M/S KRISH HOME PVT. LTD., NEW DELHI V. INCOME TAX OFFICER, WARD-2-3, ALWAR

CO 16/JPR/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0299 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 27-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Keywords: Capital asset; Search and seizure; Audit objection; Tangible material; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings; Capital Gains
• Section: 143(3); 142(1); 115JB; 143(1); 143(2); 48; 13; 147; 148; 263; 10

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 237/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2013-14 THE ITO, WARD-2(3), ALWAR. CUKE VS. M/S KRISH HOMES PRIVATE LIMITED 203, CAXTON HOUSE, 2E, JHANDEWALAN EXTENSION, NEW DELHI-110055. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACCK 9397 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT CO NO. 16/JP/2019 (ARISING OUT OF ITA NO. 237/JP/2019) FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2013-14 M/S KRISH HOMES PRIVATE LIMITED 203, CAXTON HOUSE, 2E, JHANDEWALAN EXTENSION, NEW DELHI-110055. CUKE VS. THE ITO, WARD-2(3), ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACCK 9397 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI B.K. GUPTA (CIT) FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI ROHAN SOGANI (C.A.) & SHRI RAJEEV SOGANI (C.A.) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 16/12/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 23/12/2019 VKNS'K@ ORDER ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 2 PER: SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AND THE CROS S OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), ALWAR DATED 31.12.2018 FOR THE ASSESSMENT YEAR 2013-14 WHEREIN THE RESPECTIVE GROUNDS OF APPEAL ARE AS UNDER:- ITA NO. 237/JP/2019 (REVENUES APPEAL) ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE IN RESP ECT OF DEDUCTION OF RS. 13,98,46,990/- ON ACCOUNT OF GAIN ON SALE OF AGRICULTURE LAND (RURAL) OUT OF BOOK PROFIT, WITHOUT APPRECI ATING THE MATERIAL FACTS OF THE CASE. C.O NO. 16/JP/2019 (ASSESSEES APPEAL) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF LD. AO IN REOP ENING THE CASE OF THE ASSESSEE COMPANY U/S 147 OF THE INCOME TAX A CT, 1961. THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIE D, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED QUASHING THE ENTIRE ORDER PASSED BY THE LD. AO, IN THE REASSESSMENT PROCEEDINGS. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE COMPANY FILED ITS RETURN OF INCOME ON 28.09.2013 FOR A.Y. 2013-14 . IN ITS RETURN OF INCOME, THE ASSESSEE COMPANY DECLARED NIL INCOME UN DER REGULAR PROVISIONS OF THE ACT AS WELL AS DECLARED NIL BOOK PROFITS UNDER THE PROVISIONS OF SECTION 115JB OF THE ACT. THE ORIGINA L ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT VIDE ORDER DATED 29 .02.2016 WHEREIN ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 3 THE RETURNED INCOME OF THE ASSESSEE WAS ACCEPTED. T HEREAFTER, NOTICE U/S 148 OF THE ACT WAS ISSUED ON 28.02.2017 AFTER S EEKING APPROVAL OF THE APPROPRIATE AUTHORITY U/S 151 OF THE ACT. IN RE SPONSE, THE ASSESSEE E-FILED ITS RETURN OF INCOME ON 14.04.2017 DECLARIN G NIL INCOME AND ALSO SOUGHT REASONS FOR THE REOPENING THE ASSESSMEN T VIDE ITS LETTER DATED 24.04.2017. SUBSEQUENTLY THE CASE WAS TRANSFE RRED VIDE ORDER DATED 02.05.2017 BY THE PR. CIT (CENTRAL) JAIPUR. THEREAFTER NOTICE U/S 143(2) OF THE ACT ALONG WITH U/S 142(1) WAS ISSUED ON 07.11.2017. SUBSEQUENTLY, THE ASSESSEE FILED ITS OBJECTION AGAI NST THE REOPENING THE PROCEEDINGS VIDE ITS LETTER DATED 01.12.2017 WHICH WERE DISPOSED OFF BY THE ASSESSING OFFICER THROUGH SEPARATE ORDER DATED 06.12.2017. 