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2016 (6) TMI 1047 - HC - Income TaxReopening of assessment - reasons to believe - capital gain on sale of land - Held that:- Few facts are not disputable. The petitioner sold land to Kamal Gohil under registered deed dated 4.2.2007 at a sale consideration of ₹ 98 lacs. The land was re-sold by Kamal Gohil barely three months later for a sale consideration of ₹ 7.09 crores. Thus, there was more than seven times jump in the value of the land in about three months. As per the department, such amount was withdrawn by Kamal Gohil from his bank account through Shroffs under different cheques. The department has prima facie information at its command to believe that Kamal Gohil was also used by Iscon group of companies for routing cash sale considerations to the original land owners-sellers reducing their capital gain tax liability and that Kamal Gohil is absconding. In our opinion, the reasons cannot be said to be not germane to the question of assessable capital gains in the hands of the petitioner for the sale of the land in question. The Supreme Court in the case of Assistant Commissioner of Income-Tax vs. Rajesh Jhaveri Stock Brokers Pvt.Ltd. reported in [2007 (5) TMI 197 - SUPREME Court ] in the context of “reason to believe” held that if the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. It is true that the question of capital gain came up for consideration before Assessing Officer. It is also true that the assessee had placed the materials with respect to sale of land before Assessing Officer during such assessment proceedings. However, the question of true value of the land not being reflected in the sale consideration and the transaction itself not reflecting the correct value received by the petitioner, obviously were not part of assessment proceedings. At that stage, the Assessing Officer cannot be said to have applied his mind to these aspects of the matter which emerged lateron. The sale of land by Kamal Gohil three months after his purchase from the petitioner at a value more than seven times of the purchase cost was also not before the Assessing Officer. - Decided against assessee
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