TaxTMI 
TaxTMI 
2021 (5) TMI 155
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....d herein is agricultural only than a capital asset u/s.2(14) of the Act. 3. We have given our thoughtful consideration to rival submissions. We deem it appropriate first of all to deal with certain basic facts. The CIT(A)'s detailed discussion has summarised the relevant backdrop as follows: "5. I have considered the assessment order and grounds of appeal. The only issue involved in the appeal is with regard to AO's action in making an addition of Rs. 37,00,000/- (Rs. 69,37,500 - Rs. 32,37,500) towards capital gains as against the amount admitted by the assessee. AO's observations are as under: "2.0, A search and seizure operation was conducted on 28/07/2008 in the case of Sri Venkata Kutamba Rao & others and assessee's residential premise was also covered under the search operation. During the search proceedings, the assessee's undisclosed income was quantified by the Investigation Wing at Rs. 60 Lakhs for A.Y.2007-08, on account of non-filing of Return of Income. The assessee vide his deposition dtd: 12/09/2008 admitted the same (i.e. Rs. 60 Lakhs) as his income and accordingly filed the Return of Income on 05/03/2010 in response....
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.....No. CIT(C)/1-1/Decentral/2014-15 dated 16/06/2014 and corrigendurm passed in F.No. CIT(C)/HYD/Corrigendum/2014-15 dated 29/10/2014. 4.5. Since the assessee did not file the return of income in response to notice u/s.148 of the Act, a show cause notice was issued to the assessee on 30/12/2014 in which it was proposed to apply the provisions of S. 50C of the Act, thereby deeming the value of Rs. 1,38,75,000/- adopted for the purpose of stamp duty as the full value consideration received by the assessee. In this connection the assessee was asked to furnish his objection if any on or before 06/01/2015. 4.6. In response to the above mentioned show cause notice, the assessee vide letter dtd:06/01/2015 requested for the adjiournment or the case to tic wecit. The assessee's request was considered and the case was adjourned to 12/01/2015 Subsequently, the assessee vide letter dtd: 23/01/2015 submitted that in response to notice u/s. 148 of the Act, the assessee had filed a return of income on 23/01/2015 and enclosed a copy of the same. In the return of income filed by the assessee on 23/01/2015 (in response to notice u/s. 148 of the Act) the assessee admitted an income of....
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....ssessee furnished a letter dt: Nil from some retired Inspector of Survey, stating that the said property is 5 kilo meters away from Shamshabad area. This letter does not have any evidentiary value for the fact that it has been issued by an unidentified person, it is not addressed to any authority/person in particular, the letter does not contain any date and the survey number of the land. It is seen that the sale deed mentions the land as 'agriculture land', but the assessee could not substantiate that said land is not situated within the jurisdiction of any municipal corporation or cantonment or notified area or within prescribed distance from the local limit of the above mentioned areas. In view of the above, there is no merit in the assessee's contention that the land that was sold by the assessee during F.Y. 2005-07 is an agricultural one, Hence, the provisions of S. 50C of the Act is applicable to the assessee's case. 5.3. Further the assessee has submitted that since the agricultural land that was sold by the assessee was not having a proper approach road and the land was surrounded by the lands of the neighbors from all the sides, the land was sold f....
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....point that the said land is an agricultural land and tax was paid on Long Term Capital Gain by mistake. 5.5. It is pertinent here to mention that the assessee's appeal questioning the validity of the assessment order passed on u/s. 143(3) 153A of the Act, and the addition of Rs. 14,40,000/-, was dismissed by the Commissioner of Income Tax (Appeals)-VII, Hyderabad vide his order in Appeal No.1812/ACIT/CIT(A)-VII/10-11, dtd: 30/05/2011. It should be noted here that even during the appellate proceedings before the CIT(A), the assessee did not dispute the nature of the land (i.e agriculture or not). 5.6. Aggrieved by the above mentioned order of the CIT(A), the assessee filed an appeal before ITAT, Hyderabad. It is pertinent here to mention at the cost of repletion that even before the ITAT, the assessee did not raise the issue that the said land is an agriculture land. The ITAT vide its order in ITA No.1491/Hyd/2011, dtd.29.02.2012 allowed relief to the appeal of the assessee w.r.t. addition of Rs. 14,40,000. From the above, it is evident that neither the issue of capital gain nor the issue of nature of land sold was the subject matter of assessee's before CI....
