TMI Blog2017 (4) TMI 471X X X X Extracts X X X X X X X X Extracts X X X X ..... n the validity of the assessment and the assessment being held to be void ab initio, we see no reason to adjudicate the appeal on merit. - Decided in favour of assessee. - ITA No. 134/Hyd/2016 - - - Dated:- 7-4-2017 - Smt. P. Madhavi Devi, Judicial Member And Shri S.Rifaur Rahman, Accountant Member For Assessee : Shri Y. Ratnakar For Revenue : Ms. Suman Malik, DR ORDER Per Smt. P. Madhavi Devi, J.M. This is assessee s appeal for the A.Y 2007-08. The assessee has raised the following grounds of appeal. 1. The order of the Hon'ble Commissioner of Income Tax is against the facts of the case and provisions of law. 2. The Hon'ble Commissioner of Income Tax is not justified in sustaining the re-opening of the assessment when all the facts relating to the transaction in respect of which addition was made in the re-assessment, are available with the Department when the original assessment was made. 3. The Hon'ble Commissioner of Income Tax is not justified in sustaining the addition of ₹ 62,23,000/- under the head Capital Gain . 4. The Hon'ble Commissioner of Income Tax should have appreciated that the difference betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 1,06,96,000. The AO therefore, believed that as per section 50C, there was an escapement of income to the tune of ₹ 62,23,000. Therefore, the AO issued a notice u/s 148, dated 3.5.2013. The assessee during the course of the reassessment proceedings submitted that the sale deed was executed on 4.4.2006 in respect of the property admeasuring 420 sq. yards situated at Shaikpet Village, Road No.36, Jubilee Hills, Hyderabad in favour of his wife and that the assessee has received only a sum of ₹ 44,73,000. It was submitted that the transaction was entered into with his wife to regulate the family finances and the assessee had not received a single rupee in excess of the sale consideration mentioned in the sale deed. It was further submitted that the excess of the market value over the actual sale consideration agreed to by the assessee may be considered as a gift from the assessee to his wife and to dispel any doubt, a formal MOU had also been entered on 4.1.2006 by which it was agreed that the difference between the market value as determined by the Sub Registrar and the agreed price, the same would be treated as gift from the assessee to his wife. The assessee filed al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party transactions. She further held that the assessee s claim that the difference in the value being gift of the assessee to his wife cannot be accepted as it could only be in the nature of application of income and not diversion of the same by overriding title. She accordingly confirmed the order of the AO. Further aggrieved, the assessee is in second appeal before us. 6. Ground of appeal No.2 is against the validity of the reassessment proceedings. The learned Counsel for the assessee has advanced the following arguments in support of his contention that the reopening of the assessment is not valid: (i) The assessment in the case of the assessee was completed u/s 153A and the notice u/s 148 was issued after the expiry of 4 years from the end of the relevant A.Y and therefore, the AO is required to record the reasons for reopening of the assessment along with the finding that there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for computation of assessee s income. He submitted that the reason for reopening does not disclose any such finding. (ii) The AO is also required to record such a finding in the notice u/s 148 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such assessment shall abate. In the case before us, the original return of income was filed on 6.11.2007 whereas the search had taken place on 11.09.2007. Therefore, the search had taken place prior to the assessee s filing of the original return of income on 6.11.2007 and therefore, the assessment completed u/s 153A of the Act is a regular assessment and the AO had an opportunity to verify and complete the assessment u/s 153A r.w.s. 143(3) of the Act and the AO is therefore, required to record reasons for reopening of the assessment and further record the finding that there is an escapement of income due to the failure of the assessee to disclose fully and truly all material facts for computation of assessee s income is also the condition precedent to be fulfilled. The reasons for reopening of the assessment are recorded in the assessment order at Para 3 which read as under: During the scrutiny proceedings in the case of the assessee for the A.Y 2008-09, it was noticed that the assessee entered into an agreement of sale-cum-GPA with Smt. Chaya Kankaria for sale of property for a total consideration of ₹ 44,73,000. However, as seen from the registered document, the marke ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
