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TMI Blog2025 (2) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... gh co-purchaser but the same should have been taken from the seller as well and the stamp duty has not been refunded to either of the parties and the assessee failed to demonstrate before us that the agreement does not exist at this juncture.
AO has rightly taken a view and it is not a change of opinion. On merit, it is further noticed that the assessee since not filed any evidence in respect of cancellation of sale deed nor filed any details of processing the cancellation of sale deed, the Assessing Officer and the CIT(A) rightly confirmed the addition. Appeal filed by the assessee is dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee in his Balance Sheet for the year under consideration. The Assessing Officer observed that in view of the provisions of Section 69A of the Act, the value of investments which was not recorded in the books of account of the assessee and the same is required to be treated as income from the investments. Thus, the assessee purchased immovable property during the year under consideration without adequate consideration and therefore the provisions of Section 56(1)(vii) of the Act are applicable. After recording the reasons for reopening the case and also obtaining approval of the Higher Authorities, notice under Section 148 of the Act was issued on 31.03.2019. In response to notice under Section 148 of the Act, the assessee filed e-return of income on 11.04.2019 declaring total income at Rs. 1,91,252/-. Copy of the reasons recorded was provided to the assessee and the assessee furnished the reply dated 27.06.2019. The objections raised by the assessee was disposed of vide order dated 03.10.2019. The notice under Section 142(1) of the Act was also issued and the assessee furnished his reply dated 07.11.2019. The Assessing Officer made addition of Rs. 69,49,250/- as assessee's inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mere change of opinion is not valid. As the present case falls within four years of the original assessment and no tangible material has been brought to justify the reopening, the action under Section 147 is liable to be quashed. - The Assessing Officer (AO) initiated reassessment proceedings on the grounds of "inadequate consideration" as well as S.69 of the Act related to the purchase of immovable property. - The final assessment order made an addition under Section 56(2)(vii)(b) on the grounds of "without consideration", deviating from the original reasons for reopening. Moreover, when the Assessing Officer has himself found that the Appellant has not paid any consideration (no consideration), there arises no question of making an addition towards S.69 of the Act. - Judicial principles mandate that reassessment proceedings must culminate in an addition based on the reasons recorded. Failure to do so invalidates the reassessment under Section 147. CIT vs. Jet Airways (I) Ltd. [2011] 331 ITR 236 (Bom), Ranbaxy Laboratories Ltd. vs. CIT [2011] 336 ITR 136 (Del) and CIT vs. Mohmed Juned Dadani [2013] 355 ITR 172 (Guj). - The shift from "inadequate consideration" to "without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectfully submitted that it is a well settled law that there arises no income under the head capital gain on a transaction which never materialised and it is further held by the Courts that at best the said transaction may result into a hypothetical income and as there is no real income involved in such transaction, there arises no income. Reliance for this proposition is placed upon I-Process Services India Pvt. Ltd. vs. DCIT (ITAT-Delhi), placed at page No.22-24 of the Compilation of judgments. - Alternatively, and without prejudice to the above, at the cost of repetition the appellant most respectfully submits that the provisions of section 56(2)(vii) of the Act gets attracted only when an assessee "receives" an immovable property. The appellant most respectfully submits that the word receives in itself includes the element of transfer. Reliance for this proposition is placed upon the judgement of Hon'ble Gujarat High Court in the case of PCIT vs Jigar Jaswantlal Shah 460 ITR 628. - It is further most respectfully submitted that when no consideration is involved in the said transaction, the appellant most respectfully submits that there is no transfer under the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant at the outset submits that the Assessing Officer in the present case has admitted the fact that there was no consideration paid towards the purchase of the property which has been so confirmed by the sellers as well as co-owner. In such facts and circumstances of the case the addition deserves to be deleted." 5.1 The Ld. AR further submitted that as per the details given before the Assessing Officer and the chart submitted, it clearly set out that the same is not capital asset as there was no consideration given by the assessee and the land is also situated beyond the Municipal limit. The transaction itself is void though the assessee admits that the agreement is not yet cancelled but the process to cancel the same has been started. In alternate, the ld. AR submitted that the reference to DVO should be made for the valuation if Section 56(2)(vii)(c) and the proviso clearly determines that the DVO's report should be taken into consideration. 6. The Ld. DR submitted that the reopening is justifiable as the assessee has not disclosed and indicated in the return of income related to the purchase of land and the registered deed of agreement for sale of two properties. The Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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