3. AS PER THE ASSESSING OFFICER, THE ASSESSEE HAS S OLD AGRICULTURE LAND WHICH HAS RESULTED INTO GAIN OF RS. 13,98,46,9 90/-. AS PER THE ASSESSING OFFICER, THE SAID LAND BEING LOCATED IN R URAL AREA THOUGH DOES NOT FORM THE PART OF THE CAPITAL ASSET WITHIN THE M EANING OF SECTION 2(14)(III) OF THE ACT, AT THE SAME TIME, WHILE COMP UTING BOOK PROFITS U/S 115JB OF THE ACT, GAIN SO DERIVED ON SALE OF AGRICU LTURE LAND CANNOT BE EXCLUDED WHILE COMPUTING THE BOOK PROFITS. FOR THIS REASON, THE ASSESSMENT WAS RE-OPENED AND NOTICE U/S 148 WAS ISS UED. AS PER THE ASSESSING OFFICER, SUCH GAIN IS NOT INCOME DERIVED FROM LAND BUT IS THE INCOME DERIVED FROM SALE OF THE LAND WHICH CANNOT B E TERMED AS AGRICULTURE INCOME WHICH CAN BE CLAIMED AS EXEMPT U NDER SECTION 10 AND IN SUPPORT, RELIANCE WAS PLACED ON THE DECISION S IN CASE OF CIT V/S R. KRISHANARJUNAN 225 ITR 510 (KER) AND CIT V/S T.K . SARLA DEVI 167 ITR 136 (KER). ACCORDINGLY, THE INCOME RECEIVED FRO M SALE OF AGRICULTURAL LAND AMOUNTING TO RS. 13,98,46,990/- W AS ADDED BACK TO ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 4 THE BOOK PROFITS U/S 115JB AND THE ASSESSMENT WAS C OMPLETED U/S 147 R.W.S. 143(3) OF THE ACT AND TAX ON BOOKS PROFITS B EING HIGHER THAN THE TAX UNDER THE REGULAR PROVISION OF THE ACT, TAX WAS CHARGED U/S 115JB OF THE ACT ON SUCH BOOK PROFITS. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) FOLLOWED THE ORDER L D. CIT(A)-IV, IN ASSESSEE OWN CASE FOR A.Y. 2014-15 AND HELD THAT G AIN ON SALE OF AGRICULTURE LAND IS ELIGIBLE FOR EXCLUSION FROM BOO K PROFITS U/S 115JB OF THE ACT. HOWEVER, THE ASSESSEES GROUND CHALLENGIN G THE REOPENING OF THE ASSESSMENT U/S 147 WAS DECIDED AGAINST THE ASSE SSEE AND IN FAVOUR OF THE REVENUE. THEREFORE, IN THE PRESENT SET OF AP PEALS, THE REVENUE IS IN APPEAL AGAINST THE EXCLUSION OF PROFITS ON SA LE OF AGRICULTURE LAND WHILE COMPUTING THE BOOK PROFITS U/S 115JB OF THE A CT AND THE ASSESSEE IN ITS CROSS APPEAL IS AGAINST THE FINDINGS OF THE LD. CIT(A) WHERE HE HAS SUSTAINED THE REOPENING OF THE ASSESSMENT U/S 147 O F THE ACT. 5. AT THE OUTSET, THE LD. CIT/DR SUBMITTED THAT AS FAR AS REVENUES APPEAL IS CONCERNED, THE MATTER HAS BEEN DECIDED BY THE COORDINATE BENCH IN FAVOUR OF THE REVENUE FOR SUBSEQUENT YEAR I.E, A.Y. 2014-15 VIDE ORDER IN ITA NO. 390/JP/2019 DATED 13.12.2018. IT WAS FURTHER SUBMITTED THAT THE ORDER OF THE COORDINATE BENCH HA S SINCE BEEN AFFIRMED BY THE HONBLE RAJASTHAN HIGH COURT IN DB. APPEAL NO. 53/2019 DATED 19.07.2019. IT WAS ACCORDINGLY SUBMIT TED THAT ON MERITS, THE MATTER HAS BEEN DECIDED IN FAVOUR OF THE REVENU E AND THEREFORE, IN ABSENCE OF ANY CHANGE IN THE FACTS AND CIRCUMSTANCE S OF THE CASE, ORDER SO PASSED BY THE COORDINATE BENCH FOR THE A.Y 2014- 15 AS AFFIRMED BY ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 5 THE HONBLE RAJASTHAN HIGH COURT SHOULD BE FOLLOWED IN THE INSTANT CASE. 6. THE LD. AR FAIRLY SUBMITTED THAT ON MERITS, THE MATTER IS COVERED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE B Y THE EARLIER DECISION BY THE COORDINATE BENCH FOR A.Y 2014-15 WH ICH HAS ALSO BEEN AFFIRMED BY THE HONBLE RAJASTHAN HIGH COURT. 7. HAVING HEARD BOTH THE PARTIES AND GOING THROUGH THE RELEVANT MATERIAL ON RECORD, WE FIND THAT SIMILAR ISSUE REGA RDING EXCLUSION OF GAINS ON SALE OF AGRICULTURE LAND FOR THE PURPOSES OF COMPUTING THE BOOK PROFITS U/S 115JB HAS BEEN DEALT WITH BY THE COORDI NATE BENCH IN ASSESSEES OWN CASE FOR THE SUBSEQUENT ASSESSMENT Y EAR I.E, A.Y. 2014- 15 AND AFTER EXAMINING THE MATTER AT LENGTH, THE MA TTER HAS BEEN DECIDED IN FAVOUR OF THE REVENUE AND AGAINST THE AS SESSEE COMPANY. FURTHER, AS INFORMED BY THE LD CIT DR, THE SAID DEC ISION OF THE COORDINATE BENCH HAS SINCE BEEN AFFIRMED BY THE HON BLE RAJASTHAN HIGH COURT IN DB APPEAL NO. 53/2019 DATED 19.07.201 9. UNDISPUTEDLY, THERE ARE NO CHANGES IN FACTS AND CIRCUMSTANCES OF THE CASE AND THEREFORE, FOLLOWING THE DECISION OF THE COORDINATE BENCH AS AFFIRMED BY THE HONBLE RAJASTHAN HIGH COURT, THE MATTER IS DEC IDED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE COMPANY. THUS, TH E APPEAL OF THE REVENUE IS ALLOWED. 