Reassessment and sale consideration disputes turn on tangible material, registered transfer timing, and agricultural land exemption verification.

Reassessment under sections 147 and 148 was treated as valid because the assessee had not filed original returns and the Assessing Officer relied on Investigation Directorate material concerning cash deposits, which was held to be tangible incriminating material; the objection based on lack of recorded satisfaction or change of opinion failed on the facts. The unregistered agreement to sell was accepted as a genuine contemporaneous document reflecting the agreed sale consideration and supporting the existence of on-money, but transfer was held to have crystallised only on the registered sale deeds in the later assessment year. The land was found to be agricultural on revenue records and the Village Administrative Officer's statement, while eligibility for exemption on the resulting capital gain required fresh factual verification.

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Issues: (i) Whether reopening of assessment under section 147 read with section 148 of the Income-tax Act, 1961 was valid for the assessment years in question; (ii) Whether the unregistered agreement to sell and surrounding material established the real sale consideration and the year in which transfer and taxability arose, and whether the claim for exemption on sale of agricultural land required fresh examination.

Issue (i): Whether reopening of assessment under section 147 read with section 148 of the Income-tax Act, 1961 was valid for the assessment years in question.

Analysis: The assessee had not filed returns originally for the relevant years, and the Assessing Officer acted on information from the Investigation Directorate regarding cash deposits in the bank account. The material was treated as tangible incriminating material sufficient to trigger reassessment proceedings. The challenge based on absence of recorded satisfaction or change of opinion did not succeed on the facts.

Conclusion: Reopening of assessment was upheld.

Issue (ii): Whether the unregistered agreement to sell and surrounding material established the real sale consideration and the year in which transfer and taxability arose, and whether the claim for exemption on sale of agricultural land required fresh examination.

Analysis: The agreement dated 07.01.2008 was accepted as a genuine contemporaneous document reflecting the agreed consideration, and the surrounding facts were held to support the existence of cash consideration and on-money. At the same time, in light of the amended registration regime, the transfer was held to have crystallised only on execution of the registered sale deeds, i.e. in the later assessment year. The land was also found to be agricultural in nature on the basis of revenue records and the Village Administrative Officer's statement, but the exact question whether the resulting capital gain qualified for exemption under section 10(37) required further factual verification by the Assessing Officer.

Conclusion: The agreement was accepted as evidencing the consideration, the transfer was held to have occurred in the later assessment year, and the exemption issue was remitted for fresh adjudication.

Final Conclusion: The reassessment survived, the assessee succeeded on the factual acceptance of the sale agreement and agricultural character of the land, but the entitlement to exemption was sent back for reconsideration, resulting in only partial relief.

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