Subject: Mr. Iqbal. He has submitted that in case of co-owner
Referred Sections:
Section 148 of the Income-tax Act, 1961.
Section 144 of the I.T. Act, 1961.
Section 54B
Section 147 of the Income Tax Act,1961.
Section 147/143(3)
Section 2(14) of the Act
Referred Cases / Judgments
Rameshwar vs. ITO 6(2), Jhansi in ITA.No.20/Agra/2014,
Badam Singh Rajpali Vs. ITO in ITA.No.358/Agra/2011 for A.Y. 2004-05
Sheo Nath Singh vs. Appellate Asst. Commissioner of Income-tax, 82 ITR 147
CIT vs. Atul Jain & Smt. Vinita Jain, 299 ITR 383
CIT vs. Smt. Paramjit Kaur, 311 ITR
Jhansi vs. ITO 6(2), Jhansi (supra).
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES "SMC" : DELHI
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
ITA.No.7134/Del./2018
Assessment Year 2009-2010
Shri Mohd. Yameen Munna,
Mohalla Moh-Kot, PO
The Income Tax Officer,
Muradnagar, Ghaziabad.
PIN201206 PAN DGDPM6101E
vs. Ward-2(1),
C/o. M/s. RRA TAXINDIA,
D-28, South Extension, Ghaziabad.
Part-I, New Delhi 110 049.
(Appellant) (Respondent)
Shri Rakesh Gupta And
For Assessee : Shri Somil Agarwal,
Advocates.
For Revenue : Shri S.L. Anuragi, Sr. D.R.
Date of Hearing : 29.04.2019
Date of Pronouncement : 02.05.2019
ORDER
This appeal by Assessee has been directed
against the Order of the Ld. CIT(A), Aligarh, Dated
10.07.2018, for the A.Y. 2009-2010.
2. Briefly the facts of the case are that as per AIR
information, during the F.Y. 2008-2009, assessee had sold
immovable property for Rs.43,04,000/-. Proceedings under
2
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
section 148 were initiated. The A.O. issued statutory notices
also. Since, there was no compliance, therefore, A.O.
proceeded to pass the assessment order under section 144
of the I.T. Act, 1961. The A.O. noted that during the
assessment year under appeal, assessee had sold ancestral
agricultural land for Rs.43,04,000/- on 27.08.2008, but, no
capital gain has been offered for taxation. As per Purchase
Deed of the agricultural land, it was purchased on
09.01.2009 for Rs.40,20,000/- + Other Expenses, in which,
assessee share was worked to Rs.20,24,070/-. Since,
assessee has purchased agricultural land within the
prescribed period, he was entitled for deduction under
section 54B of Rs.20,24,070/- and on the balance of
Rs.22,79,930/-, assessee is liable to pay tax of long term
capital gains, which have not been disclosed. The A.O.
considering the above, computed the long term capital gains
of Rs.18,01,265/-.
2.1. The assessee challenged the reopening of the
assessment as well as addition on merit. However, the Ld.
CIT(A) confirmed the reopening of the assessment. However,
3
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
the addition on merit was modified and appeal of assessee
was partly allowed.
3. The assessee, in the present appeal, challenged
the reopening of the assessment as well as addition on
merits on several grounds of appeal. Learned Counsel for
the Assessee referred to PB-17 which are reasons for
reopening of the assessment. The same is reproduced as
under :
"Shri Yameen, S/o Shri Ajmoo,
Rawli Road, Murad Naqar. Ghaziabad
(A Y 2009-10)
Reason for the belief that income has escaped assessment
On the basis of AIR information, verification letter was
issued to the assessee to verify the sale of immovable
property during F.Y. 2008-09 relevant to A.Y. 2009-10
for Rs.86,08,000/- in which assessee's share was
Rs.43,04,000/-. Though the verification letter was duly
received by the assessee, no compliance" was made.
Again a letter dated 13-10-15 was issued to furnish the
computation of capital gain and explain the source of
income but this too remained un-complied with. The
4
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
assessee has not filed return of income for the
A.Y.2009-10. Hence, I have reason to believe that
capital gain on sale consideration of Rs.43,04,000/-
chargeable to tax has escaped assessment within the
meaning of section 147 of the I T. Act, 1961 for the A.Y
2009-10. Therefore, notice u/s 148 may be issued.
Sd/-Anil Kumar Sharma,
Dated 01.02.2016 Income Tax Officer,
Ward-2(1), Ghaziabad".
