9911796707
Advanced Search 
TMI Blog2025 (2) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... the audited balance sheet and the profit and loss account of TREPL and had also explained that TREPL owned only two floors of the Friends Colony property. AO had examined the said response and accepted the same. Clearly, the impugned order has been passed in respect of the same issue that was subject matter of examination in the earlier round. The question whether the TREPL owned the entire Friends Colony property is one that is easily verifiable by the AO. As noted above, the AO has completely ignored the petitioner's response to the notice issued u/s 148A(b) in this regard in the impugned order. Similar approach has also been adopted in the counter affidavit as well. Section 148A (d) of the Act mandates that the AO is required to pass an order on the basis of record and considering the response to the notice u/s 148A(b). In this case, the record indicates that the information on the basis of which the assessment is sought to be reopened was fully examined in the earlier round of reassessment under Section 147 read with Section 144B of the Act. Petitioner's response clearly stated that TREPL owned only two floors of the Friends Colony property and there is nothing credible on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 017-18 for the same reason that has led the AO to pass the impugned order holding that it is a fit case for issuance of the impugned notice. 7. The petitioner is an individual and there is no dispute that she files her income tax returns regularly. She had filed her return for AY 2017-18 on 02.08.2017 declaring her taxable income as Rs. 74,77,750/-. The said income also included income arising from sale of 1,70,000 (One Lac Seventy Thousand) shares of TREPL at the rate of Rs. 42/- per share. The petitioner claims that the said rate was settled on the basis of valuation report, whereby the shares of TREPL were valued taking into account its underlying assets including the first and third floor of the property bearing the address A-20, Friends Colony East, New Delhi (hereafter the Friends Colony property). The petitioner's return was processed under Section 143(1) of the Act. 8. On 31.03.2021, the AO issued a notice under Section 148 of the Act, as in force at the material time, calling upon the petitioner to file her return for AY 2017-18 within a period of fifteen days from the date of the said notice. Subsequently, the AO furnished the reasons for reopening the assessment. The r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be further investigated. *** *** *** In view of the above information, other related facts available on record and preliminary enquiries conducted by this office, I have reasons to believe that an income to the tune of Rs. 18,91,41,050/- or more on account of undervaluation of shares transferred for AY 2017-18, has escaped assessment for Assessment. In order to assess the above income or any other income which comes to notice subsequently in the course of proceedings u/s 147, issue of notice u/s 148 of the income-tax, 1961 is necessary in this case." 9. It is apparent from the above that the petitioner's assessment was reopened on the premise that the petitioner as well as certain other companies had sold the shares of TREPL to one Mr. Samir Dev Sharma during the Financial Year 2016-17 at an abysmally low value. 10. During the course of the reassessment proceedings, the AO issued a notice under Section 143 (2) read with Section 147 of the Act calling upon certain information including the information that was relevant for determining the market value of the Friends Colony property. 11. The petitioner responded to the said notice and provided the information as sought for. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y other information or explanation required by yourself in this regard and you are further requested to kindly close the proceedings and accept the ITR filed and in case there is any deviation, than kindly provide the reasonable opportunity to explain." 13. The explanation as provided by the petitioner was accepted and the AO passed an assessment order dated 29.03.2022 accepting the petitioner's returned income. 14. The AO once again issued a notice dated 28.03.2024 under Section 148A(b) of the Act enclosing therewith an annexure containing information which according to the AO, suggested that the petitioner's income had escaped assessment and accordingly, called upon the petitioner to show cause why her assessment for AY 17-18 not be opened. It would be apposite to refer to the information contained in the annexure to the notice dated 28.03.2024. The same is reproduced below: "ANNEXURE Information has been made available to this office with respect to SARIKA KANSAL PAN: AAKPK2388K in accordance with Risk Management strategy formulated by the Board on Insight Portal under High Risk CRIU/VRU information for AY 2017-18. 2. Information as available on Insight Portal with respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that whereas in the earlier round of proceedings, the AO had reasoned that income amounting to Rs. 18,91,41,050/- for AY 2017-18 had escaped assessment, the AO now stated that the information available suggested that the income amounting to Rs. 32,35,81,536/- had escaped assessment. The said view was premised on the basis that the value of the Friends Colony property was Rs. 32,35,81,536/- and the petitioner had sold the entire Friends Colony property to Mr. Samir Dev Sharma by transferring the shares of TREPL, which owned the said property. It is material to note that this was clearly the subject matter of examination in the previous round of the reassessment proceedings that had commenced by virtue of the notice dated 31.03.2021 issued under Section 148 of the Act. 16. The petitioner responded to the notice by a letter dated 10.04.2024. Once again, the petitioner reiterated that TREPL owned only two floors of the Friends Colony property - first and third floors and each of the said floors measured 2248 sq.ft. The petitioner also explained the following: (i) That the Friends Colony property comprised of built-up building consisting of basement, ground floor, first floor, secon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of shares of Rs. 10,00,17,900/- only (assessee shares were Rs. 71,40,000). Therefore, assessee has shown low cost of property shares amounting to Rs. 1,48,63,544/- (2,20,03,544/- minus already shown as sale of shares of Rs.71,40,000/- in ITR) for AY 2017-18. Aforesaid transactions are further of the nature, Sale of immovable property, which are duly mentioned as an Immovable Property as per Explanation to Provisions of S.149(1)(b). Therefore, cumulative amount which has escaped assessment in the case of assessee in the form of asset at Rs.1,48,63,544/- is likely to amount to fifty lakhs rupees or more for the year under consideration, AY 2017-18. " 19. It is at once clear from the above that the information on the basis of which the impugned order has been passed was subject matter of examination in the earlier round of reassessment under Section 147 of the Act. The AO's reason to believe that the petitioner's income had escaped assessment, which had led to the issuance of notice dated 31.03.2021, was founded on an assumption that the petitioner had sold the shares of TREPL at a price below its correct value. The notice issued under Section 143 (2) of the Act during the said proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the petitioner in response to the notice issued under Section 143 (2) of the Act in the earlier assessment proceedings. Thus, the same does not constitute any new information with the AO to reinitiate the reassessment proceedings for the second time. Second that the schedule to the balance sheet of TREPL as referred by Mr Ohja is a schedule relating to calculation of depreciation, which indicates the assets of the said company in broad terms such as "Land", "Computers", "Office Equipment" and "Motor car". In the said context, the building is reflected as "building - A-20 Friends Colony East, New Delhi". The depreciation schedule does not purport to describe the entire Friends Colony property as an asset of TREPL. It is apparent from the above that the impugned order has been passed on surmises without any cogent material to controvert that TREPL owns only two floors of the Friends Colony property and not the entire building at the material time. 23. The question whether the TREPL owned the entire Friends Colony property is one that is easily verifiable by the AO. However, as noted above, the AO has completely ignored the petitioner's response to the notice issued under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
