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Income Tax Appellate Tribunal, ‘C’ (SMC
Before: SHRI GEORGE MATHAN]
आदेश / O R D E R
This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-15, Chennai, in appeal No.171/CIT(A)-15/14-15, dated 22.02.2016 for the assessment year 2007-2008.
ITA No.1360/Mds/2016 :- 2 -:
Mrs. Nithya Sankaran, represented on behalf of the assessee 2. and Shri. V. Nandakumar represented on behalf of the Revenue.
It was submitted by the ld. Authorised Representative that the assessee is an individual who is having business income and capital gains. It was submitted that assessee had filed her return of income for the relevant assessment year on 07.03.2008. The assessment u/s. 143(3) of the Income Tax Act, 1961 (in short ‘’the Act’’) was completed on 17.12.2009. It was submitted that subsequently, the assessment was reopened u/s. 147 of the Act and the notice u/s. 148 of the Act was issued on 07.10.2013. Ld. Authorised Representative drew my attention to the reasons recorded for the purpose of reopening at page 14 of the paper book which is extracted as under:-
GOVERNMENT OF INDIA INCOME TAX DEPARTMENT Office of the Income Tax Officer, Business Ward V (1) Room No. 602, 6th Floor, Annex Building, 121, Mahathma Gandhi Road, Chennai-34 BW-V(1)/AOMPS6663K/2007-08 Dated 17/2/14.
To Mrs. Sabina Muyeenuddin, No.l0, Casuarina Dirve, Neelanqarai, Chennai - 600 041. Madam Sub: Income-tax assessment - A.Y.2007-08 – Your own - Supply of reason - Reg.
ITA No.1360/Mds/2016 :- 3 -:
Ref: 1. Notice u/s.148 dated 7.10.13. 2.Return of income filed by you on 13.11.13. 3.N.otice u/s.143(2) dated 17.2.14 With reference to the above, reason based on which your assessment for the A.Y.2007-08 was re-opened is as under: "The assessee has filed his return of income for the A.Y. 2007 -08 on 07.03.08 admitting income at Rs. 1,06,954. The case was selected for scrutiny for Cash Deposit based:' oil AIR Information and assessment u/s.143(3) was completed on 17.12.09 disallowing interest to banks and addition on the ground of less drawings. From the AIR- Non-filer list for the A.Y.2012-13, it is seen that the assessee along with her husband sold vacant:land at Neelangarai for a consideration of Rs. 3.15 crores but failed to file return. Hence she was issued a letter calling for return of income for the A.Y.2012-13. She filed a letter statinq that she along with her husband sold 12.5 cents of land at No.l0, Casurina Drive, Neelangarai, Chennai, on 18.4.11 and since the land is an agricultural land, capital gains is exempt from tax. On a perusal of the documents furnished, it is seen that she also sold 25 cents of this land on 1.11.06 vide Doe. No.6271/2006. The land is situated within the Registration District of South Chennai and Sub-Registration District of Neelangarai. The land was originally purchased by the assessee and her husband from one Mrs R.V.Gruhalakshmi on 28.1.05 who purchased it from A.P.M.S.Shahul Hameed Marakayar & Sons, a Partnership Firm. This Firm has already plotted the land before selling it to Mrs. R.V':Gruhalakshmi which is evidence from page 5 of Purchase Deed dated 28.1.05. But, the assessee failed to admit Short-term capital gains in the return of income on the pretext that it is agricultural land. The land is not an agricultural land since it as already plotted before it.was purchased by the assessee and her husband. Moreover: the land is situated within the Municipal limits of Chennai. Since the assessee has n admitted Short-term capital gains, I have reason to believe income chargeable to tax has escaped assessment.
