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2016 (6) TMI 700 - GUJARAT HIGH COURTReopening of assessment - reasons to believe - assessee had purchased two immovable properties - non disclosure of income - Held that:- AO's opinion that when assessee had purchased two properties at such sizable cost, he could not have shown income of only ₹ 2.44 lacs and conclusion that 'income to the extent of huge transaction of ₹ 1,16,35,500/- had escaped assessment for AY 2008-09 ' lacks logic. There is no direct corelation between the purchase of properties by the assessee and his disclosure of the income during a particular period. The reason is vague and relies on the presumptions on the part of the Assessing Officer. He seems to be presuming that when the assessee had made purchase worth such huge amounts, he must disclose sizable income. Additionally, these purchases had come up for discussion by the Assessing Officer in the original scrutiny. With respect to the assessee's sale of land valued at ₹ 33.97 lacs, it is true that the same was not disclosed in the returns filed. The assessee had however, shown the sale in the earlier assessment year 2007-08. Such transaction was examined and duly taxed during such period. Apart from this, with respect to this transaction also the Assessing Officer has not recorded any reasons pointing out as to in what manner he formed a belief that the income chargeable to tax had escaped assessment. He merely stated that the assessee had indulged in transaction of sale of immovable property valued at ₹ 33.97 lacs, but shown income only of ₹ 2.44 lacs and therefore, he had reason to believe that income concerning huge transaction cost had escaped assessment. Once again, the reasons are vague and imprecise and lack invalidity. If the Assessing Officer was primafacie of the opinion that sale transaction invited capital gain which the assessee had avoided by nondisclosure, the same has not come on record in the reasons. Thus merely because the assessee failed to disclose the sale transaction would not by itself give authority to Assessing Officer to reopen the assessment. - Decided in favour of assessee
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