TaxTMI 
TaxTMI 
2006 (9) TMI 548
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....ct, 1956. The assessee filed a return of income for the assessment year 1998-99 on 30-11-1998 declaring an income of ₹ 36,77,200. The return of income so filed included capital gain on the sale of land and building at Saharanpur and at Chandigarh. The assessment was originally completed by the Assessing Officer by recourse to section 143(3) of the Act on 31-8-2000 whereby the capital gains, on the aforesaid two items was assessed as returned by the assessee. The assessee had sold the land and building at Saharanpur for ₹ 43,70,000 and at Chandigarh for ₹ 50,00,000. The assessee computed short-term capital gain at ₹ 77,25,318 in terms of section 50 of the Act in relation to the proportionate consideration of the building sold. The proportionate consideration of the land was considered for computing long-term capital gain amounting to ₹ 6,79,170. The Assessing Officer, subsequently by way of a notice under section 148 on 28-3-2003 reopened the earlier completed assessment on the ground that the entire capital gain on sale of land as well as the building was to be computed as a short-term capital gain in terms of the provisions of section 50 of the Act. T....
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....ar.) (iii) CIT v. Estate of Omprakash Jhunjhunwala [2002] 254 ITR 152 (Cal.) (iv) CIT v. T.C. Itty Ipe [2001] 249 ITR 591 (Mad.). In addition, the learned counsel for the respondent-assessee has also defended the conclusion of the CIT (Appeals) in terms of rule 27 of the Appellate Tribunal Rules. According to the learned counsel the assessee had raised the issue relating to the validity of assumption of jurisdiction by the Assessing Officer under section 148 before the CIT (Appeals) which has been decided against the assessee. In this regard the learned counsel drew the attention of the Bench to the decision of the CIT (Appeals) in paras 4.7 to 4.12 of his order on this issue whereby the issue has been decided against the assessee. Thus, in terms of rule 27 of the Appellate Tribunal Rules, 1963, the learned counsel sought to support the order of the CIT (Appeals) on this ground. Submitting further, the learned counsel argued that after the completion of the assessment on 31-8-2000 under section 143(3) of the Act, the Assessing Officer on 4-3-2002 issued a notice under section 154 of the Act, a copy placed at pages 7 and 8 of the paper book whereby it was proposed to rectify a mi....
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.... Assessing Officer to entertain a reason to believe that an income had escaped assessment under section 147 of the Act. That it a mere change of opinion on same set of facts would not render a valid jurisdiction with the Assessing Officer to re-open the case of the assessee under section 147/148 of the Act. In support of this proposition, the learned counsel relied upon the judgments of CIT v. Kelvinator of India Ltd. [2002] 256 ITR 1 (Delhi) (Full Bench), Foramer France v. CIT [2003] 264 ITR 560 (SC), Foramer v. CIT [2001] 247 ITR 436 (All); Duli Chand Singhania v. Asstt. CIT [2004] 269 ITR 192 (Punj. & Har.). He, therefore, submitted that assessment assumed by the Assessing Officer was liable to be quashed as lacking in jurisdiction. 4. On the other hand, the learned DR has relied upon the order of the CIT (Appeals) on the issue relating to validity of assumption of jurisdiction under section 148 of the Act. 5. We have considered the rival submissions carefully and hereinafter dispose of present appeal. The issue regarding assumption of jurisdiction by the Assessing Officer under section 148 of the Act, in our view goes to root of the matter. If it is found that the Assessing O....
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.... was computed as short-term capital gain in terms of section 50 of the Act. Whereas in the case of land, on which no depreciation was claimed, the gain was computed as long-term capital gain. 7. Now, upon finalization of such assessment, the Assessing Officer proceeded to assume jurisdiction under section 148 on 28-3-2003 on the ground that the capital gain on land is also to be assessed as short-term capital gain since land was also to be taken as part of the building and therefore, the entire sale was to be construed as sale of an asset on which depreciation was claimed and thus, leading to invoking of section 50 of the Act. In the instant case, we find that the Assessing Officer has attempted to reach to a contrary view in the proceedings proposed by him under section 148 on the same set off facts which were before him at the time of passing the original assessment order under section 143(3) on 31-8-2000. For the applicability of section 147, evidently the Assessing Officer is required to form a reason to believe that income had escaped assessment. Even under the amended provisions of section 147 it has been judicially noted that a mere change of opinion on similar set of fact....
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....emic in nature yet we proceed to dispose of the same lest our aforesaid decision is altered subsequently. Hence, we proceed to consider the efficacy of the ground of appeal preferred by the revenue in this appeal. The facts have already been noted by us in the earlier paragraphs and thus, we do not dilate any further on the same. However, it is sufficient for us to notice that what the assessee had sold was land and building. It is also not in dispute that land and building are separate capital assets even in the eyes of the Income-tax Act, 1961. Land is a capital asset falling within the scope of the definition under section 2(14) of the Act. Similarly, if we were to see the provisions of section 32 of the Act, again it envisages depreciation on building, meaning thereby that building by itself, as separate from land, is taken as a separate capital asset. Therefore, in situations where an assessee has sold the two assets by a composite agreement for a composite consideration, the assessee would be well within its right to segregate the consideration amongst the two assets and compute respective capital gains accordingly. This is precisely what the assessee in the instant case has ....