2018 (1) TMI 510

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....assed by the Assessing Officer u/s 143(3)/147of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'), dated 27.01.2014. 2. The grounds of appeal raised by the Revenue reads as follows: "On the facts and in the circumstances of the case and in law, the ld. CIT(A)-9, Kolkata has erred in deciding the reopening u/s. 147 of the Income-tax Act, 1961 is not valid." 3.The brief facts qua the issue are that the assessee A.O.P. filed its Return of Income on 24-03-2010 declaring total income of Rs. 4,92,59,104/-.It was noted from the perusal of Income-tax Return that the assessee had shown Long Term Capital Gain of Rs. 4,92,59,104/- on sale of Land & Building. The sale consideration was shown at Rs. 15,06,00,000/- and cost o....

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....e of acquisition was mentioned. Thus, it appeared that the assessee had deliberately avoided furnishing valuation as on 01.04.1981, which is a general prerequisite for calculation of Long Term Capital Gain (LTCG). It was noticed from the relevant assessment record for A.Y. 2009-10 of Tung King Liu that four of the seven members of the assessee AOP partners of M/s. A. Kong Tannery and owned land and building as fixed assets with a factory shed thereof measuring about 14.5 Cottahs, an adjacent property which was sold on the same date i.e. 23.07.2008 and to the same purchaser. During the assessment of Mr. Tung King Liu, the then D.C.I.T., Circle-33, Kolkata had referred the matter for valuation to the Valuation Cell, which resulted in reduc....

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....04] was added to the total income of the assessee. 4. Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the ld. CIT(A) who has deleted the addition made by AO.Theld CIT(A) noted that there was no income tax proceedings pending on the date of reference made to the DVO. The assessment was reopened on the basis of DVO's report in the case of Mr. Tung Kind Liu and not in the case of the assessee. Therefore, ld CIT(A), following the judgment of Hon'ble Gujarat High Court, in the case of CIT vs. Umiya Co-op. Housing Society Ltd. Reported in 314 ITR 272 (Guj), wherein it was held that: "When the notice under section 148 has been issued and addition has been made by adopting the value estimated by the ....

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....here was no income tax proceedings pending on the date of reference made to the DVO. The assessment was reopened on the basis of DVO's report in the case of Mr. Tung Kind Liu and not in the case of the assessee. We note that reopening the assessment U/s 147/148 of the Act on the basis of DVO's report in another case was not valid. In assessee's case under consideration, we are of the view that no valid reasons were recorded by the Assessing Officer. If the AO failed to record the valid reasons then reassessment would be bad in law. We are of the view that when the notice under section 148 has been issued and addition has been made by adopting the value estimated by the Valuation Officer and when we found that the AO is not empowered to refe....