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TMI Blog2022 (7) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... justified in law in holding that there was a transfer under Section 2(47)(ii) of the Act and there was I.T.A No.12/2015 no transfer under Section 2(47)(v) of the Act and consequently passing a perverse order on the facts and circumstances of the case? iv) Whether the Tribunal is justified in not adjudicating the issue of levy of interest under Section 234C of the Act on the facts and circumstances of the case? 2. Heard Shri. A. Shankar, learned Senior Advocate for the assessee and Shri. K.V. Aravind, learned Standing Counsel for the Revenue. 3. Brief facts of the case are, on February 10, 1996, appellant entered into an agreement to purchase property measuring 34 acres 32 guntas spread over in Padavu village and Kudupu village in Mangaluru Taluk for Rs.One Crore. He paid advance consideration of Rs.78.90 Lakhs between 1995-1996 and 1998-1999. As per the agreement, assessee was required to evict the tenants and take possession of the property. Accordingly, he entered into an agreement with the tenants on November 15, 1996 and took possession by paying of Rs.15 Lakhs. Then, he approached the owners with a request to execute the sale deed and they were postponing the same on som ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * The Assessing Officer, the First Appellate Authority and the ITAT have erred in holding that the Assessing Officer had 'reasons to believe' that the income had escaped assessment; * The ITAT has failed to appreciate that the actual date of withdrawal of the suits was not forthcoming in the MOU and therefore, the notice is based on suspicion, assumption and surmise; * That reopening of assessment based on suspicion and in the absence of 'reasons to believe', is unsustainable in law; * That receipt of any amount is a transaction and not income. The transaction was I.T.A No.12/2015 completed upon receipt of the balance sum of Rs.One Crore, on April 30, 2008; * Assessee has filed his returns for the A.Y.2008-09 and made a true disclosure of the entire transaction. 8. In substance, Shri. Shankar submitted that, to reopen an assessment, the notice must contain 'reasons to believe' and the notice issued in this case is bereft of any reasons and therefore, the entire proceedings are vitiated. 9. Shri. K.V. Aravind, for the Revenue, submitted that: * the MOU dated October 1, 2007 clearly shows that assessee had received Rs.30 Lakhs. Therefore, ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; (6) Commissioner of Income-tax Vs. Dr. N. Thippa Setty (2010)322 ITR 525 (KAR) to contend that the reasons recorded should disclose prima facie case with regard to escaped assessment. (7) Commissioner of Income-tax Vs. Orient Craft Ltd (2013) 29 Taxmann.com 392., on the aspect of 'reasons to believe'. (8) Mohanlal Champalal Jain Vs. Income-tax Officer, Ward 1(2) Thane [2019] 102 taxmann.com 293 (Bombay) to contend that the Assessing Officer ought to have verified that income in the hands of assessee was prima facie chargeable to tax. 13. Shri. Aravind has relied upon Assistant Commissioner of Income-tax Vs. Rajesh Jhaveri Stock Brokers (P)Ltd (2007) 291 ITR 500 (para 16) and contended that at the stage of issuance of notice, the final outcome of the proceeding is not relevant. It is sufficient, if the Assessing Officer had relevant material on which any reasonable person could have formed a requisite belief. Adverting to the facts of this case, he has argued that combined reading of paragraphs 1, 2 and 5 of the MOU, gives a clear indication that assessee had received Rs.30 Lakhs in that year. Therefore, in view of the law laid down in Rajesh Jhaveri, the notice is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 5. Findings Analysis of information received and the enquiries made revealed that:- (I). Theassessee has transacted in Commodities Marketat Rs.18,82,26,100/-during the A.Y.under consideration. (II). No return of income has been filed by the assessee for AY 2011-12. (III). TheProfit/Lossearned fromcommodity transactions remainsunexplainedand this income exceeding Rs.1 Lakh or more has escaped assessment since it has not been disclosed by the assessee as no return is filed by him. 6. Basis of forming reason to believe and details of escapement of income In view of the above, I have reason to believe that the income chargeable to tax of more than Rs.1 Lakh for AY 2011-12 has escaped assessment within the meaning of provisions of Sections 147 of the Income Tax Act, 1961 as no return of income has been filed by the assessee for AY 2011-12. 7. In this case, more than for years have escaped form the end of the assessment year under consideration. Hence, proposal for grant of necessary sanction to issue I.T.A No.12/2015 notice u/S. 148 of the Income Tax Act, 1961 in the above case for AY 2011-12 is submitted to the Pr. Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the First Party hereby assures and declares that he will not make any claim of whatsoever nature in the schedule property or against the aforesaid previous owners with whom he had entered into Agreement for Sale and also against the present owners namely M/S MANGALORE INTERNET CITY (P) LTD. 5) That the First Party hereby assures and confirms with the Second party that, except the above mentioned balance consideration of Rs.2,00,00,000/- (rupees two cores only), the First Party shall not make any additional claim with the Second Party or its aforesaid owners hereafter for any reason." 20. Shri. Aravind has contended that para 5 of the MOU gives an impression that Rs.30 Lakhs was received in the relevant year. The communication dated 30.10.2012 by the Income tax Officer reads thus: "Shri Wilfred D'Souza Prop:Karnataka Cashew Corporation Chikkamudnur, Kemmai Puttur 574201 Sub: Reasons for re-opening the assessment procedure - A.Y. 2008-09 - in your own case - reg Ref: 1) Your letter dated 25/10/2012 filed on 26/10/2012 **** Please refer to the above. Reason recorded for re-opening the assessment procedure u/s 147 by issuing 148 of the I.T. Act is as under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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