8. NOW COMING TO THE CROSS OBJECTION FILED BY THE ASSESSEE COMPANY WHEREIN THE ASSESSEE COMPANY HAS CHALLENGED THE ACTION OF ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 6 LD. CIT(A) IN UPHOLDING THE ACTION OF THE AO IN REO PENING THE ASSESSMENT PROCEEDINGS U/S 147 OF THE INCOME TAX AC T, 1961. 9. AT THE OUTSET, THE LD AR SUBMITTED THAT THE ASS ESSEE COMPANY HAD FILED A WRIT PETITION (S. B. CIVIL WRIT PETITIO N NO. 23569/2017) BEFORE THE HONBLE RAJASTHAN HIGH COURT AGAINST THE ISSUAN CE OF NOTICE U/S 148 OF THE ACT. IT WAS SUBMITTED THAT THE ASSESSEE COM PANY DOESNT WISH TO PURSUE THE SAID MATTER BEFORE THE HONBLE RAJASTHAN HIGH COURT AS THE REASSESSMENT ORDER U/S 147 R/W 143(3) HAS ALREADY B EEN PASSED BY THE ASSESSING OFFICER AND THE MATTER HAS NOW TRAVELLED UPTO THE TRIBUNAL. IT WAS SUBMITTED THAT THE ASSESSEE COMPANY SHALL SHORT LY FILE A FORMAL APPLICATION BEFORE THE REGISTRAR, HONBLE RAJASTHAN HIGH COURT WITHDRAWING ITS WRIT PETITION. IT WAS ACCORDINGLY REQUESTED THAT THE GROUND OF APPEAL SO TAKEN BY THE ASSESSEE COMPANY C HALLENGING THE ASSUMPTION OF JURISDICTION MAY BE ALLOWED AND ARGUM ENTS BE HEARD. THE LD CIT DR IS HEARD. AFTER HEARING BOTH THE PART IES, WE FIND THAT SINCE THE REASSESSMENT ORDER HAS ALREADY BEEN PASSE D BY THE ASSESSING OFFICER AND THE LD AR ON BEHALF OF THE ASSESSEE COM PANY HAS STATED AT THE BAR THAT IT SHALL BE WITHDRAWING ITS WRIT PETIT ION FILED BEFORE THE HONBLE RAJASTHAN HIGH COURT, BOTH THE PARTIES WERE ALLOWED TO CANVASS THEIR ARGUMENTS. THE ASSESSEE COMPANY WAS ALSO DIR ECTED TO FILE A COPY OF FORMAL APPLICATION AS SOON AS THE SAME WAS FILED BEFORE THE REGISTRAR, HONBLE RAJASTHAN HIGH COURT WITHDRAWING ITS WRIT PETITION AND THE REGISTRY HAS SINCE RECEIVED A LETTER DATED 19.12.2019 IN THIS REGARD. ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 7 10. DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT THE ASSESSEE COMPANY, WHILE FILING ITS RETURN OF INCOME , DISCLOSED RS. 13,98,46,990, AS INCOME EARNED FROM SALE OF AGR ICULTURE LAND. ALSO, FOR THE PURPOSE OF CALCULATING MAT, SUCH INCOME BEI NG EXEMPT, WAS REDUCED FROM THE BOOK PROFITS. THE ABOVE FACTUAL AS PECTS CLEARLY EMERGED FROM THE FOLLOWING DOCUMENTS, ALSO SUBMITTE D TO THE LD. AO, DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDING S:- I. AUDITED FINANCIALS OF THE ASSESSEE COMPANY FOR T HE RELEVANT PREVIOUS YEAR. II. FORM 29B FURNISHED BY THE ASSESSEE COMPANY DULY SIGNED BY ITS CHARTERED ACCOUNTANT. III. INCOME TAX RETURN FORM CONSISTING OF THE SCHED ULES PERTAINING TO PROFIT AND LOSS ACCOUNT AND CALCULATION OF BOOK PRO FITS IN ACCORDANCE WITH 115JB, FOR THE PURPOSE OF MAT. 11. THE LD. AR FURTHER SUBMITTED THAT THE AO VIDE N OTICE ISSUED U/S 142(1) DATED 04.01.2016 RAISED QUERIES WITH RESPECT TO THE INCOME OF RS. 13,98,46,990 EARNED BY THE ASSESSEE COMPANY FRO M SALE OF AGRICULTURE LAND. IN THIS REGARD, DETAILED SUBMISSI ONS HIGHLIGHTING THE ABOVE FACTUAL ASPECTS AND ALSO THE RESULTANT TAX TR EATMENT ADOPTED BY THE ASSESSEE COMPANY WERE MADE TO THE AO DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. IT WAS SUBMITTED T HAT THE AO BASED ON THE ABOVE FACTUAL POSITION FORMED AN OPINION THA T INCOME OF RS. 13,98,46,990 EARNED BY THE ASSESSEE COMPANY AS PART OF THE AGRICULTURE INCOME WOULD BE OUTSIDE THE PURVIEW OF MAT IN ACCORDANCE ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 8 WITH SECTION 115JB. THE AO PASSED ORDER U/S 143(3), ON 29.02.2016 ACCEPTING THE RETURNED INCOME FILED BY THE ASSESSEE COMPANY. THEREAFTER THE AO REOPENED THE CASE OF THE ASSESSEE COMPANY ON THE PREMISE THAT THE ASSESSEE COMPANY SHOULD HAVE OFFER ED SUCH INCOME, DERIVED FROM SALE OF AGRICULTURE LAND, FOR THE PURP OSE OF CALCULATING MAT. IN THE REASONS RECORDED ITSELF, THE AO ACCEPTE D THE FACT THAT DETAILS, AS MENTIONED HEREIN BEFORE, WERE DISCLOSED BY THE ASSESSEE COMPANY AND ON THE BASIS OF WHICH CLAIM OF THE ASSE SSEE COMPANY WAS INITIALLY ALLOWED BY AO. THE AO, IN SUCH REASONS RE CORDED, CITING VARIOUS JUDICIAL PRONOUNCEMENTS, STATED THAT INCOME OF THE ASSESSEE