TMI Blog2020 (12) TMI 990X X X X Extracts X X X X X X X X Extracts X X X X ..... ue based on which the re-assessment has been initiated is whether the capital gains offered to tax in AY 2016-17 should have been offered in the earlier year i.e. AY 2012-13. Ordinarily the limitation provided for the initiation of re-assessment is four years from the end of the relevant financial year, extended to six years upon satisfaction of the conditions elaborated in the proviso to Section 147, conditional upon an order under Section 143(3) having been passed at the original instance. Since only an intimation under Section 143 (1) has been passed in this case, limitation of six years is, available. In the present case, the return of income for AY 2012-13 was not scrutinized and only the return of income of the petitioner for AY 2016-17 was taken up for scrutiny. The question of whether the capital gain is assessable in AY 2012-13 or 2016-17 is thus, a matter to be decided by the Authorities after due verification of relevant documents and in accordance with the law. Thus, while the merits of the matter relating to the year in which the instance of capital gain would fall is left entirely open for decision by the Officer, the assumption of jurisdiction is upheld. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ails of cost of construction and basis of valuation of the same. On the basis of the reply furnished by BCPL, a notice was issued on 20.12.2018 to the petitioner calling upon it to show cause why the sale consideration for the purpose of capital gains not be 70% of the total sale receipts, on the understanding that the ratio of sharing on profits between petitioner and BCPL was 70-30%. In response, while accepting the quantum of turnover per se, the petitioner submitted that the correct proportion was 69-31% and not 70-30%. The assessment was, however, completed along with the lines proposed for the SCN and is stated to be challenged by the petitioner and pending in appeal. 3. While this is so, a notice under Section 148 of the Act came to be issued on 21.03.2019 seeking to reopen the income tax assessment of the petitioner for AY 2014-15.The petitioner requested the reasons for re-assessment vide letter dated 23.09.2019 parallely filing a return of income on 03.04.2019 in response to the notice under Section 148. The reasons were furnished and read as follows: GOVERNMENT OF INDIA MINISTRY OF FIANANCE INCOME TAX DEPARTMENT DC/ACIT (OSD) CORP RG 1 CHENNAI To, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Captial gain index is 133 Cost indexed for FY 13-14 index is 939 ₹ 34,41,696 (-) Long Term Capital Gain ₹ 20,11,33,626 3. It was also learnt during the survey that the CMDA approval for the building was obtained in FY 2013-14 itself. Thus it is clear that the incidence of capital gain arose in AY 2014-15 itself. The assessee has offered capital gains in AY. 2016-17 which was subsequently assessed vide order u/s 143(3) of the Income Tax Act, 1961 dated 29.12.2018. The assessee has preferred an appeal before the CIT(A) against the above ordre u/s 143(3) of the Income-tax Act dated 29.12.2018. It is noticed that the assessee company has not offered any capital gain in AY 2014-15 which is the correct year of incidence of capital gain. Therefore, the assessment has to be reopened for AY. 2014-15 and assessed protectively to safeguard the interest of revenue. 4. The petitioner wrote to the respondent on 15.06.2019 objecting to the proposed re-assessment and pointing out that the very income proposed to be brought to tax in AY 2014-15, had suffered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely, to ascertain the correct year in which the incidence of taxing the capital gain arose. According to the revenue, the very fact that the reopening was protective would establish that the Officer had no intention whatsoever to engage in double taxation of the same income in both AY 2013-14 and 2016-17, but only wanted to ascertain the appropriate year for taxation of the capital gain. 9. The issue that arises turns on whether the assumption of jurisdiction in terms of Section 147 for AY 2012-13 is proper, particularly, seeing as the Officer only proposes a re-assessment, on protective basis. Admittedly, there has been no scrutiny assessment for AY 2012-13 and only an intimation has been passed. The issue based on which the re-assessment has been initiated is whether the capital gains offered to tax in AY 2016-17 should have been offered in the earlier year i.e. AY 2012-13. 10. Ordinarily the limitation provided for the initiation of re-assessment is four years from the end of the relevant financial year, extended to six years upon satisfaction of the conditions elaborated in the proviso to Section 147, conditional upon an order under Section 143(3) having been passed at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessees therein challenged the orders of assessment till the Income Tax Appellate Tribunal. In the wifes case an additional point taken was that the re-assessment was only by way of change of opinion and was thus unsustainable. This argument was rejected by the Tribunal stating that a protective assessment did not amount to a change of opinion but merely indicated caution on the part of the income tax officer in deciding the question of law. In further appeal, the Court was of the view that the proper approach of the Tribunal would have been to hear both the appeals together and then determine whose hands the income was assessable. The tax case filed by Mrs.Agrawal was allowed. 14. In this case the issue that arises is whether the capital gain is taxable in one year or the other and thus, it is only if the material pertaining to both years were available before the officer that a proper decision in this regard could be arrived at. 15. The petitioner argues that the order of assessment for AY 2016-17 has been challenged in appeal only on the aspect of computation of the capital gain and thus as far as the year of taxability is concerned, the order has attained finality. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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