TaxTMI 
TaxTMI 
2026 (3) TMI 1497
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....he loss of Rs. 19,094,365/- and making additions to a sum of Rs. 111,253,777/-. 3. Subsequently, the Assessing Officer issued notice under Section 148 of the Act on 30.03.2021. The reasons for reopening the assessment are extracted in the order of ITAT, which reads as follows; "4. The assessment for the assessment year 2014-15 has been reopened u/s 147 of the Act vide notice dated 30th March 2021 for the following reasons (as provided in the notice under section 143(2) read with section 147 of the Act vide reference по.ITBA/AST/F/143(2) 4/2021-22/103273 7796(1) dated 30th April 2021): a. It is noticed that as per Note 24 to annual accounts 2013-14, the assessee on 8.6.2013 converted the land held by it as fixed assets to project in progress. The value of the land as on the date of conversion as Rs. 3401,556,840/-. The notional/profit on conversion of fixed asset to project in progress of 1254,289,672/- has not been recognised in the books of accounts of the Company. It has also been stated that taxability u/s 45(2) would arise only in the year of sale and from Note 5 under Current inabilities, the assessee has received advance from Customer segregat....
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....ture referred to in section 53A of the transfer of property act, 1882; or Transfer of immovable property under agreement to sell. Transfer deemed to be take place on the date on which possession of immovable property is given in pursuance of agreement to sell. Hence capital gains arise in the year in which possession in given to buyer, not the date on which property is registered in the name of buyer. The Joint development agreement entered into by the assessee with the developer is a legal transfer agreement in respect of sale of land proportionate to 60% of the total built up area. As the assessee has relinquished his right over the 60% share, liability to pay tax arises irrespective of incidence of handing over of the built up area by the developer." 5. The Assessing Officer completed the assessment under Section 147 r/w 144B of the Act and made additions to a sum of Rs. 1,254,289,672/- on account of undisclosed capital gains by the assessee in view of the conversion of capital asset into stock in trade. 6. The assessee challenged the assessment order in appeal before the CIT(A). The appeal was mainly questioning the assumption of jurisdiction by the Assessing Officer. The....
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.... the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: .......................... ..........................." 11. In the instant case, when the assessment order was passed on 20.12.2016, notice under Section 148 of the Act reopening the assessment had been passed on 30.03.2021 beyond the period of four years. As such, the proviso to Section 147 of the Act gets triggered. In such circumstances, the revenue has to satisfy that the reopening of the assessment fulfills the....
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.... Court. 19. In a recent judgment in the case of Mangalam Publications V. Commissioner of Income Tax, Kottayam (461 ITR 159), the Supreme Court dealt with the 'perennial question in Income tax jurisprudence' relating to re-assessment of income under Section 147 of the Act as in the present case. The defence taken by that assessee, as in the present case, was that the re-assessment proceedings were barred by limitation as the notice had been issued beyond the period of 4 years from the end of the relevant assessment year. 20. Judgments of the Supreme Court in the case of Kelvinator (supra), CIT V. Bimal Kumar Damani (261 ITR 87), Srikrishna (P) Ltd. V. CIT ((1999) 9 SCC 534), Phool Chand Bajrang Lal V.CIT ((1993) 4 SCC 77), CIT V. Lakhmani Mewal Das (103 ITR 437) and Calcutta Discount Co. Ltd. V. CIT (41 ITR 191) were taken into consideration by the Court and the re-assessments were ultimately quashed on the ground that the Department had not established any failure on the part of that assessee to make available relevant material for completion of assessment even at the original stage. In that context, the Bench states as follows: 73. It is true tha....
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....ake a full and true disclosure, the assumption of jurisdiction under section 147 if held to be bad in law. Though the discussion in regard to the assumption of jurisdiction beyond the period of limitation would suffice to allow this writ petition, in the interests of completion, we add a few words on the merits too." 13. In the case on hand, the reasons for reopening the assessment have been extracted above. It is stated that as per Note 24 to annual accounts 2013-14, the assessee on 08.06.2013 had converted the land held by it as fixed assets to project in progress. Further, as per the provisions of Section 45(2) of the Act, the profits or gains arising from transfer by way of conversion by the owner of a capital asset into a stock in trade shall be chargeable to income tax accounts and since the same was not assessed, there is reason to believe for reopening the assessment. 14. In fact, the entire materials in respect of the joint development agreement entered into with the buyers were also submitted and considered by the Assessing Officer and also dealt with in the assessment order. However, the Assessing Officer, by rejecting the objections to reopening, had passed the as....