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2013 (7) TMI 407 - ITAT MUMBAIRe opening of assessment second time - illegalities committed in the first reassessment - AO initiated proceedings for consideration of provisions of section 2(22)(e) - deemed dividend - tax the capital gains on sale of property - reference of matter to valuation officer - Held that:- The assessee objected to for considering this head of income in that proceedings which the AO, vide detailed discussion rejected in that order. Therefore, as far as the issue of capital gains is concerned this also was subject matter of assessment vide order dated 24.03.2006. There is also no dispute that the AO referred the value of property sold to the DVO and left a note in the order itself that the sale consideration will be revised after receipt of DVO's report. This order of the AO was, however, quashed by the CIT(A) on 07.02.2007 on the reason that there are no valid reasons for reopening the assessment. This order of the CIT(A) was not challenged and was accepted by the Revenue. Therefore reopening the assessment again on 13.03.2007 (within two months or so of CIT(A) order) and issuance of notice dated 26.03.2007, just before the limitation of time getting barred, is only to overcome the first proceedings which were not held to be valid. Thus as seen from the facts of the case it is only to circumvent the illegality committed by the AO in the fist assessment proceedings he has recorded the reasons for initiating second time on an issue which was subject matter of assessment in the first reassessment proceedings. Once a proceeding in respect of an item other than the one mentioned in the notice u/s 148 has been taken into consideration and the same is subsequently not upheld in appeal, it is not possible to restart the proceedings in respect of the same item afresh. See Smt. Anchi Devi vs. CIT [2008 (3) TMI 49 - HIGH COURT PUNJAB AND HARYANA] & Durgamba [1997 (7) TMI 49 - MADRAS High Court]. There is merit in assessee's contention that the AO cannot refer the matter to substitute 'fair market value' for 'full value of consideration received' in the assessment order as provisions of section 50C are not applicable. Be that as it may, since the entire proceedings are considered to be bad in law, there is no need to adjudicate the grounds on merits and the additional grounds raised & the consequential order under section 154 by AO to substitute valuation officer's fair market value. In favour of assessee.
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