(GEETHA KRISHNAMURTHY) Income Tax Officer, Business Ward V(1) Chennai -34
ITA No.1360/Mds/2016 :- 4 -:
It was submitted that the reasons for reopening where that the assessee had purchased and sold land at Neelangarai for a consideration of �3,15,00,000/- but had failed to file the return. It was submitted that when filing original income tax return assessee had taken into consideration the income from capitals gains on the sale of the said land and the same was shown as exempt as the same was agricultural land. Ld. Authorised Representative drew my attention to the copy of the return alongwith computation of income, Balance sheet and income and expenditure account for the relevant assessment year at pages 2 to 7 of the paper book. Further, subsequently, the said return was processed u/s. 143(3) of the Act and the original assessment order was passed on 17.12.2009. She drew my attention to pages 8 to 10 of the paper book which has the copy of the assessment order passed u/s. 143(3) of the Act dated 17.12.2009. She drew my attention to page 2 of the assessment order wherein ld. Assessing Officer had recorded that assessee had produced ‘’books of accounts and other details such as bank statements, purchase and sale of agricultural land details, details of consultancy charge..................’’.
It was submitted that the assessee had filed her return of income and in the course of assessment issue of purchase and sale of the agricultural land had been duly examined and considered. It was submitted that consequently, reopening of the assessment beyond the ITA No.1360/Mds/2016 :- 5 -: limitation of four years, in the absence of any fresh materials and in the absence of the recording of the ld. Assessing Officer as to the failure on the part of the assessee to disclose fully and truly all material facts relevant for her assessment, made the re-opening invalid. It was submitted that the reopening may be quashed.
In reply, the ld. Departmental Representative vehemently supported the orders of the ld. Assessing Officer and the ld. Commissioner of Income Tax (Appeals). It was submitted that satisfaction has been recorded by the Assessing Officer in so far as all details regarding sale and purchase of the agricultural land was not produced and in fact the agricultural land as claimed was not agricultural land at all. It was submitted that consequently on account of the AIR information received, the assessee has been treated as a non filer and the reopening had been done by the ld. Assessing Officer. It was submitted that reopening was validly done and was liable to be upheld.
I have considered the rival submissions. A perusal of the 5. reasons recorded shows that the ld. Assessing Officer has recognized that the assessee had filed his return for the relevant assessment year and on the basis of the AIR information, assessment has also been taken up and completed u/s. 143(3) of the Act. Ld. Assessing Officer
ITA No.1360/Mds/2016 :- 6 -: then records that from the AIR non filers list for the assessment year 2012-2013, it is seen that the assessee has sold vacant land at Neelankari. From this it becomes evident that there is some information regarding assessee for the assessment year 2012-2013. It does give the ld. Assessing Officer any information regarding purchase or sale of land for the assessment year 2007-2008. Thus, clearly there is no live link between the information if any available with the ld. Assessing Officer and the relevant assessment year concerned which has been reopened. Further, a perusal of the original assessment order u/s. 143(3) of the Act on 17.12.2009 shows that then ld. Assessing Officer has looked into details of the purchase and sale of agricultural land when he completed the assessment u/s. 143(3) of the Act. A perusal of the computation of the total income of the assessee for the relevant assessment year also shows that the income from capital gains has been disclosed and claimed as exempted as agricultural land. A perusal of the original assessment order passed on 17.12.2009 at page 3 also shows that in respect of the AIR information the source and evidence for the deposits as per the AIR has been recorded as verified. The fact being thus and the reopening being the beyond limitation of four years, as it is noticed, ld. Assessing Officer has not shown as to the existence of any new information nor having shown that there is failure on the part of the assessee to ITA No.1360/Mds/2016 :- 7 -: disclose fully and truly the material facts required for her assessment, the reason recorded is only on a change of opinion which is not permissible. This being so, I am of the view that reopening of assessment is invalid and consequently the same stands quashed.
Grounds 6 to 14 have not been specifically argued on behalf 6. of the assessee or the Revenue. Consequently, the same are not adjudicated.
In the result, the appeal of the assessee is allowed. 7.
Order pronounced in the open court at the time of hearing on Wednesday, the 17th day of May , 2017, at Chennai.