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2024 (3) TMI 662 - ITAT MUMBAIReopening of assessment u/s 147 - reopening done beyond the period of four years - Reasons to believe - action of the AO holding that cost claimed is neither through transfer of asset nor part of cost of acquisition/improvements - CIT (A) has confirmed the action of the AO holding that there was a clear link between information available with the ld. AO and the reason of belief that income chargeable to tax had escaped escapement - HELD THAT:- After examining these details and computation of short term capital gain,AO has accepted the claim of the assessee and the short term capital gain disclosed by the assessee was accepted. From the perusal of the reasons recorded as noted above, it is seen that nowhere there is any reference of any information or material coming on record and it is only from verification of same records which was there before the ld. AO during the course of original assessment proceedings, the ld. AO has entertained the reason to believe interest paid on closure of loan cannot be added to the purchase value and therefore, there short term capital gain has been worked less and excess claim has been made Admittedly, the reopening has been done beyond the period of four years from the end of the relevant assessment year and since original assessment was completed u/s. 143(3), therefore, limitation provided in proviso to Section 147 has to be strictly adhered to. The permissible condition for reopening the assessment beyond the period of four years is that there should be a failure on the part of the assessee to file the return of income or failure to disclose fully and truly all material facts necessary for assessment. There is neither failure on part of the assessee to file return of income nor failure to disclose wholly and truly all material facts, nor there is any material or information on record to show that there is failure on the part of the assessee. In fact assessee has made full disclosure in the return of income and also before the AO during the course of assessment proceedings. Once these material facts were there on the record, AO cannot reopen the case beyond the period of four years without fulfilling the conditions laid down in the proviso to Section 147. Thus, the entire reasons recorded for reopening the computed assessment beyond the period of four years is bad in law and is hereby quashed. Accordingly, the entire assessment is being quashed as same is beyond the time limit provided under proviso to Section 147. Decided in favour of assessee.
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