Reassessment objections require a separate speaking order; transfer expenses may remain deductible despite deemed consideration rules.

Reassessment procedure requires the Assessing Officer to consider objections to reopening under section 148 through a separate, speaking order before completing reassessment; merely issuing a notice under section 142(1) does not satisfy that requirement. The notes state that failure to decide the objections invalidates the reassessment and does not warrant a further opportunity to cure the defect. They also explain that section 50C determines deemed sale consideration for stamp-duty purposes but does not exclude genuine expenditure incurred as a condition of completing the transfer. Where the seller was contractually liable for conversion and related charges, and the purchaser paid and adjusted those charges against consideration, the amount may be treated as deductible transfer expenditure.

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Issues: (i) Whether the reassessment was invalid because the Assessing Officer failed to dispose of the assessee's objections to the notice under section 148 by a separate speaking order before completing reassessment. (ii) Whether, while adopting deemed sale consideration under section 50C, the assessee was entitled to deduction of Rs. 42,99,000/- as transfer expenses adjusted by the purchaser against the sale consideration.

Issue (i): Whether the reassessment was invalid because the Assessing Officer failed to dispose of the assessee's objections to the notice under section 148 by a separate speaking order before completing reassessment.

Analysis: The Tribunal found that the assessee had in fact raised objections to the reopening by letter dated 28.11.2018. The Revenue's reliance on the letter dated 06.12.2018 was rejected because it was only a notice under section 142(1) containing assessment queries and did not decide the objections. Applying the legal framework governing sections 147 and 148, the Tribunal treated disposal of objections by a separate and speaking order before completion of reassessment as mandatory. Since there was complete failure to decide the objections and not merely a procedural defect in the form of communication, the reassessment could not be sustained. The Tribunal further held that, on the facts, the Assessing Officer did not deserve a second opportunity and the matter need not be remanded.

Conclusion: The issue was decided in favour of the assessee; the reassessment order under sections 147/143(3) was set aside as invalid for failure to dispose of the objections to reopening by a separate speaking order.

Issue (ii): Whether, while adopting deemed sale consideration under section 50C, the assessee was entitled to deduction of Rs. 42,99,000/- as transfer expenses adjusted by the purchaser against the sale consideration.

Analysis: The Tribunal accepted that, under section 50C, the sale consideration had to be adopted at the value determined for stamp purposes. However, it distinguished the issue of sale consideration from the allowability of expenditure incurred as a pre-condition of the sale transaction. The sale agreement required the sellers to bear conversion and related charges for obtaining the group housing patta, and the purchaser's affidavit stated that those charges were paid by the purchaser and adjusted against the seller's share by return of three cheques aggregating Rs. 42,99,000/-. As this affidavit was not controverted and the expenditure was directly connected with effecting the transfer, the amount was treated as allowable transfer expenses deductible from the adopted sale consideration.

Conclusion: The issue was decided in favour of the assessee; notwithstanding section 50C, deduction of Rs. 42,99,000/- as transfer expenses was allowable.

Final Conclusion: The reassessment itself was annulled for non-compliance with the mandatory procedure governing objections to reopening, and on merits the Tribunal also accepted the assessee's claim for deduction of the transfer expenses connected with the sale transaction.

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