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....merely by showing that other income which had been assessed or was at too high a figure except in cases under section 152(2). The words "such income" in section 147 clearly refer to the income which is chargeable to tax but has "escaped assessment" and the Income-tax Officer's jurisdiction under the section is confined only to such income which has escaped assessment, it does not extend to reconsidering generally the concluded earlier assessment, Claims which have been disallowed in the original assessment proceeding cannot he permitted to be re-agitated or the assessment being reopened for bringing to tax certain income which had escaped assessment because the controversy on reassessment is confined to matters which are relevant only in respect of the income which had not been brought to tax during the course of the original assessment. A matter not agitated in the concluded original assessment proceedings also cannot be permitted to he agitated in the reassessment proceedings unless relatable to the item sought to be taxed as "escaped income". Indeed, in the reassessment proceedings for bringing to tax items which had escaped assessment, it would be open to an assessee to put for....
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....in connection with Sri. Venkata Kutumba Rao & others. At the time of search the return for this assessment was not filed and admitted that Rs. 60 lakhs would be the taxable income in his deposition dt.12-09-2008. In response to notice u/s 153A your appellant submitted return of income for AY 2007-08 on 5-3-2010, admitting net income of Rs. 45,60,602/- and agricultural income. The assessment u/s 143(3) rws 153A of IT Act was completed on 27.12.2010. In the said order, the Assessing Officer added an amount of Rs. 14,40,000/- being the difference between the income returned and Rs. 60 lakhs vide his deposition dated 12-09-2008. This was carried on appeal to CIT(A), who confirmed the addition and later the Hon'ble ITAT vide Order dated 29-02-2013 in ITA NO 347/Hyd/2011 deleted the entire addition of Rs. 14,40,000/-. The returned income of Rs. 45,60,602/- included the following: Income from Amount Rs. Salary 12,86,400 House Property 10,92,938 Capital Gains 21,59,554 Other sources 21,710 Gross Total Income 45,60,602 Agricultural Income Your Appellant submits that the long terms capital gains offered to tax pertains to....
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....ct that the land was agricultural land and provisions of section 50C do not apply, as agricultural lands are not Capital assets, as defined in the Act. The Assessing Officer is wrong in not referring the property to the Department Valuation Officer, as per provisions of section 50C. The Assessing Officer ignored the fact that as per section 50C(2), the Assessee has the right to request for reference to DVO only if there are no pending cases, the provision reads as under; (2) Without prejudice to the provisions of sub-section (1), where - (a) the assessee claims before any Assessing Officer that the value adopted or assessed by the stamp valuation authority under subsection( 1) exceeds the fair market value of the property as on the date of transfer; (b) the value so adopted or assessed by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of s....
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....acts that the AO has determined long term capital gains at Rs. 37,00,000 being 50% share of the value adopted for the purpose of stamp duty in excess of full value consideration adopted by the assessee while computing the long term capital gain on the sale of his share of property of land admeasuring Ac 4.14 Gts (which the assessee jointly owned with his son G.Shiva Shankar Reddy) situated at Survey No.124/1, Sbamshabad Village Grampanchayat, Shamshabad Mandal, Rangareddy Dist. Vide sale deed no 15085/2006. While doing so, the AO stated as under: "5.2. Further, the assessee furnished a letter dt: Nil from some retired Inspector of survey, stating that the said property is 5 kilo meters away from Shamshabad area, This letter does not have any evidentiary value for the fact that it has been issued by an unidentified person, it, is not addressed to any authority/person in particular, the letter does not contain any date and the survey number of the land. It is seen that the sale deed mentions the land as 'agriculture land', but the assessee could not substantiate that said land is not situated within the jurisdiction of any municipal corporation or cantonment or notif....
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....;s contention that the said land is agricultural, is not acceptable as it is not supported by corroborative evidence. Hence, the addition of Rs. 37,00,000/- is hereby confirmed. As a result, the grounds raised are dismissed". 4. The Revenue's case in light of the CIT(A)'s foregoing detailed discussion is that since the assessee had failed to adopt SRO price for the purpose of computing capital gains, the same formed sufficient tangible material for the Assessing Officer to treat it as an instance of his taxable income having escaped assessment thereby triggering Section 148 mechanism in motion. 5. Learned departmental representative next contended that the assessee's latter arguments on merits about the land in question as not a capital asset also deserves to be declined since he had himself treated it to the contrary in original return and a computation forming subject matter of Section 153A assessment. 6. Heard rival arguments on the twin issues of validity of Section 148/147 re-opening as well as correctness of the impugned re-opening as well as on merits. We find no merit in assessee's first and foremost grievance qua legality of the impugned re-opening since the diffe....