3.1. He has referred to sale deed which is executed by
the assessee and the co-owner Mr. Iqbal. He has submitted
that in case of co-owner Mr. Iqbal, the A.O. passed the
assessment order under section 147/143(3) Dated
06.12.2016 and returned income have been accepted at
Rs.1,99,980/-. Copy of the computation of income is also
filed in which long term capital gains on the same property
have been computed at Rs.1,47,975/- and after adding the
interest income, total income was declared in a sum of
Rs.1,99,980/- which is accepted by the A.O. Learned
Counsel for the Assessee, therefore, submitted that A.O. has
5
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
not verified any information and did not apply the mind to
the facts of the case. The entire amount of sale
consideration could not be disclosing capital gains,
therefore, there were no reason to believe to the A.O. to have
reopened the assessment. He has submitted that the issue
is covered by the Order of ITAT, Agra Bench in the case of
Rameshwar vs. ITO 6(2), Jhansi in ITA.No.20/Agra/2014,
Dated 28.02.2014. Copy of the Order is placed on record
and provided to the Ld. D.R. The Ld. D.R. merely relied
upon the Orders of the authorities below.
4. After considering the rival submissions, I am of
the view that the issue is covered by the Order of ITAT, Agra
Bench in the case of Rameshwar vs. ITO 6(2), Jhansi (supra)
Dated 28.02.2014 in which under similar circumstances,
reopening of the assessment have been quashed. The Order
is reproduced as under :
"IN THE INCOME TAX APPELLATE TRIBUNAL
AGRA BENCHE, AGRA
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND
SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER
6
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
ITA.No.20/Agra/2014
Assessment Year 2006-07
Rameshwar Satisfaction The Income Tax Officer,
note. Dayaram alias Kallu 6(2), Jhansi, Awas Vikas
vs.
Nagaria Ka Kua outside Tiraha, Jhansi. 284003.
Unnov Gate Jhansi.
PIN-284 001.PAN AOXPR4258Q
(Appellant) (Respondent)
Appellant by : Shri Manoj Badal, C.A.
Respondent by : Shri Anirudh Kumar, Jr. D.R
Date of Hearing : 27.02.2014
Date of Pronouncement : 28.02.2014
ORDER
PER BHAVNESH SAINI, JUDICIAL MEMBER :
1. This appeal by the assessee is directed against
the order of ld. CIT(A)-II, Agra dated 05.09.2013 for A.Y.
2006-07, challenging the reopening of the assessment
under section 148 of the I.T. Act.
2. In this case, assessment proceeding has been
reopened u/s 147 of the Act after receiving information
from another Income Tax Officer i.e. ITO-6(3), Jhansi
that the assessee had sold agricultural land bearing
7
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
Arazi No 374 & 373 situated at Mauja Jhansi Khas ad
measuring 4.256 hectare for Rs.88,50,000/- on
30.05.2005 jointly with another person named Sri
Kaushal and also finding from the office record that the
assessee has not filed any return of income for the
assessment year under consideration and further
finding that the land which was sold by the assessee,
was situated within 8 kilometers of municipal limits of
Jhansi and hence, being a capital asset within the
meaning of section 2(14) of the Act and the gain arising
on sale of such land will be chargeable to capital gain
tax and therefore, after recording the reason to believe
that capital gain chargeable to tax arising out of sale of
land has escaped assessment within the meaning of
section 147 of the Act, a notice u/s 148 dated
02.08.2011 has been issued and served to the
assessee. In response to notice u/s 147, a return of
income was filed showing agricultural income of
Rs.42,000/- and long term capital loss on sale of above
land at Rs.8,79,701/-. While computing the long term
8
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
capital loss on sale of land, sale consideration was
shown at Rs.36,75,000/- and cost of land was
computed @ Rs.40/- per sq. meter as on 01.04.1981
(2.128 hectare =21280 sq. meter) and also showing the
indexed cost of improvement at Rs.3,24,237/-. On
finding that there is difference in sale consideration as
per the information received by the AO than what was
declared by the assessee [ as per the information, the
sale consideration should be Rs.85,50,000/2 =
Rs.42,75,000/- but sale consideration declared was
Rs.36,75,000/- and hence, the difference was of
Rs.6,00,000/-], the AO required the assessee to explain
the reasons for difference in the sale consideration and
the basis on which, the cost of acquisition was taken
along with cost of improvement. The assessee vide his
reply dated 28.11.2011 stated that the difference of
Rs.6,00,000/- in the amount of sale consideration was
paid to intermediaries and the cost of acquisition was
