TMI Blog2022 (1) TMI 1101X X X X Extracts X X X X X X X X Extracts X X X X ..... who issuing the notice u/s. 147 of the act does not have jurisdiction over that assessee. Despite this, the learned ITO ward 2 Gandhidham issued the notice. The assessee also put to the kind attention of the ITO Ward 2 Gandhidham vide letter dated 12 September 2016 that the jurisdiction of the assessee is at Mumbai and therefore his case may be transferred to the respective officer. Consequent to the request of the assessee on 17/11/2016 The Income Tax Officer 28(3)(4) Navi Mumbai issued notice u/s. 142(1) read with Section 129 of The Income Tax Act. Thus, it is clear that the ITO ward 2 Gandhidham did not have jurisdiction to issue notice u/s. 148 of the Act. Hence looking to the facts and circumstances of the case it is apparent that the notice u/s. 148 of the act is issued by the non-jurisdictional assessing officer and therefore not sustainable. More so for the reason that in the reasons for reopening of the assessment, the learned assessing officer has also mentioned the changed address of the assessee and despite this fact he did not apply his mind that whether he is having a jurisdiction over that assessee or not. We also failed to understand that how the approval u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Prashant Maharishi , AM 1. This appeal is filed by The Income tax Officer Ward-28(3)(4), Mumbai [The ld. AO] against the Order dated 20-02-2019 passed by The Ld. Commissioner of Income-tax (Appeals)-26, Mumbai [The Ld. CIT(A)] for the assessment year 2009-10. 2. Ld. AO has raised following grounds of appeal:- On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing relief to the assessee to the extent impugned in the grounds enumerated below: (1) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the A.O. to re-compute the Indexed Cost of Acquisition as on 01.04.1981 accepted in assessment order at ₹ 46,03,50,274/- considering 1/7th Share of the assessee on this account and allow carry forward of loss so computed under the head 'Capital Gain' to the assessee without considering the merits of the case? . (2) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the fact that the A.O. has rightly taken the share of the assessee at 1/77th of the said property Village Kanjur, Bhandup, Kurla based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had not filed his return of income for the year under consideration. As per the AIR data, the assessee had purchased an immovable property for ₹ 36 lakhs. The above transaction is not recorded in the assessee's books of account as is apparent from record. The quantum of purchase amount also exceeds the minimum amount not chargeable to tax. 2. In view of the above, I have reason to believe that income chargeable to tax for assessment year 2009 - 10 has escaped assessment within the meaning contained in Section 147 and this is a fit case for issuance of notice u/s. 148 of the IT act, 1961. (V.P. Colaco) Income tax Officer Ward - 2, Gandhidham Date 30/3/2016 1. After recording above reasons. The Principal Commissioner of Income Tax, Rajkot-1, Rajkot granted approval u/s. 151 of the Act. Accordingly, notice u/s. 148 of The Act was issued on 31/3/2016. 2. On 14/7/2016, assessee submitted that return of income filed on 14/9/2016 disclosing total income of ₹ 119,950/- may be treated as return filed in response to above notice. Assessee was provided reasons recorded for reopening of assessment on 19/9/2016 and subsequently notices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsent Terms are between 77 defendant parties. Therefore, he held that assessee being a defendant in the suit along with 76 others, assessee is entitled for 1/77th share of the property. For the computation of the capital gain, Ld. AO noted that assessee has taken 'fair market value' of his interest in 41% of the share in the land as on 1/4/1981, but, assessee did not furnish the basis of such valuation, therefore, the reference was made to the learned District Valuation Officer [DVO] on 27/12/2016 to determine the fair market value of the property as on 1/4/1981. Pending receipt of the report of DVO, learned assessing officer took the fair market value as disclosed by the assessee as on 1/4/1981. Based on FMV adopted by assessee, indexed cost of acquisition of the property [upto A.Y. 2010-11] was determined at ₹ 460,350,274/-, where assessee's share of interest in the above property was taken at 1/77th instead of 1/7th. Indexed cost of acquisition was computed at ₹ 5,978,574/-. Accordingly, long-term capital gain was computed by Ld. AO at ₹ 1,90,21,426/- considering sale consideration of ₹ 2.50 crores, reduced indexed cost of acquisition of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. Thus, he accepted claim of assessee. He further directed learned AO that accordingly there would be a loss under the head capital gains to allow carry forward of loss so computed. Thus, the appeal of the assessee was partly allowed. 