2026 (7) TMI 1388

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.... the Act, for the Assessment Year (AY) 2020-21. 2. On hearing both the sides, we find that among other grounds on merits, assessee by way of additional ground No. 1(a) to 1(b), has challenged the impugned assessment order alleging that the same is not sustainable under law for the reason that reopening the case of the assessee was done for a particular issue and for which Ld. AO was satisfied yet Ld. AO ended by making addition on distinct issue. 3. At the outset, we admit this additional ground for the reason that the same is pure question of fact and can be decided on the basis of facts. 4. In this context, as we go through the copy of notice under clause (b) of section 148A of the Act dated 21.03.2024, the annexures to this noti....

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....the capital gains which you have not offered for the taxation, therefore it remains unexplained and thus escaped assessment to the tune of above transaction done by you. Further, total difference in Market Value and Sale consideration is Rs. 80,56,000/- (Rs. 97,11,000/- minus Rs. 16,55,000/-) and therefore provisions of Section 50C of the Act are attracted in this case. Therefore the Market value of the property Rs. 97,11,000/- is considered as 'per section 50C of the Act which has not been offered by you. Hence the income to the tune of Rs. 97,11,000 is remain unexplained." 5. Now, in regard to this issue, during the assessment proceedings what Ld. AO observes is relevant, and para 4.5.1 are reproduced here:- "4.5.....

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....ound the deduction under Section 80 HH and 80-I as claimed by the assessee to be not admissible. He consequently while not making additions on those items of club fees, gifts and presents, etc., proceeded to make deductions under Section 80HH and 80-I and accordingly reduced the claim on these accounts. 20. The very basis of initiation of proceedings for which reasons to believe were recorded were income escaping assessment in respect of items of club fees, gifts and presents, etc., but the same having not been done, the Assessing Officer proceeded to reduce the claim of deduction under Section 80 HH and 80-I which as per our discussion was not permissible. Had the Assessing Officer proceeded not to make dis-allowance in respect of....