2016 (6) TMI 1047

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.... lacs. 3. The return of the assessee was taken in scrutiny. The Assessing Officer passed scrutiny assessment order under section 143(3) of the Income Tax Act, 1961 ("the Act" for short) on 30.12.2010. In such assessment order, the Assessing Officer did not disturb the claim of capital gain arising out of the sale transaction for a disclosed sale consideration of Rs. 98 lacs. To re-open such assessment, the Assessing Officer issued the impugned order. At the request of the petitioner, he supplied reasons recorded by him for such purpose which read as under: " Reasons recorded under section 148(2) of the I.T.Act. In this case the return of income for A.Y.2008-2009 of Rs. 10,34,32,100/- was filed by the assessee on 27.101.2009. Further assessment proceedings were completed vide order dated 30.12.2010 assessing the income at Rs. 16,08,84,047/-. As per the information received from ITO Wd. 3(1)(1), Vadodara vide letter dated 16.3.2015, Kamal Gohil has entered into a purchase transaction with M/s Palitana Sugar Mills Pvt.Ltd. (PSPL) of land of area 4946 sq.mtrs. Situated at at Plot No.17,18,61 and 64, ward no.7, City Survey no.3036//1/139, Moje Vadva, Bhavnagar registered on 4.1....

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....l Gohil makes payments to original land holders and original seller pays tax on the petty sum as decided in the agreement to sale. The substantial amount of capital gain tax was shifted in the hands of Kamal Gohil who is absconder as far as income tax proceedings are concerned." Thus, transaction undertaken by J.P.Infrastructure Pvt.Ltd. With Kamal Gohil is a sham transaction to evade tax in A.Y.2008-2009. Moreover, J.P.Infrasctucture Pvt.Ltd. Has shown sale consideration of land at R. 98,00,000/- in December, 2007 whereas on March, 2008, Stamp Duty Valuation ofland sold by Shri Kamal M.Gohil to M/s. Sterling Addlife India Limited is of Rs. 7,09,85,880/-. In view of the above, I am of the opinion that Rs. 6,11,85,880/- of income has escaped assessment for A.Y.2008-2009 and this is a fit case for reassessment by invoking the provisions of section 147 of the Income Tax Act, 1961." 4. The petitioner raised objections in the process of re-opening under communications dated 4.6.2015 and 15.7.2015 and followed up with further objections dated 27.7.2015. Such objections were however rejected by the Assessing Officer by an order dated 27.10.2015. Hence the petition. 5. Inviting....

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....m his bank account maintained with Nutan Nagrik Sahakari Bank Ltd. through Shroff by issuing cheques of different amounts. It is further recorded in the reasons that during assessment proceedings, in case of Kamal Gohil in the assessment year 2009-2010, upon discreet inquiry, it was found that the Iscon Group of companies had used Kamal Gohil as a confirming party in the group's land activities where the Iscon group would ensure that there would be sale of land to Kamal Gohil for fraction of the actual value of the land, who, in turn, would sale the land to Iscon. Payments to Kamal Gohil would be routed to original land owner who in turn, would transfer capital gain liability on Kamal Gohil who is absconding. 8. Few facts are not disputable. The petitioner sold land to Kamal Gohil under registered deed dated 4.2.2007 at a sale consideration of Rs. 98 lacs. The land was re-sold by Kamal Gohil barely three months later for a sale consideration of Rs. 7.09 crores. Thus, there was more than seven times jump in the value of the land in about three months. As per the department, such amount was withdrawn by Kamal Gohil from his bank account through Shroffs under different cheques.....

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....materials would conclusively prove the escapement is not the concerned at that stage. This is so because the formation of belief by the Assessing Officer is within the realm of subjective satisfaction (see ITO vs. Selected Dalurband Coal Co.P.Ltd. (1996) 217 ITR 597 (SC); Raymond Woolen Mills Ltd. v.ITO (1999) 236 ITR 34 (SC)" 10. Coming to the question of true and full disclosure, the contention needs summary rejection. If prima facie, the facts stated in the reasons recorded by the Assessing Officer are accepted, surely there was total lack on the part of the assessee to disclose true and full facts. Similarly the contention that the issue was examined during original assessment also needs to be rejected. It is true that the question of capital gain came up for consideration before Assessing Officer. It is also true that the assessee had placed the materials with respect to sale of land before Assessing Officer during such assessment proceedings. However, the question of true value of the land not being reflected in the sale consideration and the transaction itself not reflecting the correct value received by the petitioner, obviously were not part of assessment proceedings. A....