COMPANY ESCAPED ASSESSMENT, TO THE EXTENT THAT THE AGRICULT URE INCOME SHOULD HAVE BEEN OFFERED FOR MAT. IN THIS REGARD, IT WAS S UBMITTED THAT FOLLOWING FACTUAL POSITION IS UNDISPUTED, AFTER TAK ING COGNIZANCE OF THE MATERIAL AVAILABLE WITH THE LD. AO, DURING THE ORIG INAL ASSESSMENT PROCEEDINGS AND ALSO THE REASONS RECORDED SUBSEQUEN TLY FOR REOPENING THE CASE OF THE ASSESSEE COMPANY:- I. THE AO RAISED QUERIES W.R.T THE INCOME EARNED BY THE ASSESSEE COMPANY THROUGH SALE OF AGRICULTURE LAND. II. THE ASSESSEE COMPANY HAD FULLY AND TRULY DISCLO SED THE AGRICULTURE INCOME WHILE FILING THE RETURN OF INCOME AND ALSO D URING THE ORIGINAL ASSESSMENT PROCEEDINGS. III. THE AO, BASED ON THE ABOVE DETAILS, FORMED AN OPINION OF ALLOWING SUCH CLAIM OF THE ASSESSEE COMPANY, DURING THE ORIG INAL ASSESSMENT PROCEEDINGS. ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 9 IV. THE AO, IN THE REASSESSMENT PROCEEDINGS, BASED ON THE SAME SET OF FACTS AND DOCUMENTS ON RECORD CHANGED HIS EARLIER O PINION. FOR REASSESSMENT, THE AO WAS OF THE VIEW THAT THE SALE OF AGRICULTURE LAND IS NOT AGRICULTURE INCOME AND THUS SHOULD NOT HAVE BEEN REDUCED FROM THE CALCULATION OF BOOK PROFITS, FOR THE PURPOSE OF MAT. THIS OPINION WAS CONTRARY TO HIS EARLIER STAND TAKEN IN THE ORIGINAL ASSESSMENT PROCEEDINGS. V. NO NEW TANGIBLE MATERIAL WAS AVAILABLE WITH LD. AO WHILE REOPENING THE CASE OF ASSESSEE COMPANY. 12. IT WAS ACCORDINGLY SUBMITTED THAT THE REASONS W ERE BASED ON THE DOCUMENTS WHICH WERE ALREADY FURNISHED ALONG WITH R ETURN OF INCOME OR DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143 (3). THERE WAS NO NEW TANGIBLE MATERIAL BEFORE THE AO AS THERE IS NO REFERENCE TO ANY UNDISCLOSED FACT OR ANY FRESH MATERIAL OR EVIDENCE. THUS, THE ENTIRE REOPENING WAS BASED ON CHANGE OF OPINION AND, THERE FORE IS ILLEGAL AND VOID. 13. IT WAS FURTHER SUBMITTED THAT EVEN IN THE ORDE R PASSED BY THE AO, DISPOSING OFF THE OBJECTIONS RAISED BY THE ASSE SSEE COMPANY, AGAINST THE REASONS RECORDED, THE AO HAS CONFUSED H IMSELF WITH THE REVISIONARY POWER PROVIDE U/S 263 VIS--VIS POWER TO RE-ASSESS THE CASE OF THE ASSESSEE U/S 148. THE AO HAS POWER TO RE-OPE N THE CASE OF THE ASSESSEE COMPANY U/S 148 AND RE-ASSESS THE INCOME B ASED ON NEW TANGIBLE MATERIAL BROUGHT ON THE RECORD SUBSEQUENT TO THE ORIGINAL ASSESSMENT PROCEEDINGS. THE AO U/S 148 HAS NO POWER TO REVIEW OR REVISE HIS OWN ORDER ORIGINALLY PASSED U/S 143(3) O F THE ACT. THE POWER ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 10 OF REVISION ENSHRINED UNDER SECTION 263 ARE DIFFERE NT AND NOT AVAILABLE TO LD. AO HIMSELF. 14. IT WAS FURTHER SUBMITTED THAT EVEN LD. CIT(A) H AS NOT GIVEN ANY FINDING THAT THE PRESENT REASSESSMENT PROCEEDINGS I S BASED ON ANY NEW TANGIBLE MATERIAL, HAVING COME IN THE POSSESSION OF THE AO, SUBSEQUENT TO THE ORIGINAL ASSESSMENT PROCEEDINGS, UNDER SECTI ON 143(3). 15. IN SUPPORT OF HIS AFORESAID CONTENTIONS, RELIA NCE WAS PLACED BY THE LD AR ON THE DECISIONS IN CASE OF ACIT VS MANGA LAM CEMENT LTD. [2017] 78 TAXMANN.COM 334 (JAIPUR) AS AFFIRMED BY T HE HONBLE RAJASTHAN HIGH COURT IN CASE OF PCIT VS MANAGLAM CE MENT LTD. (DB INCOME TAX APPEAL NO. 211/2017 DATED 4.09.2017), CI T VS VAISHALI AVENUE [2014] 48 TAXMANN.COM 289 (RAJ), CIT VS HIND USTAN ZINC LTD. [2016] 70 TAXMANN.COM 262 (RAJ), IHHR HOSPITALITY ( P). LTD. VS ACIT [2019] 109 TAXMANN.COM 256 (DELHI), PAWAN SOOD VS I TO [2019] 111 TAXMANN.COM 241 (ALL), PCIT VS ATUL LTD. (APPEAL NO . 7 OF 2019 DATED 10.06.2019) PASSED BY HONBLE GUJARAT HIGH COURT AN D DECISION OF THE HONBLE SUPREME COURT IN CASE OF KELVINATOR OF INDI A LTD [2010] 187 TAXMAN 312 (SC). 