TaxTMI 
TaxTMI 
2016 (1) TMI 1464
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....efly the facts of the case are, assessee an individual deriving income from house property, business, capital gains and other sources had filed his return of income for the AY 2008-09 on 30/09/2008 admitting taxable income at Rs. 1,02,87,343/- and an order u/s 143(3) was passed on 24/12/2010 accepting income returned by the assessee. 3.1 Subsequently, the AO noticed that the income chargeable to tax had escaped assessment and, therefore, a notice u/s 148 was issued. Thereafter, a notice u/s 143(2) was issued and after hearings with the assessee, the assessment was completed by AO u/s 143(3) rws 147 of the Income-tax Act, 1961 (in short 'Act') by making an addition of Rs. 91,01,026 and Rs. 33,038/- on account of income from Long term capita....
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....the assessment order, submission of the assessee and the material on record. It is seen that the assessee has shown the capital gains on transfer of asset in return of income. The same was scrutinized after placing all the details regarding the transaction on record, it was accepted. Based On the same material assessment was re- opened after recording the reasons. There is no fresh material before AO except the details filed during the proceedings u/s. 143(3). Relying On the ratio laid down in the case of CIT Vs Kelvinator India Ltd. (320 ITR 561), the reopening, held bad in law. Further, to assess the gains arising on transfer of asset as business income as against the capital gain would only amount to change of opinion, which also ca....
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....mere passive investment activity. b. Having ventured to construct flats with his own financial strength, assessee admits that he could not execute the project on his Own. This proves that the project undertaken is beyond his means and that this is not a mere investment proposition out of his available funds but an "adventure" c. Assessee had entered into a development agreement with M/s. Noon Homes Pvt. Ltd., which handed over the flats in semi-finished stage only. It was only the super structure that was handed over to assessee. The crucial component of value addition to improve marketability of the flats was undertaken by the assessee himself This activity of assessee carrying on the development work himself shows that the activity ne....
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....facts of the case, the CIT(A) is correct in holding that assessee's activity is not an adventure in the nature of trade." 9. Ld. DR submitted that the assessee had confirmed to AO the intention to obtain municipal permission in 2007 shows the activity that assessee contemplated was adventure in the nature of the trade, but, not as mere passive investment activity. He also submitted that having ventured to construct flats with his own financial strength, assessee admits that he could not execute the project as his own. This proves that the project undertaken was beyond his means and that this was not a mere investment proposition out of his available funds but an 'adventure'. 9.1 Ld. DR also submitted that the assessee had entered into a d....
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....sment proceedings, the order of the CIT(A) may be upheld. 11. Considering the submissions of both the counsels and material facts on record, we are of the view that the AO had completed the original assessment u/s 143(3) of the Act after considering all the materials submitted by the assessee. Later, the AO reopened the assessment u/s 147 relying on the same materials submitted by the assessee. There was no fresh material or any information which gives the impression that the income of the assessee has escaped assessment. The initiation of reassessment proceedings u/s 147 of the Act on the basis of the same material on record and holding there was escapement of income as the income arose from transfer of the asset is to be assessed as 'bus....