taken on the basis of the valuation report of the
Government Approved Valuer. After examining the
9
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
details furnished by the assessee with respect to sale of
land in the return of income and further filed during the
course of assessment proceeding as called for by the AO
and taking into account the information available with
him and also collected during the course of assessment
proceeding, the AO computed the long term capital gain
earned by the assessee on sale of land by taking the
sale consideration at Rs.42,75,000/- and cost of
acquisition as the value of land as on 01.04.1981
computed @ Rs.800/- per acre on the basis of
information collected from Tehsildar u/s 133(6) of the
Act as mentioned in the assessment order. The AO did
not accept valuation report submitted by the assessee
for the purpose of determining the cost of acquisition
because as per the AO, in the report, location of land is
not correctly mentioned. Computation of capital gain as
made by him in the assessment order is as under:-
Total area sold 4.256 Hectare
Assessees share in sales 2,128 Hectare
Assessees Share in sales (1 Hect. = 2.47 Acre 5,256 Acres
Total cost of land (5.256*Rs.800/-) Rs. 4205/-
10
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
Index cost of acquisition (Rs.4205/-* 497/100) Rs.20899/-
Income from long term capital gain
Sales Rs.42,75,000/-
Less : Indexed Cost of acquisition Rs. 20,899/-
Index cost of improvement Rs.3,24,237/-
Rs.39,29,237/-
In view of the above computation, the assessment is
completed at net income of Rs.39,29,860/-.
3. The assessee challenged the reopening of the
assessment as well as addition on merit before Ld.
CIT(A). The written submission filed by the assessee
before Ld. CIT(A) is incorporated in the appellate order.
The Ld. CIT(A) noted the reasons for reopening of the
assessment in the appellate order in Para 5.3, the same
are reproduced as under :-
"The ITO-6(3), Jhansi vide letter dated 25.05.2009 has
informed that during the assessment proceeding in the
case of M/s Sahara City Homes (P) Ltd., Jhansi it was
noticed that above assessee has sold land worth
Rs.85,50,000/- on 30.05.2005. In order to make
confirmation with regard to value of land, a letter was
11
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
issued on 15.02.2010 and served through registered
post to the assessee. It was required in the notice to
confirm land transaction and also to intimate as to how
the capital gain arising out of land transaction has been
reflected in his return of income. The assessee has not
replied. The land situates at Aaraji Mauja, Jhansi Khas,
Tehsil & District, Jhansi, its Khata No. 374 & 373, the
land is within the 8 km. from the Jhansi Municipality
Limit, assessee was liable for payment of capital gain
tax on the above transaction of land as per Income Tax
Act, 1961.
Sale Value of land at Jhansi Khas, Tehsil Jhansi =Rs.85,50,000/-
The assessee share is half i.e. Assessee received =Rs.42,75,000/-
Sold area of total land =4,256 hectare
Assessees share sold area =2,128 hectare
=21,280 sw. Meter
Value of land as on 01.04.81 @ Rs.10 per sq. meter = Rs.2,12,800/-
Index cost of acquisition = 2,12,800/- 497
100
=Rs.10,57,616/-
Long Term Capital Gain =42,75,000/- 10,57,616/- =Rs.32,17,384/-
12
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
However, assessee has failed to submit reply in this
regard. As per this office record, no return of income
for A.Y. 2006-07 was filed. As per these facts go to
show that assessee has failed to disclose his taxable
income and I have therefore, reason to believe that
income chargeable to tax arising out of capital gain
Rs.32,17,384/- has escaped assessment within the
meaning of section 147 of the Income Tax Act,1961.
4. Ld. CIT(A) considering the submission of the
assessee and material on record, confirmed the
reopening of the assessment and dismissed the appeal
of the assessee on that ground. On quantum, the
assessee filed revised computation to show that long
term capital gain was earned in a sum of
Rs.11,02,152/-. Thus, the appeal of the assessee was
partly allowed.
5. The assessee in the present appeal, challenged the
reopening of the assessment and learned counsel for the
assessee at the outset submitted that on identical issue,
13
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
ITAT, Agra Bench in the case of Badam Singh Rajpali
Vs. ITO in ITA.No.358/Agra/2011 for A.Y. 2004-05
quashed the reopening of the assessment vide order
dated 22.06.2012. Copy of the order is placed on
record. Learned D.R. accepted that issue is covered in
favour of the assessee on identical facts.
