TaxTMI 
TaxTMI 
2017 (9) TMI 523
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....n of purchase of property from M/s AIAL is not beyond doubt. The said finding is illegal and unjustified. 4. That learned CIT(Appeals) has erred in holding that that Assessing Officer was justified in rejecting the deduction claimed by the appellant u/s 54F of the IT Act and it failed to satisfy the necessary ingredients required for allowing deduction u/s 54F of the Act. The said finding is illegal and unjustified. The assessee was clearly entitled to get deduction u/s 54F of the Act. 5. That learned CIT(Appeals) has erred in confirming the action of the Assessing Officer in charging interest u/s 234B, 234C and 234D and withdrawing interest granted u/s 244A of the IT Act. the said finding is illegal and unjustified." 2. Briefly the facts of the case are that the appellant had filed his return of income on 07.10.2008 declaring an income of Rs. 34,00,610/-. The assessment was thereafter completed u/s 143(3) of the Act vide order dated 13.12.2010 and the total income was determined at Rs. 34,10,140/-. In the return of income, the appellant had clubbed income of his minor daughter, who had earned long term capital gains from the sale of shares of M/s SEMCO Electri....
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....ipur (AIAL) on its own. However, it does not mean that the AO has raised queries about its claim of deduction u/s 54F of the Act. The appellant has not placed on record any material which may even suggest that in the original assessment proceedings, the matter was enquired and looked into by the AO. Even in the original assessment order, there is no murmur about the justification of deduction claimed by the appellant u/s 54F of the Act. In view of these facts, it is, therefore, held that the AO has not formed any opinion about the claim of the appellant u/s 54F of the act in the original assessment proceedings and thus no question of change of opinion as alleged by the appellant. (ii) It was the contention of the appellant that its case was respond after 4 years of the assessment year under consideration, therefore, in view of the proviso to section 147 of the Act, the instant case under consideration could be respond by reason of failure on the part of the assessee to disclose truly and fully all material facts necessary for its assessment. it was submitted that it has disclosed all material facts truly and fully which were required for its assessment and in the reasons t....
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.... 5. It was further submitted that the reopening was initiated after four years of the end of the relevant assessment year and the original assessment was completed u/s 143(3) of the IT Act, 1961. Thus the case of the appellant clearly falls under the first proviso of sec 147 of the Act, which provides that, no re-opening could be made in such cases unless, any income chargeable to tax has escaped assessment for such assessment year by reason of failure on the part of the assessee to make a return u/s 139 or in response to a notice u/s 142(1) or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. 6. It was further submitted that, "reason to believe" is different from "reason to suspect" or from "to have an opinion". It has been held consistently, that reason to believe can be said to exist only when the Assessing Officer comes into possession or "discovers" "some material", or "gets a new insight subsequent to the conclusion of the original proceedings. Some "information"/event after the original assessment would normally be required to form a belief that the income chargeable to tax has escaped assessment. Such ....
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.... * Hindustan Petroleum Corporation Limited Vs. Deputy Commissioner of Income Tax, (2010) 328 ITR 534 (Bom) * Jai Hotels Co. Limited Vs. Asst. DIT, (2009) 24 DTR 37 (Del): * Commissioner of Income Tax Vs. Eicher Limited, (2007) 294 ITR 310 (Del) * CIT vs. Usha International Limited [2012] 25 taxmann.com 200 (Delhi) 9. The ld DR is heard who has vehemently argued the matter and relied on the order of the lower authorities. 10. In order to appreciate the contentions of the ld AR, we refer to the notice issued by the AO seeking information from the assessee vide its letter dated 19.04.2010 in the course of original assessment proceedings u/s 143(3) of the Act. In the said notice, the AO raised following specific questions to the to the assessee relating to long term capital gains: "4. Details of income from other sources declared at Rs. 125,184. 5. Details in respect of short term capital gain declared at Rs (-) 21,42,498 along with D-mat account along with copy of your account in the books of your broker. 6. The details of long term capital gain declared at Rs. 33,83,145. 10. Details in respect of minor child decla....
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....sale consideration Nikunj Agarwal has invested/purchased house No. 49, Vidhyut Nagar-C, Vaishali Nagar, Jaipur for Rs. 45 Lacs. Copy of agreement and details of payments are enclosed herewith. 10. Miss Adita Agarwal has purchased REC Bond for Rs. 50 Lacs and also invested Rs. 25 Lacs for purchase of house from Ace India Abodes Ltd. Ajmer Road, Jaipur. Copy of related eviddnces for above investment are enclosed herewith." 13. On perusal of the above reply dated 3.9.2010 of the assessee which is in response to specific queries raised by the AO, it is noted that at point 10, the assessee has stated clearly that Miss Adita Agarwal has invested Rs. 25 Lacs for purchase of house from Ace India Abodes Ltd. Ajmer Road, Jaipur and copy of related evidence for above investment was also submitted before the AO. This is the same transaction in respect of which the deduction under section 54F has been claimed while working out the capital gains. It is thus clear that relevant information and related evidence in support thereof was submitted and taken on record by the AO during the course of original assessment proceedings. Given the fact that the same was submitted in response to the spec....