TaxTMI 
TaxTMI 
2022 (12) TMI 187
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....ed assessment within the meaning of section 147 of the Income Tax Act, 1961 (hereinafter referred to as the "Act"). 2.2 Also prayed is to set aside the order dated 08.12.2021 whereby the respondent rejected the objections of the petitioner against reopening of the assessment. 3. Stating the attendant facts, the petitioner is an individual who is stated to be deriving income from the property and other sources. He filed his return of income for the assessment year 2015-16 on 31.12.2015 declaring the total income of Rs. 23,71,220/-. The return was processed under section 143(1) of the Act. 3.1 Notice under Section 148 of the Act came to be issued to the petitioner on 31.03.2021 whereby the assessing officer proposed to reassess the income. In response to the said notice, the petitioner filed return of income on 27.05.2021 declaring total income as above. The reasons for reopening the assessment were furnished to the petitioner on 14.07.2021. The petitioner filed his objections on 15.06.2021, which were uploaded on 30.09.2021. On 08.12.2021, the petitioner received notice under section 142(1) of the Act wherein the rejection of the objections came to be incorporated. 3.2 T....
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....ion received. The case component of the property transaction is unreported and needs to be brought to tax. 3.5.1 The Assessing Officer recorded, "it is evident that the assessee has sold immovable property and received a total cash component of Rs.87,70,876/- by the Gokulesh Infra, the same is liable to be brought to tax. ... On perusal of return filed by the assessee, it is seen that the assessee has not disclosed the same in his return. Therefore, it is aptly clear that the assessee has not disclosed the entire transaction in his Return of income filed for the A.Y. 2015-16 and has also not offered the same for taxation." 3.5.2 It was further stated that in view of the above facts, the assessing officer had reasons to believe that Rs. 87,70,876/- was the escapement of income within the meaning of Section 147 of the Act and that there was failure on the part of the assessee to disclose all material facts fully and truly, which made the case fit to issue notice under section 148 of the Act. 3.6 In the objections filed by the petitioner, it was submitted that no capital gain had escaped tax, and that the information that Rs. 43,54,876/- was received in cash was erro....
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....nt in para 5 of the reasons recorded. 4.1.1 Learned advocate for the petitioner in support of his submission relied on the decision of this Court in Varshaben S. Patel vs. ITO [281 ITR 75) (Guj)] to submit that no material was produced on the basis of which it could be concluded that the property transaction was unreported and was not brought to tax, which may justify the invocation of section 147 of the Act. Next relied on was the decision of the Bombay High Court in Gateway Leasing P. Ltd. Vs. Assistant Commissioner of Income Tax [(2020 117 Taxmann.com 442 (Bom)] to submit that the respondent officer could not have acted on the borrowed belief of the other investigation wings without verifying the facts on record. The decision of the Delhi High Court in Pr. CIT v. Meenakshi Overseas (P) Ltd[(2017) 395 ITR 677 (Delhi] was pressed into service to submit that crucial link between the information made available to the assessing officer and the formation of objective belief was missing in the case. 4.2 On the other hand, learned advocate for the respondent relied on the contents of and contentions canvassed in the affidavit-in-reply. Re-asserting the facts involved, it was state....
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....ion was in cash, which was not disclosed in books of account, the assessee failed to rebut evidence such as cash vouchers, summary of sale deed, etc. and in such facts and circumstances, the Court held that the case for reopening for the assessment was clearly made out. 4.2.4 Yet another decision of the Delhi High Court in Jatinder Pal Singh v. Deputy Commissioner of Income Tax, Central Circle-9 [(2021) 128 Taxmann. 414 (Delhi) was referred to in which the assessing officer was held to be justified in making addition under Section 69A in respect to cash which was received by the assessee, which as per his case, was advanced for sale of agricultural land from the buyer through the broker. The said aspect was revealed in course of search of the premises of the assessee. 5. Having considered the facts involved and the contentions canvassed, it has to be observed that in response to the notice dated 06.08.2018, issued by the assessing officer under section 142(1) of the Act for Assessment Year 2016-17, the petitioner assessee submitted its response dated 09.08.2018, copy of which was produced by the learned advocate for the petitioner in the course of hearing, which was tak....
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....ow that the alleged escapement of income in cash component of the transaction in relation to development agreement was in the assessment year 2015-16. Now the income under the head "capital gains is liable to be computed in accordance with the provisions of section 45(7) of the Act. Section 45 of the Act mentions about "Capital Gain" that any profits or gains arising from the transfer of a capital asset effected in the previous year shall, save as otherwise provided in ......, be chargeable to income-tax under the head "Capital gains", and shall be deemed to be the income of the previous year in which the transfer took place. 5.4 Reverting to the basic facts in this case, though the allegation is that the cash payment was made and it escaped the tax, it was pursuant to a development agreement. Furthermore, there is no tangible material on record to even prima facie show that assessee has received cash from M/s. Gokulesh Infra for sale of the property at Revenue Survey No. 28, 29, 31, 32, Gokulesh City Project, Dabhoi Road, Baroda. The sale deed was executed during the financial year 2015-16, which was relevant to assessment year 2016-17. The transfer could not be said to have ta....
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....i (supra) also highlighted the principle that income tax cannot be levied on a hypothetical income. 5.6 In the present case, it happened in the subsequent income year and the capital gain thereof was offered to tax in the corresponding assessment year. The basic conception is that there must have been an acquired right to receive income to make it chargeable to tax. It may be that income may accrue to an assessee without actual receipt of the same and if the assessee has acquired right to receive the income, it can be said to have been accrued to him. On the other hand, in order to attract liability to tax, there must be accrual of income in law. 5.7 The decision in CIT vs. Shoorji Vallabhdas and Co. [(1962 46 ITR 144 (SC)] was referred to by the Supreme Court in Balbir Singh Maini (supra) to observe, "Income tax is a levy on income. No doubt, the Income Tax Act takes into account two points of time at which the liability to tax is attracted, viz., the accrual of the income or its receipt; but the substance of the matter is the income. If income does not result at all, there cannot be a tax, even though in bookkeeping, an entry is made about a 'hypothetical income', ....