6. On consideration of the facts of the case, in the
light of the reason for reopening of the assessment
recorded, we find that issue is covered in favour of the
assessee by order of ITAT, Agra Bench in the case of
Shri Badam Singh Rajpali Vs. ITO (Supra) in which the
facts and finding are reproduced as under :-
2. Briefly, the facts of the case are that the assessee
had sold certain agriculture land on 05.08.2003 for a
sum of Rs.19,50,000/-. As per the AO, the assessee had
not filed any income tax return showing capital gain
arising out of sale of agriculture land. Information was
received by the AO from ITO 6(3), Jhansi that during
the year assessee had sold the land to M/s. Sahara City
14
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
Homes (P) Ltd. for a consideration of Rs.19,50,000/-
whereas the land value as per govt. rate was
Rs.11,40,000/-. On receipt of this information, the AO
had issue notice u/s. 133(6) was not replied. The
reasons as recorded by the AO for issuance of notice
u/s. 148 are reproduced as under :
Reasons recorded u/s. 148(2) of the IT Act, 1961 in the
case of Shri Badam Singh Rajpoot S/o Shri Ram Prasad
R/o 195, O/S Unnao Gate, Distt. Jhansi, AY 2004-05.
The ITO 6(3), Jhansi has informed that during the
assessment proceedings in the case of M/s. Sahara City
Homes (P) Ltd., Jhansi, it was noticed that above
assessee has sold land worth Rs.19,50,000/- on
05.08.2003 & as per govt. value Rs.11,40,000/-. In order
to make confirmation with regard to value of land, a
notice u/s. 133(6) was issued and served upon the
assessee. It was required in the notice to confirm land
transaction and also to intimate as to how the capital
gain arise out of land transaction has been reflected in
15
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
his/her return of income. Since land situates within the
8 km. from the Jhansi Municipality Limit, assessee was
liable for payment of capital gain tax on the above
transaction of land as per Income Tax Act, 1961.
However, assessee has failed to submit reply in this
regard. It goes to show that income chargeable to tax
arising out of capital gain has escaped assessment
within the meaning of sec. 147 of the IT Act, 1961.
Accordingly, proceedings u/s. 147 is initiated and
issued notice u/s. 148 of the IT Act, 1961.
2.1. The assessee challenged the reassessment
proceedings and addition on merits before the ld.
CIT(A) and submissions of the assessee have been
incorporated in the impugned order. It was explained
that the value of land as on 01.04.1981 was higher than
the consideration amount. Therefore, no return of
income was filed being the income not liable for
income-tax. It was explained that the reasons recorded
for reopening of assessment are without date. The
16
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
reasons were recorded on the basis of information
received from another officer and the AO has not
applied his mind to satisfy himself through his own
enquiry. There s no mention that the AO was having
reason to believe that the assessee has concealed the
particulars of income. The sale consideration cannot be
treated as income. The AO issued notice to verify the
transaction and was not aware whether capital gains
arise or not. Expression reason to believe, does not
mean a purely subjective satisfaction on the part of the
AO. The reasons must be held in good faith and cannot
be mere pretence. The detailed submissions of the
assessee on merits are also noted in the impugned
order. The ld. CIT(A) considering the issue of
reopening of assessment, noted in para 2.2 of the
appellate order that at the stage of initiation of
reassessment proceedings u/. 148 of the IT Act, it is a
trite law that the AO should have reason to believe that
income assessable to tax has escaped assessment. It
17
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
need not to prove conclusively and accordingly,
upheld the reassessment proceedings u/s. 148 of the IT
Act and dismissed the appeal of the assessee on this
reason.
3. The ld. counsel for the assessee reiterated the
submissions made before the ld. CIT(A) and submitted
that ingredients of section 147 of the Act have not been
satisfied in this case. Therefore, reopening of
assessment is bad in law. On the other hand, the ld. DR
relied upon the orders of the authorities below.
