TaxTMI 
TaxTMI 
2026 (9) TMI 1077
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....nt of income of Rs.58,36,138/- whereas, in the writ petition being Special Civil Application No.8993 of 2025, the amount alleged to have escaped is Rs.1,01,35,652/-. The date of the impugned notices and the order is same. Hence, the writ petition being Special Civil Application No.8342 of 2025 is taken up as a lead matter. BRIEF FACTS : 3. In the captioned Special Civil Application No.8342 of 2025, the assessee in question - Kamlaben Ramanbhai Patel passed away on 27.06.2020. The petitioner is the legal representative of the deceased - assessee, who was issued a show cause notice dated 30.07.2024 under clause (b) of section 148A of the Act calling upon to show as to why the notice under section 148 of the Act should not be issued for the year under consideration. It was alleged that as per the information available on the insight portal in accordance with the risk management strategy formulated by the Board, the assessee has sold an immovable property-land of Rs. 75,00,000/- and filed the return of income on 31.03.2019 declaring total income at Rs. 11,67,190/- as income from long term capital gains. It was alleged that thus, the assessee has shown less capital gain by an amou....
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....red to be quashed and set aside since the Assessing Officer without determining the actual Fair Market Value of the property in case of the present petitioner, has by placing reliance on the report of DVO in the case of co-owner - Naynaben Ramanbhai Patel, runs contrary to the settled legal precedent. It is submitted that the petitioner - assessee while filing the income tax return, has declared the capital gains on the basis of registered Valuer's report dated 03.09.2017 and declared the value of the subject property. However, the Assessing Officer has disbelieved the registered Valuer's report by placing reliance on the DVO's report in case of the co-owner that too, which is determined on the basis of the survey numbers of another village. It is submitted that the DVO in the case of the co-owner has computed the Fair Market Value of the land in question as on 01.04.2001 and has reopened the assessment by alleging that the petitioner has shown less capital gain and the income of Rs.58,36,138/- has escaped the assessment of income chargeable to tax. In support of his submissions, learned advocate, Mr.Parimalsinh Parmar has placed reliance on the decision of this Court in the case o....
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....ence, it was found that the assessee has claimed indexed cost of acquisition on an amount which was determined on the basis of the registered sale Valuer's report, which was incorrect and hence, there was an escapement of income of Rs. 1,01,35,652/- in case of the petitioner of Special Civil Application No.8993 of 2025. Thus, it is urged that on this count, the assessment order may not be interfered. 6.1 As far as the second ground is concerned, learned Senior Standing Counsel, Mr.Rutvij R. Patel while referring to the explanation to the provision of Section 149(1)(b)(i) of the Act, has submitted that the money received by the petitioner from the sale proceedings and deposited in the bank accounts or otherwise would constitute an "asset" within the meaning of section 149(1)(b) of the Act. It is submitted that the definition of "asset" is having a wider scope, which includes any form of income escaping assessment as the income which escapes assessment activity results into asset of the assessee. Thus, it is urged that the writ petition may not be entertained. ANALYSIS AND OPINION : 7. We have heard the learned advocates appearing for the respective parties at length. We may....
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.... to reassessment. The elaboration of "asset" vide Explanation is inclusive, all-encompasing the elements specified therein. In the present case, indubitably, there has been a sale of the immovable property i.e. land which is included in asset. The sale proceeds have been deposited in the bank account by the petitioner. Thus, the assets in the form of immovable property-land gets converted to the form of deposits in the bank accounts after the amount of its sale is deposited. In the order passed under section 148A(d) of the Act, the language used by the Assessing Officer is that the income chargeable to tax, represented in the form of assets within the meaning of section 149(1)(b)(i) of the Act has escaped assessment. We agree to the opinion of the Assessing Officer. Section 54 of the Act lets individuals avoid paying long-term capital gains tax when they sell a property and reinvest the profit. The amount of so calculated is on the basis of the deduction claimed by the petitioner by determining the cost of acquisition in the return. Showing less capital gain against actual gain has direct nexus with the escapement of income, attracting the provision of Section 149(1)(b) of the Act.....
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....0. We find that in the writ petition being Special Civil Application No.8993 of 2025, the Assessing Officer has not produced the detailed valuation report determining the valuation of the land in question situated at Mouje : Sevasi, Tal. & Dist.Vadodara, which would indicate the methodology adopted for determining the Fair Market Value(FMV) of the land in question. In the captioned writ petition being Special Civil Application No.8342 of 2025, the Assessing Officer has produced the entire valuation report of the co-owner - Naynaben Ratilal Patel and a perusal of the same, would reveal that the Assessing Officer in the notice issued under section 148 of the Act, has considered the report of the DVO in the case of co-owner and the DVO has considered the two sale instances of 02.01.2001 and 24.10.2000 of the properties/land/plots of Village : Tandalja, Vadodara, by treating it as the adjoining property, and has determined the value of the land at Rs.205 per sq. mtr. as on 01.04.2001, which is fair and reasonable. The adjoining property referred in the sale instances belong to another village. There are no sale instances of the same village/area where the property of the petitioner bel....
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....any, collected and thereby form a belief thereon. 7.2 A similar view has been expressed by the Division Bench of this Court in case of Pr. CIT v. J. Upendra Construction (P) Ltd. (supra) (Gujarat) as well as in the case of Aavkar Infrastructure Co. (supra), in which, the Division Bench of this court has followed the decision of Supreme Court in the case of Dhariya Construction Co. (supra) and held that solely on the basis of DVO's report and without there being any further inquiry by the Assessing Officer to form an opinion that income chargeable to tax has escaped assessment and/or without applying mind to the information in the form of DVO's report, the Assessing Officer is not justified in reopening the assessment. From the material available on the record; except the report of DVO, there was no tangible material available with the Assessing Officer to form a believe that the income chargeable to tax has escaped the assessment. 7.3 Even otherwise, it appears from the DVO's report that the Assessing Officer has erred in relying upon DVO's report to form an opinion that the income chargeable to tax has escaped assessment. The DVO has mechanically and on t....