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TMI Blog2024 (11) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... d while computing capital gain from sale of property. Accordingly, notice u/s 148 of the Act, dated 31/03/2021 was issued and served on the assessee. In response to notice u/s 148 of the Act, the assessee furnished his return of income dated 31/05/2021 declaring total income at Rs. 9,20,04,570/-. The case was selected for scrutiny and during the course of assessment proceedings, the Assessing Officer called upon the assessee to explain as to why Long-Term Capital Gain from sale of property cannot be recomputed on account of excess claim of deduction towards indexed cost of acquisition. The Assessing Officer noted that, although, the assessee has incurred expenditure of Rs. 96,18,402/- towards cost of improvement of asset, but while disallowing 30% of expenditure, for want of expenditure, it has been considered sum of Rs. 1,52,00,000/- thereby allowing excess deduction to the extent of Rs. 55,40,947/- and hence called upon the assessee to explain with relevant evidences. In response, the assessee submitted that, the assessee has incurred sum of Rs. 1,51,59,350/- and out of it, sum of Rs. 96,18,402/- was shown in capital account and balance amount of Rs. 55,40,947/- was shown in adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred an appeal. Even during the course of assessment proceedings, corroborative evidences to substantiate expenditure has not been produced. Therefore, observed that, there is no merit in legal ground taken by the assessee, challenging the reopening of the assessment because, the reasons recorded by the Assessing Officer for forming a reasonable belief of escapement of income has nexus with material which suggest escapement of income on account of excess deduction towards indexed cost of acquisition. The learned CIT (A) had also upheld the computation of indexed cost of acquisition by considering an amount of Rs. 96,18,402/- by the Assessing Officer, on the basis of amount debited into capital account towards improvement to asset and held that, as per the financial statement of the assessee, the assessee has only incurred an amount of Rs. 96,18,402/- towards improvement to the asset and thus, the Assessing Officer has rightly considered disallowance for the purpose of improvement to asset and further indexed cost of acquisition of an asset, for the purpose of computing Long-Term Capital Gain. Thus, rejected the explanation of the assessee and upheld the additions made by the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmissible under the law. In this regard, he relied upon the decision of the Hon'ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd (2010) 320 ITR 561 (S.C). 6. The learned DR, on the other hand, supporting the orders of the learned CIT (A) submitted that, if we go by the reasons recorded for reopening the assessment, it is abundantly clear that, there is fresh tangible material for the Assessing Officer to form reasonable belief of escapement of income and therefore, there is no merit in the argument of the assessee that, it is a case of change of opinion. Further, as per the Explanation to section 147 of the I.T. Act, 1961, mere production of books of account before the Assessing Officer, will not necessarily amount to disclosure within the meaning of proviso to section 147 of the Act. Therefore, the argument of the assessee that, as per the proviso to section 147 of the Act, the assessment cannot be reopened, unless there is an allegation from the Assessing Officer, on the part of the assessee to disclose fully and truly all material facts necessary for his assessment is devoid of any merit and hence the learned CIT (A) has rightly rejected the contentions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The Assessing Officer formed reasonable belief of escapement of income on the basis of financial statements submitted by the assessee to allege that, there is excess deduction towards indexed cost of acquisition, while computing Long-Term Capital Gain and said belief has been formed, on the basis of details submitted by the assessee which includes relevant financial statements where the assessee has claimed improvement to asset by debiting to capital account and also to advances and deposits account. The Assessing Officer refers to the cost of improvement claimed by the assessee at Rs. 1.52 crores and observed that as per capital account, improvement to asset was only at Rs. 96,18,402/. The Assessing Officer, ignored the other part of cost of improvement to asset, which was deposited in balance sheet amounting to Rs. 55,40,947/- to allege that, while completing the original assessment u/s 143(3) of the Act, the Assessing Officer has considered amount of Rs. 1.52 crores, whereas actually the amount incurred towards improvement to asset was only at Rs. 96,18,402/-. In our considered view, going by the reasons recorded by the Assessing Officer, and the basis for such reasons, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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