AI Drafter 
TaxTMI 
TaxTMI 
2022 (2) TMI 817
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....sed accordingly. Subsequently, the AO reopened 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 tha....
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....CIT (A) further erred in not deleting the whole addition but in giving 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 o....
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....n a mechanical manner and on borrowed satisfaction and without application of independent mind by the AO. Referring to the reasons recorded by the AO for reopening of the assessment, 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 I....
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....itiation of reassessment proceedings and approval given being not in accordance with the law, such reassessment proceedings should be quashed. For the above proposition, he relied on the following decisions:- (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....
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....he report of the Government Approved Valuer filed by the assessee should be accepted and no addition is called for. 18. The ld. DR, on the other hand, heavily relied on the order of the CIT(A). 19. We have heard the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the 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 a....