16. IT WAS FURTHER SUBMITTED THAT THE CASE LAWS REL IED UPON LD. CIT (A) OF HIS ORDER ARE COMPLETELY DIFFERENT AND ARE N OT APPLICABLE TO THE FACTS OF THE CASE AT HAND. IN THE CASE OF JAVERI ST OCK BROKERS (P). LTD, [2007] 291 ITR 500 (SC), THE ASSESSEE COMPANY RECEI VED INTIMATION U/S 143(1) AND, THEREAFTER, CASE OF THE ASSESSEE WAS RE -OPENED U/S 147. HOWEVER, IN THE CASE AT HAND, ORIGINAL PROCEEDINGS WERE CARRIED OUT U/S 143(3) AND THEREAFTER RE-OPENING WAS DONE U/S 148. IN THE CASE OF ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 11 YUVRAJ VS. UNION OF INDIA [2009] 315 ITR 84 (BOM), THERE WAS AN EXPLICIT FINDING OF THE HONBLE HIGH COURT THAT THE RE WAS NO APPLICATION OF MIND BY AO WHEREIN EVEN THE NATURE OF INCOME EAR NED BY ASSESSEE WAS NOT CONSIDERED BY THE CONCERNED OFFICER. HOWEVE R, IN THE PRESENT CASE, ALL THE RELEVANT DOCUMENTS AS STATED HEREINBE FORE, WERE SUBMITTED BEFORE THE LD. AO IN THE ORIGINAL ASSESSMENT PROCEE DINGS. LD. AO EVEN ISSUED A DETAILED QUERY LETTER (LETTER DATED 04.01. 2016), WHEREIN, THE REQUIRED DETAILS WERE SOUGHT BY THE ASSESSEE COMPAN Y. TO THIS EFFECT, DETAILED SUBMISSIONS WERE MADE BY THE ASSESSEE COMP ANY ONLY AFTER WHICH ORDER WAS PASSED BY LD. AO IN THE ORIGINAL AS SESSMENT PROCEEDINGS, UNDER SECTION 143(3). IN VIEW OF THE A BOVE, IT WAS SUBMITTED THAT THE ENTIRE RE-ASSESSMENT PROCEEDINGS ARE ILLEGAL, BAD IN LAW AND DESERVES TO BE QUASHED AB-INITIO. 17. PER CONTRA, THE LD. CIT DR REFERRING TO THE ORI GINAL ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT SUBMITTED THAT T HE ASSESSING OFFICER HAS COMPUTED THE INCOME UNDER THE NORMAL PROVISIONS OF THE ACT AND AS FAR AS THE COMPUTATION OF BOOK PROFIT U/S 115JB OF THE ACT IS CONCERNED, THE SAME IS NOT DISCERNABLE FROM THE ORD ER OF THE ASSESSING OFFICER. IT WAS SUBMITTED THAT WHERE THE ASSESSING OFFICER HAS NOT EXAMINED THE MATTER RELATING TO COMPUTATION OF BOOK PROFITS U/S 115JB OF THE ACT AT FIRST PLACE AND THERE IS NO QUESTION OF CHANGE OF OPINION BY THE ASSESSING OFFICER. FURTHER, REFERRING TO THE NO TICE U/S 142(1) DATED 04.11.2016 WHICH HAS BEEN RELIED UPON BY THE LD. AR , THE LD. CIT DR SUBMITTED THAT IN THE SAID NOTICE ALSO, THE INFORMA TION WHICH HAS BEEN CALLED FOR BY THE ASSESSING OFFICER IS REFERRING TH E GIRDAWARI REPORT AND THE DISTANCE OF THE AGRICULTURAL LAND FROM THE OUTS IDE OF ANY MUNICIPAL ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 12 CORPORATION IN CONTEXT OF NORMAL PROVISIONS AND NOT IN THE CONTEXT OF EXCLUSION OF INCOME ON SALE AGRICULTURAL LAND FROM THE COMPUTATION OF BOOK PROFIT FOR THE PURPOSES OF LEVY OF MAT. IT WA S ACCORDINGLY SUBMITTED WHERE THE ASSESSING OFFICER HAS NOT EXAMI NED THE MATTER RELATING TO EXEMPTION OF INCOME ON SALE OF AGRICULT URAL LAND FROM THE COMPUTATION OF BOOK PROFIT U/S 115JB, THERE IS NO Q UESTION OF CHANGE OF OPINION. IT WAS FURTHER SUBMITTED THAT THE CONTENTI ON OF THE LD. AR REGARDING DISCLOSURE OF FULL AND TRUE DISCLOSURE DO ES NOT HELP THE CASE OF THE ASSESSEE AS IN THE INSTANCE CASE, THE REASSESSM ENT PROCEEDINGS HAVE BEEN INITIATED WITHIN THE PERIOD OF 4 YEARS FR OM THE END OF THE ASSESSMENT YEAR AND THE PROVISO TO SECTION 147 DOES NT APPLY. FURTHER, RELIANCE WAS PLACED ON THE DECISIONS IN CASE OF A.L .A FIRM VS. CIT (1991) 55 TAXMAN 497 (SC), DOLPHIN DRILLING LTD. VS . ACIT (2017) 88 TAXMANN.COM 91 (UTTRAKAND), GREATER MOHALI AREA DEV . AUTHORITY VS. DCIT (2018) 93 TAXMAN.COM 441(PUNJAB & HARYANA), GE E CITY BUILDERS P. LTD. VS. DCIT 106 TAXMAN.COM 69 (CHD), CHETAN SA BHARWAL VS. ACIT 110 TAXMAN.COM 57 (DEL), HEMJAY CONSTRUCTION CO. LT D. VS. ITO (2019) 109 TAXMAN.COM 59 (GUJ) AND SONIA GANDHI VS. ACIT ( 2018) 97 TAXMAN.COM 150. 18. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FOR ASSUMPTION OF JURISDICTION U/S 147, THE ASSESSING OFFICER MUST FORM A PRIMA FACIE OPINION O N THE BASIS OF MATERIAL THAT THERE IS AN ESCAPEMENT OF INCOME, THE OPINION FORMED MAY BE SUBJECTIVE BUT THE REASONS RECORDED OR THE I NFORMATION AVAILABLE ON RECORD MUST SHOW THAT THE OPINION IS NOT A MERE SUSPICION, THE REASONS RECORDED AND/OR THE DOCUMENTS AVAILABLE ON RECORD MUST SHOW ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 13 A NEXUS AND RELEVANCY TO THE OPINION FORMED BY THE ASSESSING OFFICER REGARDING ESCAPEMENT OF INCOME AND THE REASONS ARE REQUIRED TO BE READ AS THEY WERE RECORDED BY THE ASSESSING OFFICER . NO SUBSTITUTION OR DELETION IS PERMISSIBLE. NO ADDITIONS CAN BE MADE T O THOSE REASONS. NO INFERENCE CAN BE ALLOWED TO BE DRAWN ON THE BASIS O F REASONS NOT RECORDED. IT IS FOR THE ASSESSING OFFICER TO DISCLO SE AND OPEN HIS MIND THROUGH THE REASONS RECORDED BY HIM AND HE HAS TO S PEAK THROUGH THE REASONS. IN THE PRESENT CASE, THE REASONS RECORDED BY THE ASSESSING OFFICER BEFORE ISSUANCE OF NOTICE U/S 148 READ AS U NDER: 1. REASONS FOR THE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT: (A) THE ASSESSEE FILED ITS RETURN OF INCOME DECLARI NG TOTAL INCOME OF NIL WHICH WAS ASSESSED AT NIL VIDE ORDER U/S 143 (3) DATED 29.02.2016. (B) DURING THE PERIOD UNDER CONSIDERATION, THE ASSE SSEE HAS EARNED AGRICULTURAL INCOME OF RS. 25,500/-, DIVIDEN D INCOME OF RS. 3,42,988/- AND PROFIT ON SALE OF AGRICULTURAL L AND OF RS. 13,98,46,990/-. NO OTHER BUSINESS ACTIVITIES WERE C ARRIED OUT. (C) WHILE COMPUTING BOOK PROFIT U/S 115JB, THE ASSESS EE HAS REDUCED THE AMOUNT OF RS. 13,98,46,990/-, WHICH WAS CREDITED IN P&L ACCOUNT AS CAPITAL GAIN FROM SALE OF AGRICULTURAL LAND. THE CLAIM OF THE ASSESSEE WAS A LLOWED BY THE AO. (D) IN CASE OF CERTAIN COMPANIES, TAX IS REDUCED TO BE PAID ON BOOK PROFIT AS PER PROVISIONS OF SECTION 115JB. I N SUCH CASES ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 14 BOOK PROFITS IS REQUIRED TO BE COMPUTED STRICTLY IN ACCORDANCE TO THE PROVISIONS OF SECTION 115JB . THE BOOK PROFIT IS DEFINED UNDER EXPLANATION -1 BELOW SUB-SECTION (2) OF SECTI ON 115JB. ACCORDINGLY, BOOK PROFIT COMPUTED UNDER SUB-SECTI ON (2) IS INCREASED BY CERTAIN ITEMS DEBITED IN P&L ACCOUNT A ND REDUCED BY CERTAIN ITEMS CREDITED IN P&L ACCOUNT. THESE ITEMS ARE ENLISTED UNDER THE SAID EXPLANATION. THE ASSESSEE HAS REDUCE D AN AMOUNT OF RS. 13,98,46,990/- CREDITED IN P&L ACCOUNT AS C APITAL GAIN FROM SALE OF AGRICULTURAL LAND CLAIMING THAT IT IS AGRICULTURAL INCOME AND PROVISION OF SECTION 10(1) APPLIED TO IT . THE TERM AGRICULTURAL INCOME IS DEFINED U/S 2(1A) AS UNDER :- 2(1A) AGRICULTURAL INCOME MEANS- (A) ANY RENT OR REVENUE DERIVED FROM LAND WHICH IS SATIATED IN INDIA AND IS USED FOR AGRICULTURAL PURPOSES. IN VIEW OF THE DEFINITION OF AGRICULTURAL INCOME GIVEN U/S 2(1A), THE AMOUNT OF RS. 13,98,46,990/- CREDITED IN P&L AC COUNT AS CAPITAL GAIN FROM SALE OF AGRICULTURAL LAND IS NO T AN AGRICULTURAL INCOME DEDUCTABLE FROM THE BOOK PROFIT U/S 115JB . (E) IN SUPPORT OF THE ABOVE VIEW, RELIANCE IS PLACE D ON THE FOLLOWING JUDICIAL PRONOUNCEMENT: (I) THE HONBLE KERALA HIGH COURT IN THE CASE OF CI T V/S R. KRISHNARJUNAN (1997) 225 ITR 510 (KER.) HELD THAT:- ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 15 A RECEIPT RELATABLE TO THE DISPOSAL OR SALE OF AGR ICULTURAL LAND, WHETHER URBAN OR RURAL, WOULD BE A CAPITAL RE CEIPT, FROM WHICH CAPITAL GAINS WOULD ARISE. SUCH A RECEIP T CANNOT BE CONSIDERED AS AGRICULTURAL INCOME. (II) THE HONBLE KERLA HIGH COURT IN ANOTHER CASE OF CIT V/S T.K. SARALA DEVI (1987) 167 ITR 136 KER) HELD THAT:- THE PROFITS OR GAINS ARISING FROM 'THE SALE OF LAND CONSTITUTED INCOME BECAUSE SECTION 2( 24)INCLUDES A S 'INCOME' CAPITAL GAINS CHARGEABLE UNDER SECTION 45 OF THE ACT. SUCH GAIN IS, NEVERTHELESS, NOT INCOME DERIVED FROM LAND ; IT IS INCOME DERIVED BY THE SALE OF LAND. AL THOUGH LAND IS THE SOURCE OF THE INCOME, INCOME IS DERIVED NOT BY THE USE OF THE LAND, BUT BY THE SALE OF THE LAND, T HAT IS, BY CONVERSION OF THE LAND INTO CASH. IF INCOME RESULTS FROM THE SALE OF AGRICULTURAL LAND, IT IS NOT 'AGRICULTURAL INCOME' WITHIN THE MEANING OF SECTION 2( 1). WHEN CAPITAL ASSET IS SOLD, WHAT IS REALISED IS CAP ITAL RECEIPT AND NOT REVENUE RECEIPT. IF PROFIT OR GAIN RESULTS FROM SUCH A SALE, IT IS CHARGEABLE, NOT BECAUSE IT IS REVENUE , BUT BECAUSE THE STATUTE SPECIFICALLY CHARGES THE CAPITA L GAIN BY INCLUDING IT AS INCOME. (F) THE ASSESSEE HAS FAILED TO INCLUDE ABOVE RECEI PTS OF RS. 13,98,46,990/-IN ITS BOOK PROFIT COMPUTED U/S 115 JB AND ALSO FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FAC TS NECESSARY FOR ITS ASSESSMENT. THEREFORE, I HAVE THE REASONS TO BELIEV E THAT, THE ABOVE INCOME OF RS. 13,98,46,990/-, WHICH IS CHARGE ABLE TO TAX, HAS ESCAPED ASSESSMENT. 