4. We have considered the rival submissions and
the material on record. The reasons for reopening of
assessment have been incorporated in the impugned
order, which is also reproduced above. Copy of same is
also filed at page 11 of the paper book. According to
section 147 of the it act, the essential ingredient of this
section has been that if the Assessing Officer has
reason to belief that any income chargeable to tax has
escaped assessment in any assessment year.. Therefore,
18
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
before invoking jurisdiction u/s. 147 of the IT Act, the
Assessing Officer shall have reason to believe that any
income chargeable to tax has escaped assessment. The
AO for the reasons recorded for reopening of
assessment as mentioned above has not mentioned
anything in the reasons if he was having reasons to
believe that income chargeable to tax has escaped
assessment. He has merely received information from
ITO 6(3), Jhansi that the assessee has sold the land on
05.08.2003 at the higher rate as against Government
value. The AO has not verified the information issued
notice u/s. 133(6) to the assessee and required to
confirm the transaction as to how the capital gains
arise out of the transaction. It would mean that there
was no definite information received from ITO 6(3),
Jhansi that the assessee earned any capital gains out of
the sale transaction of land in question. There was no
material with the AO to prima facie prove that the
assessee earned capital gain because he wanted the
19
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
assessee to intimate as to how capital gain arises out of
the transaction. Since no reply was submitted in this
regard before the AO, therefore, the AO presumed that
the income chargeable to tax has escaped assessment
and he initiated proceedings u/s. 147 of the IT Act. The
reasons recorded by the AO, therefore, do not satisfy
the requirement of section 147 of the it act. The AO had
not examined the information received from the ITO
6(3), Jhansi before recording the reasons for reopening
of assessment. The AO had acted only on the basis of
suspicion and it could not be said that it was based on
belief that income chargeable to tax had escaped
assessment. The Assessing Officer had to act on the
basis of reason to believe and not on reason to suspect.
The information received from ITO 6(3) did not
indicate as to how capital gains arise in the case of
assessee and the AO merely accepted truth in vague
information in a mechanical manner and put the
assessee under obligation to file reply to the same.
20
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
Merely because no reply was filed, the AO acted in
haste and initiated proceedings u/s. 147 of the IT Act
without recording satisfaction for initiation of
proceedings in the matter. Honble Supreme Court in
the case of Sheo Nath Singh vs. Appellate Asst.
Commissioner of Income-tax, 82 ITR 147 held
"The words reason to believe suggest that
the belief must be that of an honest and
reasonable person based upon reasonable
grounds and that the Income-tax Officer
may act on direct or circumstantial
evidence but not on mere suspicion, gossip
or rumour. The Income-tax Officer would
be acting without jurisdiction if the reason
for his belief that the conditions are
satisfied does not exist or is not material
or relevant to the belief required by the
section. The court can always examine this
aspect though the declaration or
21
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
sufficiency of the reasons for the belief
cannot be investigated by the court.
4.1 Honble Delhi High Curt in the case of CIT vs.
Atul Jain & Smt. Vinita Jain, 299 ITR 383 held
"There must be reason to believe warranting the
issuance of a notice of reassessment by the
Assessing Officer. If there are no reasons, then
the entire foundation for initiating the
proceedings is bad and the notice initiating
proceedings must be quashed. Mere satisfaction
of the Assessing Officer for the issuance of a
notice is not enough, there must be reasons on
record which led him to believe that a notice
should be issued. After a foundation based on
information is set up, there must still be some
reasons which warrant the holding of a belief so
as to necessitate the issuance of a notice under
section 148 of the Income-tax Act, 1961.
22
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
The assessee purchased shares and
subsequently sold these shares at a much higher
value. For the assessment year 1997-98, the
assessees disclosed long-term capital gains
arising from the transaction. On the basis of the
information received by the Deputy Director
(Investigation), the Assessing Officer issued
notice under section 148. The files were then put
up before the Commissioner and in response to
the question whether the Commissioner was
satisfied that income had escaped assessment, he
wrote yes. Thereafter, the Assessing Officer
reassessed the income and charged interest and
levied penalty. The Commissioner (appeals)
allowed relief partly but the Tribunal concluded
the issue in favour of the assessees. On appeal:
Held, dismissing the appeals, that the only
information was that the assessee had taken a
bogus entry of capital gains by paying cash along
23
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
with some premium for taking a cheque for that
amount. The information did not indicate the
source of the capital gains which in this case
were shares. There was no information which
shares had been transferred and with whom the
transaction had taken place. The Assessing
Officer did not verify the correctness of the
information received by him but merely accepted
the truth of the vague information in a
mechanical manner. The Assessing Officer had
not even recorded his satisfaction about the
correctness or otherwise of the information for
issuing a notice under section 148. What had
been recorded by the Assessing Officer as his
reasons to believe was nothing more than a
report given by him to the Commissioner. The
submission of the report was not the same as
recording of reasons to believe for issuing a
notice. The Assessing Officer had clearly
24
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
substituted form for substance and therefore the
action of the Assessing Officer was not
sustainable."
