The total consideration received by the petitioner against the sale of these six (6) parcels of land was Rs. 5,32,00,000/-. 22. The cumulative value, at the prevailing circle rate, of the said lands, as recorded by the AO, was Rs. 20,26,60,280/-. 23. The record discloses (concerning which there is no dispute) that the petitioner had calculated his capital gains while filing ROI by taking the circle rate concerning the six parcels of land sold by him and then arrived at the cumulative value, which, as indicated above amounted to Rs. 20,26,60,280/-. 24. The AO seems to have missed this crucial aspect and adverted to the fact that provisions of Section 50C of the Act would be applicable in the instant case. 25. A plain reading of the Section 50C of the Act would show that when consideration is received by an assessee which is less than the value adopted by any authority of the state government, for the purposes of payment of stamp duty in respect of such like transfers, the value so adopted or assessable, for the purposes of Section 48 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hwal. 31.2 This letter was, apparently, addressed by the District Magistrate to Secretary, Uttar Pradesh, wherein market rates of land for the period spanning between 1980 and 1983 were referred to. 31.3 This extract of the DCIT s letter also referred to the various types of land and the rate for the said lands, both urban and rural. The highest rate for the type of land which is referred to in tabular chart i.e., talau is Rs. 2000 per naali , which is an urban and motorable land. Each naali is equal to 20 muthis , which is equivalent to 200 square meters. Therefore, the highest rate qua each parcel of land would be approximately Rs.10 per square metre. 31.4 This very extract goes on to note that as on 01.04.1981, the cost of acquisition of land sold by the petitioner should have been Rs. 2000/- per 250 square meters, which would work out to Rs. 8 per square metre. 31.5 The AO, based on this reasoning arrived at the cost of acquisition, which is, in effect, the market value of land as on 01.04.1981, by multiplying Rs. 8 per square meter with the total land area sold by the petitioner i.e., Rs. 2,63,194/-. The product of which is Rs. 21,05,552/-. 32. Counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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