2023 (9) TMI 437 - BOMBAY HIGH COURT

Reopening of assessment u/s 147 - Notice issued after the expiry of four years - gain on sale of land - treating the land in question as ‘stock in trade’ or ‘capital asset’ - Petitioner had misrepresented the facts by treating the land as ‘stock in trade’ in her books of accounts instead of treating it as a ‘capital asset’ within the meaning of Section 2(47) - HELD THAT:- As during the assessment proceedings a query had been raised by the AO and Petitioner had submitted copy of agreement relating to joint development at Chikhloli vide its Chartered Account’s letter dated 17th March 2016. By a further undated letter, Petitioner, after referring to the ongoing scrutiny assessment proceedings and referring to the query that was raised during the assessment proceedings as to why the Development Agreement entered into by Petitioner with Sai Ashray should not be treated as ‘transfer of land’ and taxed accordingly, explained in detail as to why there was no ‘transfer of land’.

Thus the issue as to whether there was a transfer of land or otherwise was the subject of consideration before the AO during the assessment proceedings.

As seen in Aroni Commercials Ltd. 2014 (2) TMI 659 - BOMBAY HIGH COURT] once a query is raised during the assessment proceedings and the assessee has replied to it, it follows that the query raised was the subject of consideration of the AO while computing the assessment. It is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised.

This would also indicate that there was no failure to disclose any material fact. On that ground alone the notice issued under Section 148 of the Act has to be quashed and set side.