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2016 (4) TMI 559

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..... In the opinion of this court, the fact that the Assessing Officer in the case of the petitioner accepted the valuation report, whereas another Assessing Officer, in the case of the co-owner took a different view and did not accept the valuation of the Registered Valuer which resulted in assessment of higher income, would not constitute fresh tangible material to reopen the assessment. The view taken by the Assessing Officer in the case of the coowner, being just one of two possible views, is merely another opinion on the same set of facts. Clearly, therefore, the reopening of assessment based upon the assessment order made in the case of the co-owner is clearly a change of opinion. Having second thoughts on the same material does not warrant the initiation of a proceeding under section 147 of the Act. Excessive deduction under section 54EC claimed - Held that:- From the reasons recorded, it appears that the ground for reopening is that according to the Assessing Officer the assessee is entitled to deduction of only ₹ 50,00,000/- under section 54EC of the Act and that against the decision of the Tribunal in the above case, an appeal is pending consideration before the High .....

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..... r and detailed scrutiny of documents, papers, etc., including the details in respect of the sale of one-half share in Banker s bungalow, Pritamnagar, Ahmedabad. During the course of regular assessment proceedings, the respondent issued notices dated 12.08.2013 and 10.09.2013 under section 142(1) of the Act and thereafter, from time to time, called for the details/clarifications relating to long term capital gain shown in respect of the said bungalow. It is the case of the petitioner that in response thereto, she had submitted complete details by a reply dated 08.10.2013 and thereafter, from time to time, as and when called for. The details so provided included a valuation report of the property in question as on 01.04.1981 prepared by a Registered Valuer Shri Induprasad C. Patel, allotment advice in respect of capital gain bond of Rural Electrification Corporation Ltd., the decision of Income Tax Appellate Tribunal, Ahmedabad Bench in the case of Aspi Ginwala v. ACIT, etc. After considering the aforesaid material, the Assessing Officer framed the assessment under section 143(3) of the Act on 15.10.2013 determining the taxable income of the petitioner at ₹ 9,00,460/-. 3. Th .....

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..... ase of Assistant Commissioner of Income Tax v. Dhariya Construction Co., [2010] 328 ITR 515 (SC) wherein, the court held that the opinion of the DVO per se is not an information for the purposes of reopening assessment under section 147 of the Income Tax Act, 1961. The Assessing Officer has to apply his mind to the information, if any, collected and must form a belief thereon. Reliance was also placed upon the decision of this court in the case of Vinayak Builders v. BD Garsar (OR) Successor, [2012] 27 taxmann.com 116 (Gujarat) wherein, the court placing reliance upon the above referred decision of the Supreme Court in the case of Assistant Commissioner of Income Tax v. Dhariya Construction Co. (supra), had set aside the impugned notice under section 148 of the Act on the ground that the Assessing Officer could not have reopened the assessment under section 147 of the act on the ground that the DVO had estimated the cost of construction at a higher figure than that shown by the assessee in the absence of any additional material in support thereof. 4.2 Reference was made to the decision of the Supreme Court in the case of Dilip N. Shroff v. Joint Commissioner of Income Tax, Mumba .....

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..... ection 143(3) of the Act. 5.1 Reliance was placed upon the decision of the Supreme Court in the case of Raymond Woolen Mills Ltd. v. Income Tax Officer and others, [1999] 236 ITR 34, wherein the case of the revenue was that the assessee was charging to its profit and loss account, fiscal duties paid during the year as well as labour charges, power, fuel, wages, chemicals, etc. However, while valuing its closing stock, the elements of fiscal duty and the other direct manufacturing costs were not included, which resulted in undervaluation of inventories and understatement of profits. This information was obtained by the revenue in a subsequent year s assessment proceedings. The court observed that all that was required to be seen was whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at that stage. The court was of the view that it could not strike down the reopening of the case in the facts of that case and that it would be open to the assessee to prove that the assumption of facts made in the notice was erroneous. 5.2 Reliance was also placed upo .....

