SANJEEV GARG,NEW DELHI vs. ACIT,CIRCLE 2(2)(2)(1), GHAZIABAD

Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules. 3. The assessee has taken the following grounds of appeal: 1. That proceedings carried out u/s 147 read with sec 148 of the I Tax Act, 1961, are bad in law, as the Ld Assessing Officer had no "Reasons to believe" that any income chargeable to tax had escaped assessment. That the Ld Assessing Officer did not provide the assessee with a copy of the "Reasons to believe" and copy of the approval obtained u/s 151 of the Act, and did not provide the assessee any opportunity to file "Objections" and consequently no order disposing "objections" was passed. That the proceedings carried out u/s 147/148 without complying with the guidelines of the Hon'ble Supreme Court laid down in "G K N Drive shaft (India) Ltd", vitiate the proceedings, rendering them bad in law, liable to be quashed. 2. That proceedings u/s 147/148 initiated after more than four years from the end of the assessment year to which the proceedings relate, without showing that there was failure on the part of the assessee in making a true and complete disclosure of all material facts in the return filed, render the proceedings bad in law, liable to be quashed. 3. That the Ld Assessing Officer has erred on facts and in law in computing the income of the assessee chargeable to tax at Rs. 80,68,487 as against return filed declaring income at Rs.33,18,623 after making addition/disallowance aggregating Rs 47,49,864 to the income declared on erroneous and illegal grounds, untenable in law. 4. That no notice u/s 143(2) was issued by the Ld AO, a statutory requirement for the Ld AO to assume juri iction to carry out the reassessment proceedings, rendering the proceedings bad in law, without juri iction and liable to be quashed. 5. That the Ld Assessing Officer has erred in not allowing deduction of Rs. 8,87,225, on account of "indexed cost of improvement", a statutory deduction to be allowed in computing the "Capital gain" chargeable to tax under section 45 of the I Tax Act, 1961. 6. That the Ld Assessing Officer has erred in not allowing deduction of Rs. 38,62,639 u/s 54 of the I Tax Act, 1961,, a statutory deduction to be [A.Y. 2012-13] Shri Sanjeev Garg Page 3 of 20

Facts on record show that the assessee filed his return of income on 31.07.2012 declaring an income of Rs. 32,98,620/-. The case of the assessee was selected on the basis of AIR information available with the department i.e. sale of immovable property valued at Rs. 30 lakhs or more during the F.Y. 2011-12 relevant A.Y 2012-13. 5. The assessee has raised the fundamental objections on assumption of juri iction u/s 148 on the following grounds: i) Assessing Officer while recording reasons, recorded that no return of income was filed. Accordingly, assessment framed u/s 147/143(3) of the Act is invalid as the facts were wrongly recorded and relied on Gujrat High Court decision in the case of Mumaz Hazi Mohhmad Menon 408 ITR 268(Guj) and Dr Ajit Gupta 383 ITR 361 (Del). ii) Secondly, the assessee challenged the grant of approval u/s 151 by specified Authority as without [A.Y. 2012-13] Shri Sanjeev Garg Page 4 of 20

1. Assessee further claimed deduction u/s 54 and thereafter reflected LTCG on sale of the property in the return filed for AY 2012-13 as under: Asset in the case of others where proviso under section 112(1) is not exercised a Full value of consideration

The ld. counsel for the assessee relied upon the following case laws: (i) CIT Vs.Laxman Das Khandelwal [Supreme Court] ii) ACIT Vs.Hotel Bluemoon 321 ITR 362 iii) SA Syncon Infrastructure Services ITA No. 2040/DEL/2010 iv) PCIT Vs. M/s Consortium Nussli Comfort Net [Delhi HC] v) PCIT Vs. Paramount Biotech Industries [Delhi High Court] vi) M/s Travancore Diagnostics [P] Ltd [Kerala High Court] vii) Shaily Junueja Vs ACIT [Delhi High Court] vii) CIT Vs. Batra Bhatta Co. [Delhi High Court]

Per contra, the ld. DR relied on the orders of the authorities below and contended that the reasons are prima facie belief that income has escaped which has been complied by the Assessing Officer and therefore, reasons recorded cannot be faulted. 9. Having heard the rival submissions, we find it pertinent to reproduce the reasons for reopening the assessment u/s 147 of the Act by the Assessing Officer which read as under: “In this case PAN AIR information has been received from the Sub