2018 (5) TMI 1089

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....nds of his mother in the re-assessment proceedings. 2. Briefly stated facts are that assessee is an NRI and is having some properties in India which are looked after by his father, Shri T.N. Reddy, who is the GPA holder of assessee. During the accounting year 2006-07 relevant to the AY. 2007-08, assessee sold some of the properties and arrived at short term capital loss. The return of income was originally filed on 04-12-2007 and this was subject matter of scrutiny. During the scrutiny proceedings, AO invoked the provisions of Section 50C of the Act and made an addition of Rs. 23,75,500/- being the difference between the sale consideration shown by assessee and the sale consideration as per SRO Values vide order dt. 22-12-2009. On a furt....

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....assessment order mentions about the issuance of notice dt. 30-03-2012. The reasons for reopening were not placed on record, but it seems the major reason for reopening is about considering the sale proceeds in the hands of Smt. T. Sarala, mother of assessee because she was shown to have gifted the amount of Rs. 11 Lakhs to assessee. 4. In the re-assessment proceedings, AO calculated the capital gains assessable in the hands of Smt. Sarala at Rs. 3,90,479/- and this amount was brought to tax in assessee's hands. In addition to the above, AO also brought to tax an amount of Rs. 3,92,869/- on the sale of assessee's property by recalculating value of the property as per the valuation report and cost of the property separately worked out by h....

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....ine value, the AO before adopting the SRO's guidelines value for the purpose of section 48, is mandated to refer the said capital asset to a Valuation Officer for arriving at the correct FMV of the property. In this given case, the AO has not considered the objections of the appellant such as pending suits on mortgages and tenancies, purchase of the property at lesser than the then SRO guideline value and of course, the Vaastu defects. It is the case of the appellant that the properties were purchased knowning fully well of the legal problems and disputes arising from mortgages and tenancies and the appellant is also under disadvantage by being an NRI and his father being an aged person. With all theses back grounds, appellant pleaded that ....

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....e explanations of the appellant for selling the property at value lesser than SRO and the sale value can be accepted as fair market value for the purpose of S.48. Accordingly, the addition is directed to be deleted". 7.1. Thus, AO was prevented in re-valuing the sale consideration as the matter was already crystalised and has become final. Not only that AO also went beyond his jurisdiction to re-workout the cost of acquisition also which was not even disputed in the original order by the AO or by the assessee. Consequently, the addition of Rs. 3,92,869/- is not correct and should have been deleted by the Ld.CIT(A). We order it to be deleted. Assessee's ground on this issue stands allowed. 7.2. Coming to the addition of so called capit....