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2019 (5) TMI 1702 - AT - Income TaxReopening of assessment u/s 147 - Reason for the belief that income has escaped assessment - Escaped capital gain on sale of property - HELD 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 ₹ 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. A.O, therefore, recorded reasons to believe that capital gains on sale consideration of ₹ 43,04,000/- chargeable to 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 ₹ 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. 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 [2014 (10) TMI 332 - ITAT AGRA] . - Decided in favour of assessee.
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