MAHINDRA SINGLA,NEW DELHI vs. ITO, WARD 2(4) , GURUGRAM

The appeal in National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. ITBA/NFAC/S/250/2022-23/1049628352 dated 10.02.2023 against the order of assessment passed u/s 143(3) read with Section 147 of the Income-tax Act, 1961 dated 27.12.2018 (hereinafter referred to as ‘the Act’) by ITO, Ward-2(4), Gurgaon (hereinafter referred to as ‘ld. AO’).

The assessee had challenged the validity of reopening of assessment u/s 147 of the Act in the instant case. The inter connected issue involved therein is as to whether the ld. CIT(A) was justified in confirming the addition towards long term capital gains (LTCG) of Rs 13,23,662/- in the facts and circumstances of the instant case.

I have heard the rival submissions and perused the materials available on record. At the outset, we find that the assessee had not filed the return of income for the Asst Year 2011-12. The assessee had purchased the property on 27.3.2008 for Rs 17,33,650/- and sold the same for Rs 18,00,000/- on 26.3.2011 relevant to the year under consideration. The ld. AO obtained information from the Sub-Registrar that the stamp duty value of the property that was sold by the assessee was Rs Page | 1 35,68,000/-. The ld. AO sought to substitute the full value of consideration of property sold at Rs 35,68,000/- being the value determined in terms of section 50C of the Act. For this purpose, the ld. AO reopened the assessment by issuing notice u/s 148 of the Act after recording reasons for reopening thereon. The ld. AR before us vehemently argued that the ld. AO had not mentioned either in the reasons or in the order disposing of the objections of the assessee that he is intending to substitute the sale consideration figure of Rs 35,68,000/- in terms of section 50C of the Act. Accordingly, the ld. AR pleaded that there was no income escaping assessment and ld. AO could not have formed any reasonable belief thereon warranting reopening u/s 147 of the Act. We are unable to comprehend ourselves to accept to this argument of the ld. AR before us in as much as at the time of registration of sale deed by the assessee on 26.3.2011 for Rs 18,00,000/-, the assessee is aware of the fact that the stamp duty value of the subject mentioned property was at Rs 35,68,000/-. Knowing that fact only, the assessee had proceeded to register the property at Rs 18,00,000/-. Merely because the ld. AO had not mentioned this fact as to from where the figure of Rs 35,68,000/- had been adopted by him, it does not automatically become fatal to the reassessment, especially when the said figure is nothing but the consideration adopted for the purpose of levy of stamp duty by the Sub-Registrar. Hence I hold that the assessment had been validly reopened by the ld. AO in the facts and circumstances of the instant case. The grounds raised by the assessee challenging the validity of reopening are hereby dismissed.