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TMI Blog2017 (5) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration, thus, the income has escaped assessment and therefore AO issued notice u/s. 148 of the Act and reopened the assessment passed u/s. 143(3) of the Act. The assessee during the appeal proceedings has objected the reopening on the ground that the assessee has disclosed all the material facts relating to the capital gain like copy of the sale deed, copy of the joint venture agreement etc., and discussed with the said assessing officer. The inference drawn subsequently after the completion of the assessment is objected to as there is no further or new information or particulars are available on the file except those give at the time of assessment. Aggrieved with the above reasons and by the assessment order, the assessee carried the appeal before the Ld.CIT(A). 3.1 Before Ld.CIT(A), the assessee has placed reliance on the judgment of the Apex court in the case o Commissioner of Income Tax vs. Kelvinator of india Ltd. reported at 320 ITR 561(SC). The conclusion drawn by the Hon'ble Supreme Court cited supra was that after 1st April, 1989, the Assessing Officer has only power to reopen the assessment under s. 147 provided that the Assessing Officer has reason to believe that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een issued beyond 4 years from the end of the, assessment year. We have already extracted the reasons recorded by the AO for issue of notice u/s. 148 of the Act. In sum and substance, the reason is that the guidelines value of the land sold is more that the consideration and hence capital gains needs to be enhanced. b) There is no averment that the assessee failed to furnish any material/document necessary for completion or assessment. Proviso to Sec. 147, reads as under:- "Provided that where an assessment under sub-section (3) of section 143 or this sectiçn has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessce to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all materials facts necessary for his assessment, for that assessment year" c) In the absence of any assertion/allegation to the effect that under- assessment if any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment order, which is not possible u/s.147 of the Act. In this case, the assessment was reopened after recording the following reasons vide Notice issued u/s.148 dated 01.07.2011: "While going through the scrutiny record, it is seen that assessee has sold four(4) flats during the year and there are total difference of Rs. 12,80,700/- in sale consideration as per guide line value admitted in document. Therefore, as per sec.50C of the IT Act the difference should be assessed or in other words the guide line value as on the date of sale should be sale consideration. Further, as per the agreement entered between the assessee and the purchaser in respect of sale of flats, the sale consideration works out to Rs. 28,02,720/- but the assessee has offered only Rs. 21,51,415/- therefore the difference of 6,50,305/- has to be assessed as escaped assessment." 6.1 Admittedly in this case, the original assessment was completed u/s.143(3) of the Act. It is a settled law that on the basis of material, prima facie, available before the Assessing Officer, opined that income chargeable to tax has escaped assessment can be formed. The word 'reason' in the phrase 'reason to believe' would mean c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons recorded by the Assessing Officer clearly speak for the under assessment of tax hence, the conditions laid above stand fulfilled in so far as re-assessment proceedings are concerned. In so far as the reasons recorded, extracted in the above portion of this order, we are satisfied that the Assessing Officer has 'reason to believe' that income has escaped assessment. This fact confers jurisdiction on him to reopen the assessment. The power to re-assess post 1st April, 1989 are much wider than these used to be before. But still the schematic interpretation of the words 'reason to believe' failing which section 147 would give arbitrarily powers to the Assessing Officer to reopen the assessment on the basis of mere change of opinion, which cannot be, per se a reason to reopen the case. The Act has not given power to the Assessing Officer to review but has only given power to re- assess. There is a conceptual difference between the two aspects as the Assessing Officer has no power at all to review the assessment. The reassessment, as stated above, has to be based on fulfillment of certain pre-conditions but the concept 'change of opinion' has to be taken into consideration other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer which the Assessing Officer could have uncovered but did not, then it is the duty of the assessee to bring it to the notice of the assessing authority. This omission or failure may be either deliberate, or even inadvertent, that is immaterial, but in case there is omission to disclose the material facts then subject to the other conditions jurisdiction to reopen is attracted. 6.4 In the present case, the assessee has shown sales consideration of property lesser than the valuation considered for registration purposes. In our opinion, the provisions of the section 50C is applicable. As per Explanation 2 of Section147 it is very clear that due to disclose lower sale consideration by the assessee, the income chargeable to tax had escaped assessment. The assessee has not produced anything before the Commissioner of Income Tax (Appeals) to show as to how this fact was fully and truly disclosed before the assessing authority and that there was not failure on the part of assessee, especially when provisions of the section 50C is applicable. Hence, the Commissioner of Income Tax (Appeals) considered the action of the Assessing Officer is fully covered by the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e u/s.5OC of the Act. The difference on this account was Rs. 12,80700/- and the same was brought to tax. Aggrieved, the assessee carried the appeal before the Ld.CIT(A). 8.1 On appeal, the Ld.CIT(A) observed that it is mandatory on the part of the AO when the sale deed value shown by the assesee is less than the guideline value which was arrived at for the purpose of stamp valuation, the AO is duty bound to adopt the same. According to Ld.CIT(A), the AO has rightly adopted the sale consideration of the property at 50C value of the Act. Accordingly the ground of appeal on this issue is dismissed. Against this the assessee is in appeal before us. 9. Before us, ld.A.R argued that by virtue of a deed of partition entered into by the assessee with his partners on 08.02.1995, the assessee was allotted vacant land of an extent of 25,096 sq.ft in Madhavaram High Road, Sembiurn Village, Chennai The assessee along with the co-owners entered into a joint venture agreement with M/s VijayaSanthi Builders on 28 11 1995, according to which in lieu of 62.5% of land agreed to be transferred the assessee would get 37.5% of the built up area in the proposed construction. This agreement underwent ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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