TaxTMI 
TaxTMI 
2022 (2) TMI 817
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....the assessment of the case u/s 147 of the IT Act after recording the following reasons:- "Inputs received from the system revealed that assessee has purchased property amounting to Rs. 3150000/- and the same is not verifiable from of the return of income filed for the assessment year 2006-07 relevant to financial year 2005-06. In view of above, it is clear that the assessee has not disclosed fully and truly all materials facts by not furnishing in the return of income and the omission lies on the part of the assessee. Since an information in the possession of the Income-tax Officer that an transaction of investment in property of Rs. 3150000/- had been undertaken therefore I have reasons to believe that an amount of Rs. 3150000/- has escaped assessment within the meaning of section 147 of the Income tax act, 1961. The time limit to reopen case is exceeding four years. Therefore, the proposal is being sent to JCIT Range-30, New Delhi for approval u/s 150(2) of the IT act 1961 to issue notice u/s l48 of the I.T. Act in.....of section 151(2) of the IT Act, 1961." 4. During the course of assessment proceedings, the AO noted that the assessee has purchased a property No, A-43 Park En....
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....ing partial relief to the extent of as calculated by adopting the land valuation as per Circle rate and thereafter, by further allowing a deduction of 29.5% out of the value so arrived at for the defects in the location etc. of the property (which total relief will calculate Rs. 57,05,864/-). 2. That without prejudice, no addition can be made only on the basis of DVO's report in the absence of any supporting or corroborative material justifying the action of addition. 3. That without prejudice, under the facts and circumstances, initiation of proceedings U/s. 147 / 148 and consequential Asstt. is illegal, mechanical, without application of mind and un-warranted, which is also based on factually incorrect information. 4. That without prejudice, under the facts and circumstances, approval U/s. 151 is mechanical and without application of mind, hence, cannot provide a valid jurisdiction for the proceedings u/s. 147 /148. 5. That without prejudice, under the facts and circumstances, the reference to the valuation cell is illegal and un-warranted, moreso, being made without rejection of books of accounts and also, since, made without recording satisfaction of alleged under decla....
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....sessment, he submitted that the case was reopened on the ground that the assessee has purchased the property for Rs. 31,50,000/- and has not disclosed material facts by not furnishing the return of income and, hence, Rs. 31,50,000/- has escaped assessment. Referring to the copy of the assessement order, he submitted that the AO himself in the assessment order has written that the assessee has filed the original return of income on 31.10.2006 declaring an income of Rs. 10,87,058/-. Even in the approval taken u/s 151 of the Act, a perusal of the same shows as under:- "Whether any voluntary return had already been filed : No If so, the date of filing the said return : N.A" 10. Therefore, the reasons recorded by the AO for reopening of the assessment and the approval given by the higher authorities show that there is complete nonapplication of mind. 11. The ld. Counsel, referring to the decision of the Hon'ble Delhi High Court in the case of PCIT vs. RMG Polyvinyal (I) Ltd., reported in 396 ITR 5 (Del) submitted that the Hon'ble Court has held that the information received from the Investigation Wing was not tangible material per se without a further enquiry having been und....
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.... (i) German Remedies Ltd. vs. DCIT (2006) 287 ITR 494 (Bom); (ii) Smt. Kalpana Shantilal Hariya vs. ACIT, WP No.3063/2017 (Bom HC); and (iii) VRC Township Pvt. Ltd. vs. ITO, ITA No.1503/Del/2017, dated 14.10.2020. 14. So far as the merit of the case is concerned, the ld. Counsel submitted that the assessee purchased the house property No.43, Park End, Vikas Marg, Delhi for Rs. 31,50,000/- through registered sale deed. The AO, on the basis of DVO report estimated the purchase cost at Rs. 1,02,67,600/- by adopting land value at Rs. 50,214/- per Sq. Mtr. The CIT(A), directed to adopt land circle rate of Rs. 21,800/- per Sq. Mtr. and thereafter further allowed a deduction therefrom @29.5% for various reasons on account of property location. He submitted that after the above relief, as per appeal effect order dtd.20.03.2018, the relief stood calculated at Rs. 30,25,992/- and the addition sustained was Rs. 40,81,608/-. He submitted that the appeal of the Revenue was dismissed on account of low tax effect, therefore, the only question that arises is the addition of Rs. 40,81,608/- sustained by the CIT(A). The ld. Counsel submitted that the assessee has been maintaining proper books o....
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....assessee. We have also considered the various decisions relied by ld. Counsel for the assessee. We find, the assessee, in the instant case, had filed the original return of income on 31.10.2006 declaring the total income at Rs. 10,87,058/- which was processed accordingly. We find, the AO reopened the assessment on the ground that the assessee has purchased residential property amounting to Rs. 31,50,000/- and the same is not verifiable from the return of income filed for the AY 2006-07 and the assessee has not furnished the return of income. The reasons of such reopening has already been reproduced in the preceding paragraph. From the above, it is clear that the reopening was made on the ground that the assessee has not filed the return of income and, therefore, the income to the extent of Rs. 31,50,000/- has escaped assessment. Since the assessee has already filed the return of income, a fact brought on record by the AO himself in the body of the assessment order itself, therefore, the very reason for which the case of the assessee was reopened is factually incorrect. 20. It has been held in various decisions that when the AO reopened the case of the assessee on the premise that ....