IMMACULATE JUDITH,NEYVELI vs. ACIT CUDDALORE CIRCLE, CUDDALORE

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ITA 2992/CHNY/2017Status: DisposedITAT Chennai25 July 2019AY 2012-135 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reasons recorded for reopening were vague and lacked a live link to any specific issue. The reopening was considered to be based on suspicion and fishing inquiries, making it unsustainable.

What were the facts?

The assessee challenged the reopening of assessment and subsequent additions made by the Assessing Officer (AO). The AO had reopened the assessment based on alleged discrepancies in the declared Long Term Capital Gains (LTCG) on the sale of immovable property.

What were the issues?

Whether the reopening of assessment was valid based on the reasons recorded by the AO. Whether the reasons provided established a credible belief of income escaping assessment.

Which sections of the Income-tax Act were involved?

Section 147,Section 148

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI GEORGE MATHAN & SHRI INTURI RAMA RAO

Hearing: 25.07.2019

आदेश / O R D E R

PER GEORGE MATHAN, JUDICIAL MEMBER:

1.

This is an appeal filed by the assessee against the Order of the Commissioner of Income Tax (Appeals), Puducherry, in PDY/2016-17 dated 24.10.2017 for the AY 2012-13.

2.

Mr. R.Clement Ramesh Kumar, Addl.CIT, represented on behalf of the Revenue and Mr.J.Prabhakar, FCA, represented on behalf of the assessee.

3.

In the assessee’s appeal, the assessee has raised the following concise grounds of appeal:

1. The Hon'ble C.I.T.(A) is not justified in upholding the reopening of assessment when no speaking order was passed on objections thereto violating the decision of apex court in [2003] 259 ITR 19 (SC) and the jurisdictional High Court in [2018] 401 ITR 215 (Mad).

2. The Hon'ble C.I.T.(A) is not justified in sustaining the reopened assessment based on flimsy grounds without establishing the live link between the basis for reopening and the materials available on record for formation of credible belief of income escaping assessment.

3.. The Hon’ble C.I.T.(A) is not justified in sustaining the disallowance of cost of construction for compound walls at Rs.17.30 lakhs , borewell for 3.5 lakhs, car shed for Rs.1,71,882/- and cost of improvements for Rs.20.50 lakhs without due regard the maintenance of accounts only for a 6 years window in terms of Rule 6P of the Income Tax Rules.

4. The Hon'ble C.l.T.(A) is not justified in approving an inchoate and illegal valuation report for determining cost of construction and disregarding the valuation report furnished by the appellant, on frivolous grounds.

5.

The Hon'ble C.I.T.(A) is not justified in sustaining the value adopted under section 50 C in utter disregard to the valid objections raised on priors reference to S.R.O. as well as illegal valuation threat on the apudant on the penultimate data of time bar.

6.

The Hon'ble C.I.T.(A) has no basis to approve the valuation report under section 50 C working out guideline value post 1/4/2012 when guideline value as on date of transfer is staring ex-facie in the said report itself at Rs.42.15 per sq feet whose value translates to Rs.91,80,270/- only as against the exaggerated version of Rs.2,99,10,923/-.

7.

In any event, the order of the C.I.T (Appeal) is illegal, arbitrary and made without due regard to provisions on reopening of assessments and rendered at exaggerated values without legal standing.

8.

Your appellant craves the indulgence of the Hon'ble I.T.A.T to furnish additional evidence as well as supplemental and additional grounds of appeal on account of the rendition of assessment close to time bar without proper opportunity and unilateral decisions on evidences collected/ furnished during the course of re- assessment proceedings.

9. For these grounds and for such other grounds that may be adduced at the time of hearing, it is prayed that the order of the assessing officer and that of the C.l.T( Appeal) be cancelled.

4.

The Ld.AR drew our attention to Page No.15 of the Paper Book, which was a copy of the reasons recorded for the purpose of re-opening.

The same is extracted herein below:

GOVERNMENT OF INDIA INCOME TAX DEPARTMENT OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX CUDDALORE CIRCLE S.N CHAVADY. CUDDALORE-607 002

AAJPI 9414 P/148/Reason/2014-15 Date: 03.02.2015

To Smt. Immaculate Judith, D-12, Block-13, Rabindranath Tagore Road, Neyveli-607 803.

Sir, Sub: Income Tax Assessment- your own - AY 2012-2013 - Reasons for reopening of assessment - furnishing of – regarding.

Ref: i) Notice u/s. 148 dated 26-11-2014. ii) Your letter dt. 30-12-2014 received on 29-01-2015.

Kindly refer to the above.

The reasons for reopening your case for the Assessment Year 2012-13 is furnished hereunder as requested.

On perusal of records, it is seen that you had claimed Long Term Capital Gains of Rs.47,69,249/- on the sale of immovable property worth Rs.2.01 crores. But it is noted that there are some discrepancies in declaring the Long Term Capital Gain.

In view of the above, income is considered to have escaped assessment within the meaning of Section 147 and Notice u/s.148 was issued.

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