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2017 (3) TMI 268 - HC - Income TaxReopening of assessment - capital gain addition - transfer of land - Held that:- The sale deed has been executed by the petitioners on 27.03.2008. The sale consideration has been received by the petitioner on 27.03.2008 and the possession has also been handed over on 27.03.2008. Thus, the transfer of land has been taken place on 27.03.2008 when the sale deed has been executed. Therefore, it can be said that income has arisen in the AY 2008-09 and therefore, if at all any income has escaped assessment, the same can be said to be in AY 2008-09. By impugned notice, assessment for AY 2009-10 is sought to be reopened on the ground that income chargeable to tax has escaped assessment in 2009-10. When, it was pointed out to AO that the transfer had taken place on 27.03.2008 and therefore, it can be said that the income has arisen in the year 2008-09 and therefore, there cannot be any escapement of income in the year 2009-10, while disposing of the objection raised by the assessee against the reasons recorded, the AO has overruled the said objection by observing that as the document was registered with the SubRegistrar on 25.07.2008 and the payment of ₹ 5,23,000/- with regard to said transfer was received by assessee vide cheque no. 193533 on 3.4.2008, the transfer of land as well as sale consideration has been received by the assessee in AY 2009-10 and therefore, impugned notice is valid. However, from the sale deed dated 27.03.2008, it appears that entire sale consideration has been paid vide cheque dated 27.03.208.. Even otherwise, as per the decision of the Full Bench of this Court in the case of Hormasji Mancharji Vaid (2001 (6) TMI 58 - GUJARAT High Court ), the capital gain under Section 45 of the Act arises in the year of execution of deed and not when the same was registered with the office of the Sub-Registrar. Under the circumstances also, the AO has materially erred in forming the opinion that any income chargeable to tax has escaped assessment for the year 2009-10.Thus impugned proceedings for reopening of the assessment for AY 2009-10 and the impugned notices cannot be sustained and same deserve to be quashed and set aside. - Decided in favour of assessee.
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