2014 (6) TMI 73

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.... of land measuring 1500 sq. mtrs bearing No. G-154 situated in Ambaji Industrial Area, Abu Road for a consideration of Rs. 20,80,988/- as against purchased for Rs. 12,50,000/-, giving rise to short term capital gain of Rs. 8,30,988/-. But this capital gain has not been disclosed by the assessee in his ROI. It was also noticed that during the year the assessee had carried out some construction work at his factory site and had purchased iron and steel etc for construction amounting to Rs. 1,92,439/-. This investment was also not disclosed. Accordingly, the A.O. initiated reassessment proceedings u/s 147 r.w.s. 148 of the Income-tax Act, 1961 ['the Act', for short] with a view to assess income as the ROI had been only processed u/s 143(1) ....

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....e basis of Inspector report, even without confronting the same to the appellant was bad in law and bad on facts. c. The addition was unwarranted as no such addition was made during the year and the same is only on the basis of suspicion and surmises and contrary to the facts in the case of the appellant. 4. The interest charged u/s 234A and 234B was bad in law and bad on facts. The appellant pray for suitable costs." 4. Ground Nos. 1 and 2 are in respect of initiation of action u/s 147 r.w.s 148 of the Act. According to the assessee, no such action is justifiable. We do not agree with the ld. A.R. because u/s 147 the A.O. can assess or reassess income. When the ROI had not been regularly verified and it was only processed u/s 143(1....

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....spector which was never confronted to him. In support of his submission, the assessee referred to his letter submitted during the assessment proceedings. It was stated that in A.Y. 2005-06 the assessee had disclosed expenditure of Rs. 9,46,400/- and during the year, the interest paid on pre construction expenditure which has been treated as capital expenditure and has been debited to the plant and machinery account. The assessee also submitted copies of bills in relation to the addition made. After considering the above submissions, the ld. CIT(A) has also confirmed this addition. The assessee has challenged this addition in second appeal. 5.2 It was argued by the ld. A.R. that this addition is simply based on Inspector's report which wa....