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DCIT, Circle-33, Kolkata Versus M/s Estate of Late Lai Yun Hsian Liu, Kolkata

2018 (1) TMI 510 - ITAT KOLKATA

Validity of reopening the assessment U/s 147/148 on the basis of DVO’s report in another case - no assessment and/or reassessment proceedings are pending - AO empowered to refer to the Valuation Officer - Held that:- There was no income tax proceedings pending on the date of reference made to the DVO. The assessment was reopened on the basis of DVO’s report in the case of Mr. Tung Kind Liu and not in the case of the assessee. We note that reopening the assessment U/s 147/148 of the Act on the ba .....

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a case where no assessment proceedings or reassessment proceedings of the assessee is pending before him, there is no justification to make any addition in such cases. - CIT(A) is correct in law as he relied the case of CIT vs. Umiya Co-op. Housing Society Ltd. (2006 (7) TMI 200 - GUJARAT HIGH COURT), wherein it was held that where no assessment and/or reassessment proceedings are pending, AO is not empowered to refer to the Valuation Officer, any matter for ascertaining cost of constructio .....

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rder passed by the ld Commissioner of Income Tax (Appeals)-9, Kolkata, in Appeal No.48/CIT(A)-9/Cir-33/2014- 15/Kol dated 23.04.2015, which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3)/147of the Income Tax Act, 1961 (hereinafter referred to as the Act ), dated 27.01.2014. 2. The grounds of appeal raised by the Revenue reads as follows: On the facts and in the circumstances of the case and in law, the ld. CIT(A)-9, Kolkata has erred in deciding the reopenin .....

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Term Capital Gain of ₹ 4,92,59,704/-.Facts of the case are that Mrs. Lai Yun Hsiang Liu, owner of the properties admeasuring an area of 4 Bighas 1 Cottah 11 Chittacks comprised in C.S.Plot No-355 and 3 Bighas 1 Cottah 11 Chittacks comprised in C.S Plot No.331 and 332 purchased on 08.03.1959 and 16.06.1959 respectively, and she died on 17.01.1998. The said property was executed by a will whereby Mr. Peter Liu was made the sole executor and gave bequeather and devised all her properties inc .....

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Liu of 2566 Innis Fill Road, Missianga, Ontario, L5 MRJI, Canadatemporarily residing at 47 South Tangra Road, Kolkata-700046 was residing beyondthe jurisdiction of this Court, the executor and trustee in the said will. On going through the assessment records, it was found by the AO that the cost of acquisition on the date of sale i.e. on 23.07.2008 was mentioned at ₹ 10,13,40,896/- but nowhere the value of the property at the time of acquisition was mentioned. Thus, it appeared that the a .....

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the same purchaser. During the assessment of Mr. Tung King Liu, the then D.C.I.T., Circle-33, Kolkata had referred the matter for valuation to the Valuation Cell, which resulted in reduction in valuation as on 01.04.1981.On identical principles, the cost of acquisition of the land(approximately 142 Cottahs) sold by the assessee AOP would be drastically reduced and thus the calculation of the LTCG of the assessee AOP would be substantially increased. Therefore, a reference was made to the Distri .....

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case of Tung King Liu.Accordingly, in view of the above observations, Long Term Capital Gain, short, shown by the assessee on the sale of its property was estimated at ₹ 2,83,11,540/-. After recording reasons, notice u/s 148 of the Income Tax, 1961 was issued to the assessee on 14.01.2013. In the reassessment proceedings the value determined by the D.V.O was taken at ₹ 97,34,281/- then after the amount of long term capital gain on the sale of property works out ₹ 9,39,46,450/- .....

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de to the DVO. The assessment was reopened on the basis of DVO s report in the case of Mr. Tung Kind Liu and not in the case of the assessee. Therefore, ld CIT(A), following the judgment of Hon ble Gujarat High Court, in the case of CIT vs. Umiya Co-op. Housing Society Ltd. Reported in 314 ITR 272 (Guj), wherein it was held that: When the notice under section 148 has been issued and addition has been made by adopting the value estimated by the Valuation Officer and when we found that the Assessi .....

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al on the said technical ground and held the reopening U/s 147/148, was not valid. 5. Not being satisfied with the order of ld.CIT(A), the Revenue is in appeal before us. The ld DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. 6. On the other hand, the ld. Counsel for the assessee has submitted before us that there was no income tax proceedings pending on the da .....

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