TMI Blog2022 (2) TMI 817X X X X Extracts X X X X X X X X Extracts X X X X ..... Polyvinyal (I) Ltd. [ 2017 (7) TMI 371 - DELHI HIGH COURT] and the Vijay Haishchandra Patel [ 2017 (12) TMI 865 - GUJARAT HIGH COURT] relied on the assessee. The various other decisions relied on by the ld. Counsel on this issue also support his case to the proposition that when reopening was based on the premise that the assessee has not filed his return of income as per database of the Department, but, the assessee has actually filed the return of income, then, such reopening is not in accordance with the law and has to be quashed since such reopening was based on wrong facts. We, therefore, quash the reassessment proceedings initiated by the AO and subsequent proceedings are accordingly quashed. Appeal of assessee allowed. - ITA No.3690/Del/2016 - - - Dated:- 16-2-2022 - Shri R.K. Panda, Accountant Member And Ms Suchitra Kamble, Judicial Member For the Assessee : Shri Raj Kumar, CA And Shri Sachin Kumar, CA For the Revenue : Shri Kumar Padmapani Bora, Sr. DR ORDER PER R.K. PANDA, AM: This appeal filed by the assessee is directed against the order dated 29th March, 2016 of the CIT(A)-16, New Delhi, relating to AY 2006-07. 2. There w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of the assessee. The assessee filed an application for rectification of this re-computation claiming that the appeal effect was not correctly given by the AO and that the AO had not adhered to the direction of the CIT(A) that circle rate of ₹ 21,800/- be adopted for purposes of calculation and then a deduction of 29.5% is to be allowed. In the order u/s 154 the AO rectified an error in calculation of the DVO pointed out by the CIT(A) in his order whereby the property was to be correctly valued at ₹ 1,02,57,600/- as against ₹ 1,02,07,600/- taken by the AO in the original assessment order. The assessee claimed that the AO, however, did not adopt the circle rate of ₹ 21,800/- per sq mtr as against the rate of ₹ 50,215/- per sq mtr adopted by the DVO as per directions of the CIT(A). The assessee accordingly filed the appeal against the rectification order of the AO dated 20.03.2018 on this limited issue. 5. In appeal, the ld.CIT(A) partly allowed the claim of the assessee by granting benefit of 7.5% on account of open nala and 10% on account of vicinity to the mosque, from the value arrived at by the AO. He also allowed further deduction of 12%. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of proceedings U/s. 147 / 148 and consequential Asstt. is illegal, mechanical without application of mind and un - warranted, which is also based on factually incorrect information. Ground No. 4 That without prejudice, under the facts and circumstances, approval U/s.151 is mechanical and without application of mind, hence, cannot provide a valid jurisdiction for the proceedings u/s. 147 /148. Ground No. 5 That without prejudice, under the facts and circumstances, the reference to the valuation cell is illegal and un - warranted, moreso, being made without rejection of books of accounts and also, since, made without recording satisfaction of alleged under declaration of purchase value. Ground No. 6 That without prejudice, the impugned Asstt. as well as consequential addition is un - sustainable in law in the absence of any addition for which the Re - Asstt. Proceedings were initiated. 7. The ld. Counsel for the assessee submitted that all material facts are available on record and no new facts are required to be investigated. Further, the grounds being purely legal in nature the same should be admitted for adjudication. For the above proposition, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 167 (Guj), he submitted that the Hon ble High Court in the said case has quashed the reassessment proceedings on the ground that the notice was issued on the ground that no return was filed for the year in question. The assessee, in objections, pointed out that the return was filed and income in question was disclosed. The Hon ble Court held that when the formation of belief was on factually incorrect premise, the reassessment is not sustainable. Referring to various other decisions, he submitted that where the very reason for reopening of the assessment without ascertaining whether the assessee had filed the return or not, reopening of assessment was not valid and should be quashed and set aside. 12. The ld. Counsel for the assessee, in his next plank of arguments, submitted that the reasons for reopening are that investment of ₹ 31,50,000/- for purchase of property as per sale documents has escaped assessment as no return of income was filed. He submitted that the reopening was initiated to verify the source of investment of ₹ 31,50,000/- in the property. However, in the assessment proceedings, after verification, no addition was made for declared investment in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re referring the matter to DVO. He submitted that in the absence of rejection of books of account, reference to DVO is invalid in law. For the above proposition, he relied on the following decisions:- (i) SARGAM CINEMA VS. CIT 328 ITR 513 (SC); (ii) CIT VS. BAJRANG LAL BANSAL 335 ITR 572 (DEL); (iii) LUCKNOW PUBLIC EDUCATION SOCIETY (2011) 339ITR 588(ALL); (iv) GOODLUK AUTOMOBILES (P) LTD. VS. ACIT 78 DTR (GUJ.) 104; AND (v) CIT V/S SMT, SURAJ DEVI 64 DTR (DEL) 372; 15. The ld. Counsel for the assessee submitted that there is no adverse material on record to justify the reference to DVO. Further, the report of the DVO is only on estimation since no incriminating material etc. is available on record to suggest the declared consideration as incorrect, therefore, the declared consideration cannot be doubted only on the basis of the report of the DVO. For the above proposition, he relied on the following decisions:- (i) K.P. YARGHESE VS. ITO 131 ITR 597 (SC); (ii) CIT VS. PUNEET SABHARWAL 338 ITR 485 (DEL); (iii) CIT VS. SADHNA GUPTA 352 ITR 595 (DEL); (iv) CIT VS. NAVEEN GERA 328 ITR 516 (DEL); (v) CIT VS. SMT. SHAKUNTALA DEVI 316 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the law and has to be quashed. For this proposition, we rely on the decision of the Hon ble Delhi High Court in the case of PCIT vs. RMG Polyvinyal (I) Ltd. (supra), and the decision of the Hon ble Gujarat High Court in the case of Vijay Haishchandra Patel vs. ITO (supra) relied on by the ld. Counsel for the assessee. The various other decisions relied on by the ld. Counsel on this issue also support his case to the proposition that when reopening was based on the premise that the assessee has not filed his return of income as per database of the Department, but, the assessee has actually filed the return of income, then, such reopening is not in accordance with the law and has to be quashed since such reopening was based on wrong facts. We, therefore, quash the reassessment proceedings initiated by the AO and subsequent proceedings are accordingly quashed. Since the assessee succeeds on this legal ground, the various other grounds challenging the reopening of the assessment as well as addition on merit become academic in nature and, therefore, are not being adjudicated. 21. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