19. ON PERUSAL OF THE REASONS SO RECORDED BY THE AS SESSING OFFICER, IT IS NOTED THAT ORIGINAL ASSESSMENT PROCEEDINGS WERE COMPLETED U/S 143(3) VIDE ORDER DATED 29.02.2016 WHEREIN THE RETU RNED INCOME ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 16 DECLARING TOTAL INCOME AT NIL WAS ACCEPTED. FURTHER , IN POINT NO. (C) OF THE REASONS SO RECORDED, THE ASSESSING OFFICER HAS STATED THAT WHILE COMPUTING BOOK PROFIT U/S 115JB, THE ASSESSEE HAS REDUCED THE AMOUNT OF RS. 13,98,46,990/-, WHICH WAS CREDITED IN P&L ACCOUNT AS CAPITAL GAIN FROM SALE OF AGRICULTURAL LAND. THE CLAIM OF THE ASSESSEE WAS ALLOWED BY THE AO. THEREFORE, THE FACT THAT THERE WAS GAIN ON SALE OF AGRICULTURE LAND AMOUNTING TO RS 13,98,46,990, T HE FACT THAT THE SUCH GAINS WERE CREDITED BY THE ASSESSEE COMPANY IN ITS PROFIT/LOSS ACCOUNT AND THE FACT THAT THE ASSESSEE COMPANY HAS REDUCED SUCH GAINS ON SALE OF AGRICULTURAL LAND SO CREDITED IN THE PROFIT/LOSS ACCOUNT WHILE COMPUTING BOOK PROFIT U/S 115JB WERE AVAILABLE ON RECORD AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS AND THE ASSESSIN G OFFICER WAS DULY CEASED OF SUCH FACTUAL POSITION AND CLAIM OF THE AS SESSEE COMPANY AND BASIS EXAMINATION THEREOF, THE CLAIM OF THE ASSESSE E COMPANY WAS ALLOWED BY THE ASSESSING OFFICER WHILE COMPLETING T HE ORIGINAL ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT. THIS IS A FACTUAL POSITION WHICH IS CLEARLY EMERGING FROM THE REASONS SO RECORDED BY THE ASSESSING OFFICER AND WE THEREFORE DONOT HAV E TO GO ANY FURTHER TO ESTABLISH THE FACT THAT THERE IS NO NEW MATERIAL BROUGHT ON RECORD BY THE ASSESSING SUBSEQUENT TO COMPLETION OF ORIGINAL PROCEEDINGS U/S 143(3) AND THE MATTER WAS DULY EXAMINED DURING THE ORIGINAL ASSESSMENT PROCEEDINGS AND IT IS THEREFORE CLEARLY A CASE OF CHANGE OF OPINION WHERE ON THE SAME FACTS AND MATERIAL ON REC ORD, THE ASSESSING OFFICER WISHES TO TAKE A DIFFERENT VIEW THAN THE VI EW TAKEN EARLIER AND A MERE CHANGE OF OPINION CANNOT PER SE BE A REASON FOR REOPENING AS HELD BY THE HONBLE SUPREME COURT IN CASE OF KELVINATOR OF INDIA ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 17 LTD (SUPRA) WHERE AFFIRMING THE FULL BENCH DECISION OF THE HONBLE DELHI HIGH COURT, IT WAS HELD AS UNDER: 4. ON GOING THROUGH THE CHANGES, QUOTED ABOVE, MADE T O SECTION 147 OF THE ACT, WE FIND THAT, PRIOR TO DIRECT TAX L AWS (AMENDMENT) ACT, 1987 , RE- OPENING COULD BE DONE UNDER ABOVE T WO CONDITIONS AND FULFILMENT OF THE SAID CONDITIONS ALONE CONFERR ED JURISDICTION ON THE ASSESSING OFFICER TO MAKE A BACK ASSESSMENT, BU T IN SECTION 147 OF THE ACT [WITH EFFECT FROM 1-4-1989], THEY ARE GI VEN A GO-BY AND ONLY ONE CONDITION HAS REMAINED, VIZ., THAT WHERE T HE ASSESSING OFFICER HAS REASON TO BELIEVE THAT INCOME HAS ESCAP ED ASSESSMENT, CONFERS JURISDICTION TO RE-OPEN THE ASSESSMENT. THE REFORE, POST 1-4- 1989 , POWER TO REOPEN IS MUCH WIDER. HOWEVER, ONE NEEDS TO GIVE A SCHEMATIC INTERPRETATION TO THE WORDS 'REASON TO BELIEVE' FAILING WHICH, WE ARE AFRAID, SECTION 147 WOULD GIVE ARBITR ARY POWERS TO THE ASSESSING OFFICER TO RE-OPEN ASSESSMENTS ON THE BAS IS OF 'MERE CHANGE OF OPINION', WHICH CANNOT BE PER SE REASON T O REOPEN. WE MUST ALSO KEEP IN MIND THE CONCEPTUAL DIFFERENCE BE TWEEN POWER TO REVIEW AND POWER TO RE-ASSESS. THE ASSESSING OFFICE R HAS NO POWER TO REVIEW; HE HAS THE POWER TO REASSESS. BUT REASSE SSMENT HAS TO BE BASED ON FULFILMENT OF CERTAIN PRE-CONDITION AND IF THE CONCEPT OF 'CHANGE OF OPINION' IS REMOVED, AS CONTENDED ON BEH ALF OF THE DEPARTMENT, THEN, IN THE GARB OF RE-OPENING THE ASS ESSMENT, REVIEW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF 