TMI Blog2006 (9) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... of income for the assessment year 1998-99 on 30-11-1998 declaring an income of ₹ 36,77,200. The return of income so filed included capital gain on the sale of land and building at Saharanpur and at Chandigarh. The assessment was originally completed by the Assessing Officer by recourse to section 143(3) of the Act on 31-8-2000 whereby the capital gains, on the aforesaid two items was assessed as returned by the assessee. The assessee had sold the land and building at Saharanpur for ₹ 43,70,000 and at Chandigarh for ₹ 50,00,000. The assessee computed short-term capital gain at ₹ 77,25,318 in terms of section 50 of the Act in relation to the proportionate consideration of the building sold. The proportionate consideration of the land was considered for computing long-term capital gain amounting to ₹ 6,79,170. The Assessing Officer, subsequently by way of a notice under section 148 on 28-3-2003 reopened the earlier completed assessment on the ground that the entire capital gain on sale of land as well as the building was to be computed as a short-term capital gain in terms of the provisions of section 50 of the Act. The Assessing Officer has, thereafter f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of Omprakash Jhunjhunwala [2002] 254 ITR 152 (Cal.) (iv) CIT v. T.C. Itty Ipe [2001] 249 ITR 591 (Mad.). In addition, the learned counsel for the respondent-assessee has also defended the conclusion of the CIT (Appeals) in terms of rule 27 of the Appellate Tribunal Rules. According to the learned counsel the assessee had raised the issue relating to the validity of assumption of jurisdiction by the Assessing Officer under section 148 before the CIT (Appeals) which has been decided against the assessee. In this regard the learned counsel drew the attention of the Bench to the decision of the CIT (Appeals) in paras 4.7 to 4.12 of his order on this issue whereby the issue has been decided against the assessee. Thus, in terms of rule 27 of the Appellate Tribunal Rules, 1963, the learned counsel sought to support the order of the CIT (Appeals) on this ground. Submitting further, the learned counsel argued that after the completion of the assessment on 31-8-2000 under section 143(3) of the Act, the Assessing Officer on 4-3-2002 issued a notice under section 154 of the Act, a copy placed at pages 7 and 8 of the paper book whereby it was proposed to rectify a mistake by computi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to entertain a reason to believe that an income had escaped assessment under section 147 of the Act. That it a mere change of opinion on same set of facts would not render a valid jurisdiction with the Assessing Officer to re-open the case of the assessee under section 147/148 of the Act. In support of this proposition, the learned counsel relied upon the judgments of CIT v. Kelvinator of India Ltd. [2002] 256 ITR 1 (Delhi) (Full Bench), Foramer France v. CIT [2003] 264 ITR 560 (SC), Foramer v. CIT [2001] 247 ITR 436 (All); Duli Chand Singhania v. Asstt. CIT [2004] 269 ITR 192 (Punj. Har.). He, therefore, submitted that assessment assumed by the Assessing Officer was liable to be quashed as lacking in jurisdiction. 4. On the other hand, the learned DR has relied upon the order of the CIT (Appeals) on the issue relating to validity of assumption of jurisdiction under section 148 of the Act. 5. We have considered the rival submissions carefully and hereinafter dispose of present appeal. The issue regarding assumption of jurisdiction by the Assessing Officer under section 148 of the Act, in our view goes to root of the matter. If it is found that the Assessing Officer erred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Less : Expenses ₹ 17,935 Indexed cost (96166 331) ₹ 3,18,310 100 ₹ 3,36,245 ₹ 6,79,170 This evidence a fact situation that the Assessing Officer duly appreciated and accepted the stand of the assessee that composite sale consideration received by it for the sale of land and building was bifurcated and the computation profits relating to capital gains computed accordingly. In the case of building on which depreciation was claimed, capital gain was computed as short-term capital gain in terms of section 50 of the Act. Whereas in the case of land, on which no depreciation was claimed, the gain was computed as long-term capital gain. 7. Now, upon finalization of such assessment, the Assessing Officer proceeded to assume jurisdiction under section 148 on 28-3-2003 on the ground that the capital gain on land is also to be assessed as short-term capital gain sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to our mind, the instant case is parallel to the situation before the Hon ble Delhi High Court in the case of Jindal Films Ltd. v. Dy. CIT [1998] 234 ITR 170 . Thus, in our view, having regard to the facts, material and circumstances of the case, it was a mere change of opinion which prevailed with the Assessing Officer to initiate proceedings under section 147 of the Act, which is clearly beyond the jurisdiction envisaged under section 147/148 of the Act. As a result, we hold that the assumption of jurisdiction by the Assessing Officer to make the impugned assessment suffered from jurisdictional defect and thus is liable to be cancelled. We hold so. 8. Although our aforesaid decision would render the issue regarding the ground of appeal raised by the revenue as academic in nature yet we proceed to dispose of the same lest our aforesaid decision is altered subsequently. Hence, we proceed to consider the efficacy of the ground of appeal preferred by the revenue in this appeal. The facts have already been noted by us in the earlier paragraphs and thus, we do not dilate any further on the same. However, it is sufficient for us to notice that what the assessee had sold was land an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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