TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 159
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.... agreement with a GPA holder, Sri Badruddin Hussain Salmani for a consideration of Rs. 1,63,25,000/- which is to be adjusted with the loan amount owned by the GPA holder to the assessee. The GPA holder paid a sum of Rs. 88,00,000/- and the remaining Rs. 75,25,000/- shall be adjusted with development and repairs of the building which is to be made by the vendor. The assessee vendee deducted TDS of Rs. 88,000/- u/sec.1941A taking into consideration of amount received by the assessee i.e. Rs. 88,00,000/- as the net consideration. The Assessing Officer during the course of re-assessment proceedings noted that, the consideration for the purpose of TDS u/sec.194(1A) shall be on the total amount of Rs. 1,63,25,000/- and not Rs. 88,00,000/- and that, the TDS shall be deducted @ 1% on Rs. 1,63,25,000/- which worked out to Rs. 1,63,250/-. Therefore, the Assessing Officer noted that, the differential amount Rs. 75,250/- (Rs.1,63,250/- - Rs. 88,000/-) needs to be brought to tax. 2.1. The Assessing Officer noted that, the assessee has sold a land vide sale deed No.8230 dated 27.7.2015 for a consideration of Rs. 2,01,85,000/-. The Assessing Officer observed from the sale deeds produced by the....
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....the above it is evident that the amount of Rs. 1,63,25,000/- invested was not out of the capital gain from the sale of the land vide sale deed No.8230 dated 27.7.2015. Therefore the amount of Rs. 1,63,25,000/-has not been offered to tax and hence added back to the income of the assessee." 2.2. The Assessing Officer accordingly made addition under the head "Long Term Capital Gains" amounting to Rs. 1,63,25,000/- and assessed the total income of the assessee at Rs. 2,12,98,340/- as against the returned income u/sec.143(3) order dated 18.12.2018 vide order dated 30.03.2022 passed u/sec.147 r.w.s.144 r.w.s.144B of the Income Tax Act, 1961. 3. Aggrieved by the re-assessment order, the assessee preferred appeal before the learned CIT(A). Before the learned CIT(A), it was the submission of the assessee that, the assessment in the case of the assessee has already been completed by the Assessing Officer u/sec.143(3) of the Act by accepting the return of income declared by the assessee amounting to Rs. 49,83,339/- filed u/sec.139(1) of the Act dated 05.08.2016. He submitted that, the Assessing Officer has reopened the assessment on mere change of opinion without providing any new facts....
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....cer has also proposed addition of Rs. 75,250 towards TDS less paid by the assessee which is not correct as the assessee has paid the total TDS amount of Rs. 1,63,250 at 1 percent on Rs. 1,63,25,000/- towards sale consideration and also filed Form 26QB by the assessee which is also not looked into by the Assessing Officer nor has he verified the traces and proposed to add the differential amount of Rs. 75,250/- which needs to be corrected and rectified. The assessee further submitted that, reopening of the case of the assessee is not valid as the same is due to change of opinion. He, therefore, pleaded that the re-assessment order of the Assessing Officer should be set aside. 4. The learned CIT(A) after considering the submissions of the assessee observed that, "the appellant has not fulfilled requirement for claiming exemption from capital gains as per section 54F(1) r.w.s 54(4) which clearly mandate that the amount of net consideration towards the purchase or construction of new asset which is not appropriated or not utilized has to be deposited by him in accordance with the scheme. The appellant has deposited only Rs. 38,60,100/- in the capital gain scheme which has rightly be....
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.... capital gain derived by him from the sale of the land. The GPA holder of the house property, Sri Badruddin Hussain Salmani, owned a loan amount of Rs. 1,63,25,000/- to the appellant, which he could not repay. Hence, the appellant had taken the house property into his possession through the sale deed dated, in lieu of the loan given by him. Hence, it was held by the AO that the capital gain derived from the sale of the land was not utilized in full for the purpose of purchase or construction of a residential property. Out of the capital gain of Rs. 2,00,35,049/-, the appellant had deposited a sum of Rs. 38,60,100/- in a capital gain scheme. The AO has further stated that the remaining unutilized/un-appropriated amount of Rs. 1,63,25,000/- was not brought to tax u/s 45 as long-term capital gains. Accordingly, Proceedings u/s 147 of the Act were initiated by issuance of notice u/s 148 dated 30.03.2021 by the AO, and after considering the reply filed by the appellant, an addition of Rs. 1,63,25,000/- was made to the total income as LTCG for AY 2016-17. 7.3.1 During the appellate proceedings the appellant submitted that the AO had issued notice u/s 148 to him on 30.03.2021 for....
