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TMI Blog2022 (6) TMI 1514X X X X Extracts X X X X X X X X Extracts X X X X ..... convert the reassessment proceedings as his appeal or revision, in disguise, and seek relief in respect of items earlier rejected or claim relief in respect of items not claimed in the original assessment proceedings, unless the same was relatable to 'escaped income' - even in cases where the claims of the assessee during the course of reassessment proceedings relating to the escaped assessment are accepted, still the allowance of such claims has to be limited to the extent to which they reduce the income to that originally assessed and the income for the purposes of 'reassessment' cannot be reduced beyond that originally assessed. As in the case before us the assessee in the garb of reassessment proceedings which were initiated by the AO for assessing his escaped income u/s. 147 of the Act, had tried to seek re-characterizing the sale of the land in question as transaction of sale of stock-in-trade as against that claimed by him as sale of a capital asset in his original return of income, therefore, raising of the aforesaid claim of the assessee clearly falls beyond the realm of Section 147 of the Act, and thus, had rightly been rejected by the lower authorities. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment proceedings of the assessee for A.Y.2013-14, it was observed by the A.O that the assessee during the year under consideration i.e. A.Y. 2012-13 had sold lands at Village : Sakri for a sale consideration which was substantially lower than its market value, as under: Sl. No. Description of property Sale Value Market value 1. Land at Sakri 26,55,000/- 23,08,200/- 2. Land at Sakri 55,99,000/- 1,52,62,900/- Observing that the assessee had in his return of income adopted the amount of actual sale consideration and not the market value for the purpose of computing capital gain on sale of the aforesaid lands, the A.O reopened his case u/s. 147 of the Act. In compliance to the notice issued u/s. 148 of the Act the assessee filed his return of income on 09.09.2016, declaring an income of Rs. 37,80,900/-. On a perusal of the aforesaid return of income it was observed by the A.O that the assessee had two streams of income from real estate transactions, viz. (i) income that was derived by the assessee as a partner in various partnership firms which were engaged in the business of real estate development; and (ii) income that was derived by the assessee from developing of a col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the value of the properties sold at Rs. 75,40,600/- and Rs. 29,01,800/-. Adverting to the assessee s claim of deduction u/s. 54B of the Act, it was observed by the A.O that though the assessee in support of his aforesaid claim had placed on record copies of certain purchase deeds of land, however, no documentary evidence to support his claim of having purchased land at Village: Duraghat was filed before him. Accordingly, the A.O on the basis of the aforesaid facts disallowed the assessee s claim for deduction u/s. 54B of the Act to the tune of Rs. 18 lac i.e to the extent the same was claimed qua the purchase of land at Village: Duraghat. 5. On the basis of his aforesaid deliberations, viz. (i). assessing of the income/surplus arising from sale of lands at Village: Sakri under the head capital gains; and (ii) declining of the assessee s unsubstantiated claim for deduction u/s. 54B of the Act of Rs. 18 lac, the A.O vide his order passed u/s. 147/143(3) of the Act re-worked out the capital gains arising from the sale of the lands in question at Rs. 44,14,251/- and assessed the income of the assessee at Rs. 47,63,614/-. 6. Aggrieved the assessee carried the matter in appeal before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. 9. As observed by us hereinabove, it is a matter of fact borne from record that the assessee had in his original return of income that was filed on 30.09.2012, which, thereafter, was revised on 01.10.2012, disclosed the income from sale of land at Village: Sakri under the head capital gain . Admittedly, the case of the assessee was reopened by the A.O u/s. 147 of the Act, inter alia, for the reason that the sale value adopted by the assessee for computing his income under the head capital gains on sale of the lands in question was substantially lower than the FMV of the said lands. Also, as is discernible from the records, the assessee in his return of income filed u/s. 148 of the Act had re-characterized the transaction of sale of lands at Village: Sakri as a sale of stock-in-trade as against that shown by him as a sale of capital asset in his original return of income. Accordingly, it was the claim of the assessee that the surplus/accretion on the sale of the lands in question which were held by him as stock-in-trade of his real estate business was liable to be taxed as his business income and was wrongly disclosed under the head capital gains in his return of income filed u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct tried to seek relief on issues which had already attained finality. As observed by the Hon ble Supreme Court in the case of CIT Vs. Sun Engineering Works P. Ltd. (1992) 198 ITR 297 (SC), the jurisdiction of the A.O in the course of reassessment proceedings initiated u/s. 147 of the Act is confined to only such income which has escaped tax or has been under-assessed and does not extend to revising, reopening or reconsidering the whole assessment; or permitting the assessee to re-agitate questions which had been decided in the original assessment proceedings. Also, as observed by the Hon ble Apex Court the proceedings under Section 147 of the Act is for the benefit of the revenue and an assessee cannot be permitted to convert the reassessment proceedings as his appeal or revision, in disguise, and seek relief in respect of items earlier rejected or claim relief in respect of items not claimed in the original assessment proceedings, unless the same was relatable to 'escaped income'. Apart from that, it was observed by the Hon ble Apex Court that even in cases where the claims of the assessee during the course of reassessment proceedings relating to the escaped assessment ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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