VARSHA SHRIKANT PARANJAPE,MUMBAI vs. ASSTT. COMMISSIONER OF INCOME TAX - 25(3) , MUMBAI

WITHOUT PREJUDICE TO GROUND NO. 1: GROUND NO. 2: NON-ADJUDICATION OF GROUNDS ON MERITS IS BAD IN LAW: 2.1 On the facts and in the circumstances of the case and in law, the Id CIT(A) erred in not adjudicating the grounds on merits as contained in Ground No II to IV filed before the Id. CIT(A) and thereby simply dismissing the entire appeal solely upon upholding the reassessment proceedings. 2.2 The Appellant prays that the Id. CIT(A) be directed to adjudicate the grounds on merits WITHOUT PREJUDICE TO GROUND NO. 1 and 2: GROUND NO. 3: NOTIONAL CAPITAL GAIN CANNOT BE TAXED: 3.1 On the facts and in the circumstances of the case and in law, the ld. AO erred in substituting full value of consideration declared by the Appellant of Rs.8,61,04,750/- with Rs.13,72,13,911/- and thereby making an addition of Rs. 5,11,09,161/- 3.2 Ld. AO failed to appreciate and ought to have held that: 3.2.1 full value of consideration can never be substituted unless and until there is credible evidence available with the revenue which determines that the Appellant has received more consideration than what has been declared, 3.2.2 full value of consideration can only be substituted in the cases falling u/s 45(4), 50C and 50D of the Act Admittedly, the case of Appellant does not fall in the above sections. 3.3 The Appellant, therefore, prays that the addition made by the ld. AO be deleted. WITHOUT PREJUDICE TO GROUND NO. 1, 2 and 3: GROUND NO. 4: DOUBLE TAXATION OF SAME INCOME IS ABSURD AND ILLOGICAL: 4.1 On the facts and in the circumstances of the case and in law, the ld. AO erred in taxing the sales consideration of Rs.5,11,09,161/- in the hands of Appellant, despite the same income being offered to tax in the hands of other co-owners. 4.2 The Id. AO failed to appreciate and ought to have held that since the said amount of Rs.5,11,09,161/- has already been offered to tax in the hands of other co-owners, the addition made amounts to double taxation of the same income. 4.3 The Appellant prays that the additional income so brought to tax in the hands of the Appellant be deleted.

During the course of appellate proceedings before us the ld. Counsel submitted that assessment u/s 143(3) of the Act has been made in the case of the assessee and the long term capital gain earned on the share of the sold land was duly offered to tax. He further submitted that after 4 years from the end of relevant assessment year without any new tangible material the assessing officer has reopened the assessment without any valid reason. The ld. Counsel also referred the copy of computation of income filed with the original return of income wherein long term capital gain on sale of land was duly disclosed in the hand of the assessee as per the copy of the computation placed at page no. 5 of the paper book. The ld. Counsel also referred copy of notice u/s 143(2) of the Act issued by the assessing officer on 30.08.2013 at the time of original assessment proceedings wherein as per serial no. 5 of the notice the assessing officer has called for details of long term and short term capital gains. The ld. Counsel also referred copy of notice issued u/s 142(1) of the Act on 03.10.2013 during the course of original assessment proceedings wherein as per serial no. 3 and 4 the assessing officer has called for copy of sale deeds in respect of all transactions and note of applicability of Sec. 50C in respect of immovable property transactions. Similarly, the ld. Counsel referred the other notices issued u/s 142(1) of the Act on 12.12.2013 by the assessing officer during the course of original assessment wherein specific detail of sale of land and consideration received etc. along with long term capital gain were asked. He also referred the detail of compliance made by the assessee during the course of original assessment proceedings as per copies of such compliance placed at page no. 12-13 of the paper book filed by the assessee. The ld. Counsel also referred the copy of sale agreement placed at page no. 677 of the P a g e | Varsha Shrikant Paranjape Vs. ACIT, Circle 25(3) paper book wherein annexure 1 to the sale agreement showing total amount of sale consideration payable to the each co-owners along with other details of payments. By referring the various detail placed in the paper book the ld. Counsel submitted that the reopening of the case of the assesse is bad in law and even on merit the assessing officer could not establish that there is any escapement of the income. On the other hand, the ld. D.R supported the order of lower authorities.

