TMI Blog2019 (3) TMI 1752X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation before the Assessing Officer with supporting evidence in order to establish its case. AO shall decide the issue in accordance with law. Hence, the grounds of appeal raised by assessee are allowed for statistical purposes. Re-assessment u/s 147/148 - reasons recorded for reopening of assessment are on the basis of opinion of the DVO, which could not be constituted sufficient material to reopen the assessment in the hands of assessee - assessment years 2008-09, 2009-10 and 2011-12 - HELD THAT:- Assessment has been reopened in the hands of assessee on the basis of DVO report vis- -vis unexplained investment into construction of apartment building and hospital building by the assessee, can the reopening be sustained. The answer to the said is No . In ACIT Vs. Dhariya Construction Company [ 2010 (2) TMI 612 - SC ORDER] has laid down the proposition that where the Department had sought reopening of assessment based on the opinion given by the DVO; the opinion of DVO perse was not information for the purpose of reopening the assessment under section 147 of the Act. AO had to apply his mind to the information, if any, collected and must form a belief thereon. Department wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee was engaged in the business of seeds, pesticides, fertilizers. The case of assessee was taken up for scrutiny. The Assessing Officer noted that as per land transaction deed dated 25.07.2006, available on records, Shri Deepak Kundanmal Rathi of Jalna and Shri Shivratan Motilal Rathi i.e. assessee had purchased piece of land situated at Survey No.4076, Municipal Property No.1-28-76, Mantha Road, Jalna from Radesham Ramnarayan Rathi (GPA holder) and sum of ₹ 21 lakhs was paid during the year. Since the assessee had not disclosed the said payment, assessment was reopened under section 147 of the Act. The Assessing Officer issued notice under section 148 of the Act, in response to which the assessee filed revised return of income declaring total income of ₹ 1,63,490/-. Thereafter, various notices were issued to the assessee and some of them were remained un-complied with but written submissions were also filed. The Assessing Officer had asked the assessee to explain the source of investment in the said plot of land. However, because of non communication from the side of assessee and even by the co-owner, the assessment was completed under section 143(3) r.w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was registered in the capacity of respective HUF, even in the document, PAN number of HUF was mentioned. He also stated that after completion of project, Shivratan Motilal Rathi (HUF) had offered tax on property income i.e. on sale of 50% of sale consideration of said 14 flats. However, the Assessing Officer issued notice under section 148 of the Act and made addition in the hands of assessee for 50% share in investments. The learned Authorized Representative for the assessee drew our attention to various documents, which clearly states that owners of land in question were two HUFs and not the assessee in his individual capacity. The learned Authorized Representative for the assessee pointed out that all these factual aspects have not been gone into by the authorities below. 8. The learned Departmental Representative for the Revenue on the other hand, placed reliance on the orders of authorities below. 9. We have heard the rival contentions and perused the record. The assessment for assessment year 2004-05 was reopened under section 147 of the Act by the Assessing Officer after recording reasons for reopening the assessment, that the assessee in his individual capacity had ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2008-09. The additional ground of appeal raised by assessee reads as under:- 1] Learned AO has erred in reopening the assessment by forming reason to believe that income has escaped assessment based on valuation officers report without any other material on record and thereby assuming the jurisdiction of reassessment without satisfying the conditions of Section 147 of the Act. 14. The perusal of assessment order reflects that the Assessing Officer to have noted the fact that assessment for assessment year 2004-05 was completed under section 144 r.w.s. 147 of the Act. Further, during the course of said assessment, it was noted that the assessee had jointly with Shri Deepak Kundanmal Rathi, Jalna constructed residential apartment consisting of 13 flats and hospital building at plot of land in Jalna. The assessee had furnished copy of valuation report computing total investment in construction on the aforesaid land for the financial years 2006-07 to 2009-10. In the background of said information and on verification of records, the Assessing Officer noted that the aforesaid construction activities of assessee were found undisclosed in the returns of income. Therefore, in ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f reopening the assessment under section 147 of the Act. The Hon ble Apex Court further held that the Assessing Officer had to apply his mind to the information, if any, collected and must form a belief thereon. The Hon'ble Supreme Court thus, held that the Department was not entitled to reopen the assessment. 18. In the facts of present case before us, the issue is identical where the basis for reopening the assessment by the Assessing Officer is opinion of the DVO i.e. valuation report of the DVO estimating cost of construction of the property by the assessee in the respective years. The Assessing Officer on the basis of such report of the DVO has reopened the assessment and has proceeded to complete assessment proceedings against the assessee. Where the basis for reopening is report of the DVO, then applying the ratio laid down by the Hon ble Apex Court in ACIT Vs. Dhariya Construction Company (supra), we hold that the Assessing Officer is not entitled to reopen the assessment on the basis of such opinion of the DVO. Accordingly, we hold that the Assessing Officer had no authority to reopen the assessment under section 147 / 148 of the Act. Consequently, the assessment or ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