10. The learned assessing officer is aggrieved with the order of the learned CIT - A with respect to the direction to the assessing officer to allow assessee deduction of 1/7th of cost of acquisition of property. He is further aggrieved with direction to allow carry forward of losses so computed, to the appellant. 11. Assessee is also aggrieved with the order of the learned CIT - A with respect to the dismissal of the ground relating to reopening of the assessment and therefore the cross objection is filed. 12. As the cross objection filed by assessee is on jurisdictional issue, the learned authorised representative referred to the paper book filed containing 29 pages. His main argument was that notice u/s. 148-dated 31st of March 2016 is issued by The Income Tax Officer based at Gandhidham, Gujarat, who does not have jurisdiction over the assessee. To substantiate his argument, he referred to the permanent account number applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of ACIT vs. Resham Petrotech Ltd. (2012) 136 ITD 185 (AHD). Therefore, the crux of his argument was that the basic requirement of Section 147 is that the assessing officer must have reason to believe that any income chargeable to tax has escaped assessment and such belief must be belief of jurisdictional assessing officer and not of any other assessing officer or authority or department. According to him the jurisdiction lies with the assessing officer at Navi Mumbai and not with the assessing officer at Gandhidham Gujarat and therefore no valid notice was issued to the assessee u/s. 148 of the Income Tax Act and in absence of the same entire proceedings taken by ld. AO becomes void for want of jurisdiction. 14. On the merits of the case, he submitted that assessee has received sale consideration on account of transfer of the right/title and interest in an ancestral property located at Kula. The assessee has received share in the ancestral property from his ancestor Shri Shivji Raghavji who had 7 successors behind him including the assessee. Shri Shivji Raghvaji had 41% share in the rights title and interest in the property. He expired and property was inherited by the seve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used the orders of the lower authority as well as the paper book filed by the learned authorised representative before us. We have also carefully perused the various judicial precedents cited before us. 19. Clearly, in this case the income tax officer (2), Gandhidham, Gujarat, issued notice u/s. 148 of the income tax act on 31/3/2016. While issuing the above notice the learned assessing officer has courted the permanent account number of the assessee as AEDPT9529A. In the 148 notice also the learned assessing officer has mentioned the address of the assessee as Shri Thakkar Vasant Purshottam 501, plot number 38, Shambhu Apts 501, Shambhu Apt, Sec. 44A, Nerul Navi Mumbai, Mumbai, Maharashtra 400706 d.vvnathani@gmail.com 20. Now it is required to be seen that when learned AO Gandhidham issued the notice to the assessee, where the jurisdiction of the assessee lies. The assessee has made a change request on 16 September 2015 in the permanent account number AEDPT9529A wherein at serial number seven of the change in PAN data application he has mentioned the above address. To support that application assessee submitted as a proof of address AADHAR card. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23. In view of this as the notice u/s. 148 of the income tax act is issued by the non jurisdictional officer same is not sustainable in law and therefore same deserves to be quashed and hence so quashed. Accordingly the cross objection of assessee is allowed. 24. Even on the merits of the case we find that the learned CIT - A has correctly held that the learned assessing officer has grossly failed in determining the sale of the appellant for the next cost of acquisition as on 1/4/1981 at 1/77 share of the appellant in 41 percent undivided right titles share and interest in the said property because of the reason that for the purpose of considering the sale consideration the share of the assessee is considered 1/7 and therefore the cost of acquisition should also be granted to the assessee in the same proportion. The view taken by the learned assessing officer of considering the sale consideration of the assessee considering assessee has 1/7 co-owner and granting the cost of acquisition to the assessee considering that assessee is 1/77th co-owner of the impugned property is completely devoid of any logic and contrary to the facts recorded in the assessment order itself. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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