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2017 (5) TMI 773 - AT - Income TaxReopening of assessment - denying the claim of exemption u/s. 54F by assessing the capital gains in respect of the sale of property - assessment re-opened by an erroneous reason - Held that:- Once the applicability of provisions of section 53A of the Transfer of Property Act fails, there cannot be no transfer of capital asset within the provisions of section 2(47)(v) of the Act and accordingly no capital gains could arise for the assessee in assessment year 2007-08. Admittedly, the sale deeds were executed by the assessee in favour of four purchasers on 31.10.2007 and 30.05.2008 on which date only, the purchasers were placed in possession of the property by the assessee. In these facts and circumstances, the capital gains, if any, could arose only in assessment years 2008-09 and 2009-10 as the case may be and not in the year under appeal i.e., assessment year 2007-08. Merely because the assessee had erroneously admitted the capital gains in Asst Year 2007-08 and had claimed exemption u/s 54F in respect of reinvestment in property at Kodaikanal and had filed a return in response to notice u/s 148 of the Act, this very action alone would not strengthen the reasons recorded by the ld AO and confer him power to frame the reassessment. Though the assessee based on mistaken understanding of provision of Income Tax Act had filed the return in response to notice u/s. 148 of the Act disclosing capital gains and claiming exemption us 54F of the Act for the assessment year 2007-08, that mere act alone could not be treated as a reason fastening unwarranted tax liability by the assessee for the year under appeal. It is well settled that there is no estoppel against the statute and reliance in this regard placed on the decision in the case of Maynak Poddar (HUF) Vs. WTO [2003 (2) TMI 45 - CALCUTTA High Court] is very well founded. Thus we deem it fit and appropriate to admit the additional grounds raised by the assessee as it goes into the root of the matter and does not involve any investigation of facts in the light of the decision of National Thermal Power Corporation Ltd. (1996 (12) TMI 7 - SUPREME Court ). The re-assessment framed by the Ld. AO for the assessment year 2007-08 is not sustainable in law. - Decided in favour of assessee.
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