4.2. Honble Punjab & Haryana High Court
in the case of CIT vs. Smt. Paramjit Kaur, 311 ITR
38 held :
"The assessee filed her original return declaring
nil income. The Assessing Officer initiated
reassessment proceedings on the basis of
information received from the survey circle that
the assessee had got prepared a demand draft for
a sum of Rs.83,040 which was not accounted in
the books of account of the assessee. On appeal
by the assessee the first appellate authority
upheld the validity of the notice under section
148 of the Income-tax Act, 1961, but set aside the
assessment on the addition made by the
Assessing Officer and remitted the matter to him
25
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
to frame a fresh assessment. On second appeal,
the Tribunal held that since the Assessing Officer
failed to incorporate the material and its
satisfaction for reopening the assessment, the
same was invalid. On a reference :
Held, that the Assessing Officer had not
examined the information received from the
survey circle before recording his own
satisfaction of escaped income and initiating
reassessment proceedings. The Assessing Officer
had thus acted only on the basis of suspicion and
it could not be said that it was based on belief
that the income chargeable to tax had escaped
income. The Assessing Officer had to act on the
basis of reasons to believe and not on reasons to
suspect. The Tribunal rightly concluded that the
Assessing Officer had failed to incorporate the
material and his satisfaction for reopening the
assessment and therefore the issuance of notice
26
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
under section 148 of the Act for reassessment
proceedings was not valid.
4.3 Considering the reasons for reopening of
assessment in the light of above discussion and
the case laws referred to above, we are of the
view that the AO has not satisfied the ingredients
of section 147 of the Act in the reasons recorded
for reopening of assessment. Therefore, the AO
has not correctly assumed jurisdiction u/s. 147 /
148 of the IT Act. Accordingly, we set aside the
orders of the authorities below and quash the
reassessment proceedings. It would result in
deletion of all the additions. Ground No. 1 of
appeal of assessee is, accordingly, allowed. In
view of this, the other grounds have only
academic interest and as such, we do not find it
necessary to decide the issue on merits.
27
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
5. In the result, the appeal of the assessee is
allowed."
7. In view of the above, the orders of the
authorities below are quashed and the addition
made stands deleted.
Appeal allowed.
Order pronounced in the open Court.
Sd/-PRAMOD KUMAR Sd/-BHAVNESH SAINI
ACCOUNTANT MEMBER JUDICIAL MEMBER"
4.1. It is well settled Law that validity of reopening of
the assessment shall have to be judged with reference to the
reasons recorded for reopening of the assessment. In the
present case, the A.O. has mentioned in the reasons that
assessee sold the property and his share comes to
Rs.43,04,000/-. Since, no compliance was made by the
assessee, the A.O, therefore, presumed that there is an
escapement of income on account of long term capital gains.
The A.O, therefore, recorded reasons to believe that capital
gains on sale consideration of Rs.43,04,000/- chargeable to
28
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
tax has escaped assessment. The A.O. did not verify the
information and even did not compute as to how much
capital gain have been escaped assessment in the facts of
the case. The reasons are thus, vague and did not show any
application of mind on the part of the A.O. The A.O. in the
case of the co-owner of the same property Shri Iqbal has
accepted the long term capital gains in a sum of
Rs.1,47,975/- on the same set of facts. It would show that
A.O. did not verify the information as to how much capital
gains has escaped assessment. The A.O, therefore, acted
only on the basis of suspicion and it could not be said that
it was based on belief that income chargeable to tax had
escaped assessment. The A.O. had to act on the basis of the
reasons to believe and not on reasons to suspect. The issue
is, therefore, covered in favour of the assessee by the Order
of ITAT, Agra Bench in the case of Rameshwar, Jhansi vs.
ITO 6(2), Jhansi (supra). Following the same decision, I set
aside the Orders of the authorities below and quash the
reopening of the assessment. Resultantly, all additions
stand deleted. Appeal of Assessee is allowed.
29
ITA.No.7134/Del./2018 Mohd.
Yameen Munna, Ghaziabad.
5. In the result, appeal of Assessee allowed.
Order pronounced in the open Court.
Sd/-
(BHAVNESH SAINI)
JUDICIAL MEMBER
Delhi, Dated 02nd May, 2019
VBP/-
Copy to
1. The appellant
2. The respondent
3. CIT(A) concerned
4. CIT concerned
5. D.R. ITAT `SMC' Bench, Delhi
6. Guard File.
// BY Order //
Assistant Registrar : ITAT Delhi Benches :
Delhi.
|
