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SOPAN INFRASTRUCTURE PVT LTD Versus INCOME TAX OFFICER WARD 8 (2) OR HIS SUCCESSOR

2017 (1) TMI 1192 - GUJARAT HIGH COURT

Reopening of assessment - addition made in respect of on-money received - Held that:- From the reasons recorded to reopen the assessment for A.Y 2006-2007, it appears that the same is sought to be reopened by the Assessing Officer on the basis of observations made by Assessing Officer, while framing the assessment for A.Y 2007-2008 with respect to the flats sold during the year under consideration, wherein it was found that the assessee had received on-money with respect to the flats sold and in .....

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th respect to addition made in respect of on-money received in A.Y 2007-2008, the same has been subsequently set-aside by the learned CIT [A], against which an appeal was preferred which has been dismissed on the ground of low tax effect. Considering the aforesaid facts and circumstances of the case and solely on the observations made by another Assessing Officer with respect to the subsequent assessment years ie., 2007-2008, the reopening was not permissible, more particularly in absence of any .....

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. B.N. KARIA, JJ. FOR THE PETITIONER : Mr SN DIVATIA, ADVOCATE FOR THE RESPONDENT : Mr NITIN K MEHTA, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE Mr. JUSTICE M.R. SHAH) By way of this petition under Article 226 of the Constitution of India, the petitioner-assessee has prayed for issuance of writ or order, quashing and setting aside the impugned Notice dated 26th March 2012 issued under Section 148 of the Income-tax Act, 1961 [hereinafter referred to as, the Act ] by which the Assessing Officer has .....

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7. Necessary particulars/queries were asked before framing the scrutiny assessment; including the flats sold by the assessee and the gross profit earned by the assessee, and thereafter only, the Assessing Officer framed the scrutiny assessment under Section 143 [3] of the Act. 2.1 Thereafter, beyond the period four years from the relevant assessment year, the Assessing Officer has issued impugned Notice under section 148 of the Act by which the assessment for A.Y 2006-2007 is sought to be reopen .....

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ion of ₹ 5,81,223/= was made on account of such on money receipt which is approximately 40% of the value of property sold and shown in the P&L Account. It is further observed that as per the details available on record, the assessee has made sales during the P.Y 2005-2006 relevant to A.Y 2006-2007 was ₹ 57,36,404/=. Considering the modus operandi of collection 40% of value as on money, the estimated on-money from the property sold and shown in P&L Account would be worked out .....

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objections against the reasons for reopening of the assessment. It was submitted that on the basis of the observations made in the subsequent assessment years with respect to the flats sold in the subsequent years, the finalized scrutiny assessment cannot be reopened. It was submitted that the entire issue was gone into by the Assessing Officer while framing the scrutiny assessment. It was submitted that even the basis on which the assessment is reopened ie., observations made for A.Y 2007-08, t .....

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itution of India challenging impugned Notice and reopening of the assessment for A.Y 2006- 2007. 3. Shri SN Divatia, learned advocate appearing on behalf of the petitioner-assessee has vehemently submitted that the impugned notice issued by the Assessing Officer to reopen the assessment for A.Y 2006-07 is bad in law and contrary to the provisions of Section 147; more particularly, proviso to Section 147 of the I.T Act. It is vehemently submitted by learned advocate Shri Divatia that as such ther .....

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tion and presumption that even with respect to the flats sold in the year 2006-2007, the assessee must have taken on-money. 3.1 It is further submitted by learned advocate Shri Divatia that as such, the entire issue with respect to the flats sold in AY 2006-2007 was gone into by the Assessing Officer, while framing the scrutiny assessment, and therefore, the subsequent reopening can be said to be a change of opinion by the subsequent/another Assessing Officer, which is not permissible. It is sub .....

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ld in AY 2007-2008 were out of the same scheme floated by the very assessee. It is submitted that when in the subsequent assessment year with respect to the flats sold in AY 2007-2008, it was found by the Assessing Officer that the assessee used to take onmoney, and therefore, on the basis of such material available with the Assessing Officer, when he formed an opinion that the assessee had not disclosed true and correct facts with respect to the on-money receipts by selling the flats in AY 2006 .....

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nces, unless and until conditions provided under proviso to Section 147 of the Act are satisfied ie., only if it is found that the income chargeable to tax has escaped the assessment due to non disclosure of true and correct facts by the assessee, there cannot be any reopening of the assessment. 6.1 It is also required to be noted that at the time of finalizing scrutiny assessment for AY 2006-07, a specific query was raised by the Assessing Officer with respect to difference in the price at whic .....

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detailed questionnaire was asked by the Assessing Officer before framing the scrutiny assessment under section 143 [3] of the Act which was supplied by the assessee and only thereafter, the Assessing Officer framed the scrutiny assessment for AY 2006-2007. From the reasons recorded to reopen the assessment for A.Y 2006-2007, it appears that the same is sought to be reopened by the Assessing Officer on the basis of observations made by Assessing Officer, while framing the assessment for A.Y 2007 .....

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