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2022 (1) TMI 921 - ITAT AHMEDABADReopening of assessment u/s 147 - escapement of income from the sale of 2 flats - addition u/s 56 of the Act on account undisclosed income derived from sale of immovable property - HELD THAT:- AO based on the AIR/ITS information came to know that the assessee has sold 2 flats but there was no return filed by him. Accordingly, the proceedings were initiated under section 147 of the Act. Admittedly, the assessee has not filed the return of income for the year under consideration under the provisions of section 139 of the Act. Thus, in such a situation there remains no remedy with the Department except to initiate the proceedings under the provisions of section 147 of the Act on account of escapement of income. Accordingly, we confirm the initiation of the proceedings under section 147 of the Act and dismissed the ground of appeal of the assessee. Addition on account of sale of property and taxing the same as income from other sources without deducting the corresponding expenses - The assessee has produced copy of letter of delivery of title paper of flats, allotment letter, possession letter of flats and no due certificated and the confirmation from the builder. To our understanding, the onus was shifted from the assessee to the revenue to reject the confirmation filed by the assessee based on cogent reasons. The confirmation from the builder is one of the vital piece of evidence which cannot be denied on surmise and conjecture, particularly in the facts where such confirmation was also supported based on the allotment letter, title paper, possession letters and no due certificate. CIT (A) cannot reject these documents without assigning any cogent reasons. Accordingly we hold that, the assessee is entitled for deduction of ₹ 11 lakhs against the amount of sale consideration. Thus, the effective income which is liable to tax is only being the difference in the sale consideration and purchase price of the property. Thus we direct the AO to delete the amount of addition made by him except a sum which we hold that it represents the income of the assessee against the sale of flats.Hence the ground of appeal of the assessee is partly allowed.
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