Heard both the sides and perused the material on record. The assessment in the case of the assesseee u/s 143(3) of the Act was completed on 24.03.2014. Subsequently, the case of the assessee was reopened by issuing of notice u/s 148 of the Act dated 14.09.2016 on the ground that income chargeable to tax has escaped assessment within the meaning of Sec. 147 of the Act. Regarding reopening u/s 147 of the Act beyond a period of 4 years from the end of the relevant assessment year, the assessee claimed that all the detail pertaining to sale of land transactions were available on the record which were considered by the assessing officer at the stage of original assessment proceedings completed u/s 143(3) of the Act on 24.03.2014. The assessee also submitted that AO had failed to prove that there was an escapement of income by failure on the part of the assessee to disclose fully and truly on material facts necessary for her assessment. We have perused the copy of notices issued u/s 142(1) and 143(2) by the assessing officer during the course of original assessment proceedings as referred in the submission of the ld. Counsel and placed in the factual paper book filed on 28.09.2023. Vide notice dated 30.08.2013 the assessing officer asked the assessee to furnish the details of long term and short term capital gains and further vide notice dated 03.10.2013 u/s 142(1), the assessing officer directed the assesse to P a g e | Varsha Shrikant Paranjape Vs. ACIT, Circle 25(3) furnish copy of sale deed in respect of all transactions of immovable assets during the year along with copies of balance sheet. Thereafter on 12.12.2013 vide notice u/s 142(1) of the Act the assessing officer asked the assessee to furnish the details of sale of lands with name and address of parties, method of payment received and detail of bank account with statement showing whether the consideration received was deposited and how the same was utilised. Vide submission dated 16.09.2013 the assessee submitted copy of purchase and sale deeds of document of land and other detail placed in the paper book. Vide submission dated 20.11.2013 the assessee submitted detail of property purchased, copy of possession letter, confirmation of sale from M/s Matrix Developers Pvt. Ltd. etc. Further vide letter dated 24.12.2013 the assesse has submitted during the course of original assessment proceedings before the assessing officer the details of sale of land with other required details and detail of payment received etc. In the computation of total income the assessee has also given the complete details of sale of land and working capital gain on the sale of land. The complete record of sale transactions and copies of agreement were available before the assessing officer during the course of original assessment proceedings. In this regard, on perusal of the reason recorded for reopening of the assessment we find that the assessing officer has not brought on record any new tangible material to reopen the concluded assessment beyond period of 4 years from the end of the relevant assessment years to establish that there was any failure on the part of the assessee to disclose fully and truly facts of the case before the assessing officer. Therefore, we consider that reopening of the completed assessment in the case of the assesse after 4 year of the relevant assessment is not valid. Further, the assessing officer could not establish that in the case of the assessee that how there is escapement of income as the same amount has already been assessed P a g e | Varsha Shrikant Paranjape Vs. ACIT, Circle 25(3) in the case of the co-owners. The co-owner has offered the sale consideration to tax to the extent of the consideration allocated to them as per the agreement and have paid the taxes due thereon. The AO has also not contrary disproved the undisputed fact that the three co-owner have already offered the entire sale consideration of Rs.51,25,00,000/- for the year under consideration under the head capital gain we consider that the AO has not brought any evidences on record to demonstrate that there was any escapement of income, therefore, assessing the sale consideration in the hands of the assessee without disturbing the sale consideration already assessed in the hands of the co-owners is not justified. In view of the above facts and finding we consider that issuing of notice u/s 148 is not valid, therefore, ground no. 1 & 2 of the assessee are allowed and the assessment is set aside.

Since, we have quashed the notice issued u/s 148 of the Act, therefore, other ground of appeal