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....n for the reopening in para 1.1 cited above, wherein it is clearly brought out that it is based on facts and evidence brought on record. Therefore, I do not find force in the argument that was the mere change of opinion. The judgments relied upon by the appellant are clearly distinguishable from the facts of the present case. Therefore, the appeal on this ground is hereby dismissed. 7.4.2. I have considered the facts of the case and submissions made by the appellant and I am of the view that the AO was right in holding that the residential house stated to have been purchased by the assessee was not actually purchased out of the capital gains derived by him from the sale of the land. The GPA holder of the house property, Sri Badruddin Hussain Salmani owned a loan amount of Rs. 1,63.25,000/- to the appellant, which he could not repay. Hence, the assessee has taken the house property into his possession through the sale deed, in lieu of the loan given by him. Hence, it was observed that the capital gain derived from the sale of the land was not utilized in full for the purpose of purchase or construction of a residential property as envisaged in section 54F. Out of the capita....
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....rupees shall not be taken into account for the purposes of this sub-section.] Explanation. For the purposes of this section, - "net consideration", in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. (2) Where the assessee purchases, within the period of two years after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house. the income from which is chargeable under the head "Income from house property", other than the new asset, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a), or, as the case may be, clause (b), of sub-section (1), shall be deemed to be income chargeable under the head "Capital gains relating to long-term capital assets of the previous year in which such residential house is purchased or constructed. (3) Where the new asset is ....
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....e cost of the new asset, shall be charged under section 45 as income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw the unutilized amount in accordance with the scheme aforesaid [Provided further that the net consideration in excess of ten crore rupees shall not be taken into account for the purpose of this sub-section]. 7.4.4 It is very clear from the fact of the case that the appellant has not fulfilled requirement for claiming exemption from capital gains as per section 54F(1) r.w.s 54(4) which clearly mandate that the amount of net consideration towards the purchase or construction of new asset which is not appropriated or not utilized has to be deposited by him in accordance with the scheme. The appellant has deposited only Rs. 38,60,100/- in the capital gain scheme which has rightly been allowed by the AO. The balance amount has not been either appropriated or utilized for the construction or the purchase of the new asset. Therefore, the AO has rightly brought the amount to tax as capital gains. The judgment relied upon ....
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....w. 7. The learned Senior AR for the revenue, on the other hand, supporting the orders of Ld. CIT(A) submitted that the Assessing Officer has reopened the assessment on the basis of reasons recorded which suggests escapement of income, under assessment of LTCG which is evident from the details, reasons recorded by the Assessing Officer for issuance of notice u/s. 148 of the Act. Further, although the assessment was taken up for scrutiny to verify the issue of LTCG but the Assessing Officer has completed the assessment without verifying the facts. Therefore, this is not a case of change of opinion or as argued by the learned counsel for the assessee to form of belief of escapement of income which the Assessing Officer has passed order on fresh tangible material in his possession. Therefore, he submitted that the reopening of assessment by the Assessing Officer in the present case is on sound footing and based on fresh material and accordingly the argument of the learned counsel for the assessee on reopening of assessment is bad in law, is devoid of merits and should be rejected. 8. We have heard the rival contentions, considered the material on record and also gone through the ....
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....ssessment on the basis of very same material which were available in the assessment records while completing the assessment u/s. 143(3) of the Act. Further, if we go through the relevant record including computation of total income, it is very clear that the assessee has disclosed the relevant facts with regard to sale of property and consideration received for sale of property in the statement of total income indicating the amount of LTCG and deduction claimed u/s. 54F of the Act. Therefore, we are of the considered opinion that from our above observations, it is undisputedly clear that the Assessing Officer has reopened the assessment on ' mere change ' of opinion without there being fresh tangible material which came to the possession of the Assessing Officer subsequent to completion of original assessment u/s. 143(3) of the Act. In the absence of any fresh tangible material, reopening, amounts to 'change of opinion' which is not permissible under the law. In our considered opinion, the Assessing Officer does not have any power to review his own assessment. Further, if during the original assessment, the assessee has provided all the relevant information which was considered by ....