TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 305
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.... on wrong facts that the transaction of sale of share was not disclosed in ROI but in fact the appellant had very well shown long term capital gain on sale of shares and claimed the same to be exempt u/s.10(38) of IT Act. iii. That in reasons no tangible material is narrated or described so as to form valid believe u/s.148 of IT Act. iv. That mere DIT information is mentioned in reasons recorded which is nowhere corroborated by any independent material. 2. That on the fact and circumstances of case of Appellant the order passed u/s.143(3) r.w.s. 147 r.w.s. 144B of IT Act is bad in law as the ld. A.O Failed to follow the procedure for assessment u/s.148 as laid down by Supreme Court in case of GKN Driveshafts (India) Ltd and also the procedure laid down u/s.144B of IT Act. 3. That the Ld. CIT(A), NFAC erred in confirming addition of Rs. 9,27,878/- made by A.O by invoking the provision of section 68 of IT Act on account of long term capital gain claimed as exempt by Appellant u/s.10(38). The addition made by A.O and sustained by CIT(A), NFAC is arbitrary, baseless and not justified. 4. That the Ld. CIT(A), NFAC erred in confirming addition....
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.... submitted by the Ld. Counsel that if the legal ground is adjudicated and answered in favour of the assessee then all other grounds on merits/any other legal ground, if any becomes academic in nature. In the said legal ground, it is contended by the Ld. Counsel that the A.O has not arrived at any satisfaction forming the "reasons to believe" for invoking the reassessment proceedings u/s.147/148 of the Act. The entire reasons recorded are based on wrong facts. 5. The Ld. Counsel in this regard appraised the bench that in the reasons recorded by the A.O it is invalid and without satisfaction to invoke proceedings u/s. 147/148 of the Act. The reasons recorded by the A.O has been annexed at Page 19 & 20 of the paper book. For the sake of clarity, the same are extracted as follows: Reason for issuing notice under section 148 of the I T Act, 1961 1. Brief details of the Assessee : The assessee is an individual. The assessee derives income from business, house property and other sources. Return of Income is filed by the assessee on 21.03.2015 thereby declaring income at Rs. 2,67,310/-. 2. Reasons for reopening the case of the Assessee: On ve....
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....ns to believe" are well founded for reassessment proceedings since there is escapement of income. 7. The Ld. Counsel for the assessee countering the afore-stated contention submitted that the return of income does not have any provision to directly reflect the amount which has been received by the assessee i.e. 9,27,878/-. The provision of exempt income only has to be reflected and therefore, the amount that has been received from M/s.Tilak Venture Ltd. Rs. 9,27,878/- has to be deducted from the cost of acquisition of Rs. 37,350/- and the outcome is Rs. 8,90,528/- [Rs. 9,27,878/-(-) Rs. 37,350/-]. This aspect has already been disclosed in the return of income within the column of "exempt income". These facts could not be refuted by the Ld. Sr. DR. 8. I have carefully considered the submission of the parties herein, analyzed the facts and circumstances in this case. The legal ground that has been raised by the Ld. Counsel for the assessee that the A.O while invoking the provisions of Section 147/148 of the Act has not arrived at requisite satisfaction. Rather, there was no satisfaction at all in his mind and applicability so to form the "reasons to believe" that any income or ....
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.... the assessee. Further, the Ld. Sr. DR has also agreed that there is no provision in the return of income for showing the total income of receipts by the assessee. Rather, the total receipts have to be deducted from the cost of acquisition and the net amount has to be disclosed in the "exempt income" column which the assessee in this case has complied with. Therefore, the very basis for "reasons to believe" recorded by the A.O becomes irrelevant, incorrect and arbitrary. Accordingly, I hold that the "reasons to believe" recorded by the A.O for reassessment proceedings are void-ab-initio. Resultantly, all the subsequent proceedings becomes non-est in the eyes of law. In other words, since the "reasons to believe" has been held void ab initio, therefore, the reassessment order passed by the A.O u/s.147/148 of the Act does not have any legal sanctity to survive, hence, it is quashed. Therefore, the subsequent order passed by the Ld. CIT(Appeals)/NFAC becomes non-est as per law. 11. That even without going into the merits of the case, this legal ground is answered in favour of the assessee and against the revenue. Accordingly, all other grounds on merits as well as other legal groun....