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..... r years and such reopening being based upon tangible material, there is no warrant for interference by this court. 5.5 On the merits of the reopening, it was submitted that in the original assessment, the market value has been computed by accepting the report of the Registered Valuer which was misguiding. Moreover, in view of the clear and unambiguous language of section 54EC of the Act, the petitioner was entitled to deduction of only ₹ 50,00,000/- and hence, the income chargeable to tax has escaped assessment, inasmuch as, the assessee has deducted ₹ 81,00,000/- under section 84EC of the Act. It was, accordingly, urged that the petition being devoid of merit, deserves to be dismissed. 6. In the backdrop of the above facts, the validity of the impugned notice under section 148 of the Act whereby the Assessing Officer seeks to reopen the assessment for assessment year 2011-12 is required to be examined. In the present case, during the course of scrutiny assessment under section 143(3) of the Act, the Assessing Officer had issued a notices under section 142(1) of the Act, calling upon the petitioner to furnish copies of purchase and sale deeds and documentary evide .....

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..... was worked out at ₹ 3,67,875/- as against the fair market value worked out at ₹ 26,15,591/- by the Registered Valuer and accordingly, the indexed cost was worked out at ₹ 91,65,857/- and revised long term capital gain was taxed accordingly for assessment year 2011-12. That such decision of the Assessing Officer was upheld by the Commissioner of Income Tax (Appeals). That since the facts of Shri Asit R. Shah and the petitioner are identical, long term capital gain worked out in the case of the petitioner being based on misguiding valuation report of Registered Valuer, the long term capital gain assessed in the case of the petitioner is much below the correct value thereof. 7. The second ground for reopening is in respect of the claim of deduction of ₹ 81,00,000/- for purchase of REC Bond under section 54EC of the Act. According to the Assessing Officer, as recorded in the reasons recorded, as per the provisions of section 54EC, the assessee is entitled for deduction of ₹ 50,00,000/- and that the appeal of the Department against the decision of the Tribunal in Aspi Ginwala v. ACIT, Baroda is pending before the High Court of Gujarat and during the pend .....

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..... the audit party, is baseless on the ground that the case of the assessee was reopened on the basis of the information received from the Joint Commissioner of Income Tax, Range-2, Ahmedabad where he had assessed the assessee s co-owner and rejected the valuation report submitted by the co-owner of the same property. The Assessing Officer placed reliance upon the decision of the Supreme Court in the case of Income Tax Officer v. Selected Dalurband Coal Co. (P) Ltd., 217 ITR 597 (SC), wherein, it has been held that a communication received by Assessing Officer in discharge of official duties is information for issuance of a notice under section 148 of the Act. The Assessing Officer has, accordingly, considered the information received from the Joint Commissioner of Income Tax, Range-2, Ahmedabad in the form of an assessment order whereby, he had assessed the assessee s co-owner and rejected the valuation report submitted by the co-owner for the same property as information for the purpose of reopening the assessment. In this regard, it may be noted that in Income Tax Officer v. Selected Dalurband Coal Co. (P) Ltd. (supra), a letter was received from an external source informing the I .....

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..... sulted in assessment of higher income, would not constitute fresh tangible material to reopen the assessment. The view taken by the Assessing Officer in the case of the coowner, being just one of two possible views, is merely another opinion on the same set of facts. Clearly, therefore, the reopening of assessment based upon the assessment order made in the case of the co-owner is clearly a change of opinion. Having second thoughts on the same material does not warrant the initiation of a proceeding under section 147 of the Act. 12. Insofar as the second ground for reopening the assessment, namely, deduction under section 54EC of the Act is concerned, it is evident that during the course of proceedings under section 143(3) of the Act, the Assessing Officer had called for details in this regard and the petitioner had produced the certificates issued by the Rural Electrification Corporation Ltd. for a total amount of ₹ 81,00,000/- and had also placed reliance upon the decision of the Tribunal in the case of Aspi Ginwala v. ACIT, Baroda (supra) and the Assessing Officer after being satisfied as regards the claim of the petitioner, had allowed the deduction of ₹ 81,00,00 .....

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