'CH ANGE OF OPINION' AS AN IN-BUILT TEST TO CHECK ABUSE OF POWE R BY THE ASSESSING OFFICER. HENCE, AFTER 1-4-1989 , ASSESSIN G OFFICER HAS POWER TO REOPEN, PROVIDED THERE IS 'TANGIBLE MATERI AL' TO COME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME F ROM ASSESSMENT. REASONS MUST HAVE A LIVE LINK WITH THE FORMATION OF THE BELIEF. OUR VIEW GETS SUPPORT FROM THE CHANGES MADE TO SECTION 147 OF THE ACT, AS QUOTED HEREINABOVE. UNDER THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987 , PARLIAMENT NOT ONLY DELETED THE WORDS 'REASON TO BELIEVE' BUT ALSO INSERTED THE WORD 'OPI NION' IN SECTION 147 OF THE ACT. HOWEVER, ON RECEIPT OF REPRESENTATI ONS FROM THE COMPANIES AGAINST OMISSION OF THE WORDS 'REASON TO BELIEVE', PARLIAMENT RE-INTRODUCED THE SAID EXPRESSION AND DE LETED THE WORD 'OPINION' ON THE GROUND THAT IT WOULD VEST ARBITRAR Y POWERS IN THE ASSESSING OFFICER. WE QUOTE HEREINBELOW THE RELEVAN T PORTION OF CIRCULAR NO. 549 , DATED 31-10-1989, WHICH READS AS FOLLOWS : ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 18 '7.2 AMENDMENT MADE BY THE AMENDING ACT, 1989, TO REINTRODUCE THE EXPRESSION 'REASON TO BELIEVE' IN S ECTION 147. A NUMBER OF REPRESENTATIONS WERE RECEIVED AGAINST T HE OMISSION OF THE WORDS 'REASON TO BELIEVE' FROM SECTION 147 A ND THEIR SUBSTITUTION BY THE 'OPINION' OF THE ASSESSING OFFI CER. IT WAS POINTED OUT THAT THE MEANING OF THE EXPRESSION, 'RE ASON TO BELIEVE' HAD BEEN EXPLAINED IN A NUMBER OF COURT RU LINGS IN THE PAST AND WAS WELL SETTLED AND ITS OMISSION FROM SEC TION 147 WOULD GIVE ARBITRARY POWERS TO THE ASSESSING OF FICER TO REOPEN PAST ASSESSMENTS ON MERE CHANGE OF OPINION. TO ALLAY THESE FEARS, THE AMENDING ACT, 1989 , HAS AGAIN AME NDED SECTION 147 TO REINTRODUCE THE EXPRESSION 'HAS REAS ON TO BELIEVE' IN PLACE OF THE WORDS 'FOR REASONS TO BE RECORDED B Y HIM IN WRITING, IS OF THE OPINION'. OTHER PROVISIONS OF TH E NEW SECTION 147, HOWEVER, REMAIN THE SAME.' 20. IN SUCH A SITUATION, THE QUESTION THAT ARISES F OR CONSIDERATION IS WHERE THERE IS NO NEW MATERIAL BROUGHT ON RECORD BY THE ASSESSING SUBSEQUENT TO COMPLETION OF ORIGINAL PROCEEDINGS U/ S 143(3) AND WHERE THE MATTER WAS DULY EXAMINED DURING THE ORIGINAL AS SESSMENT PROCEEDINGS, WHETHER THE ASSESSING OFFICER CAN STIL L ACQUIRE JURISDICTION BY EXERCISING POWERS U/S 147 OF THE ACT. 21. IN THIS REGARD, WE AGAIN REFER TO POINT NO. (D) OF THE REASONS SO RECORDED BY THE ASSESSING OFFICER WHERE IT HAS BEEN STATED THAT THE ASSESSEE HAS REDUCED AN AMOUNT OF RS. 13,98,46,990/ - CREDITED IN P&L ACCOUNT AS CAPITAL GAIN FROM SALE OF AGRICULTURAL LAND CLAIMING THAT IT IS AGRICULTURAL INCOME AND PROVISION OF SECTION 10(1) APPLIED TO IT. HOWEVER, THE TERM AGRICULTURAL INCOME IS DEFINED U/S 2(1A) TO MEAN ANY RENT OR REVENUE DERIVED FROM LAND WHICH IS SITU ATED IN INDIA AND IS USED FOR AGRICULTURAL PURPOSES AND IN VIEW OF THE S AID DEFINITION OF AGRICULTURAL INCOME GIVEN U/S 2(1A), THE AMOUNT O F RS. 13,98,46,990/- ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 19 CREDITED IN P&L ACCOUNT AS CAPITAL GAIN FROM SALE OF AGRICULTURAL LAND IS NOT AN AGRICULTURAL INCOME DEDUCTIBLE FORM THE B OOK PROFIT U/S 115JB OF THE ACT. IN SUPPORT, RELIANCE HAS ALSO BEEN PLA CED ON TWO DECISIONS OF THE HONBLE KERALA HIGH COURT REPORTED IN THE YE AR 1997 AND 1987 RESPECTIVELY. THESE PROVISIONS WERE VERY MUCH ON TH E STATUE BOOKS AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS AND EVE N THE JUDICIAL PRONOUNCEMENTS WERE AVAILABLE VERY MUCH AT TIME OF COMPLETION OF ORIGINAL PROCEEDINGS AND THE ASSESSING OFFICER HAD TAKEN A VIEW IN THE MATTER AND THE ASSESSING OFFICER THROUGH THE REASON S SO RECORDED IS BASICALLY SAYING THAT SUCH A VIEW WAS ERRONEOUS AND WRONG INTERPRETATION OF PROVISIONS OF LAW. THE ISSUE THE REFORE INVOLVES ERRONEOUS APPLICATION/INTERPRETATION OF PROVISIONS OF SECTION 10(1) AND SECTION 2(1A) OF THE ACT FOR THE PURPOSES OF COMPUT ATION OF BOOK PROFITS U/S 115JB OF THE ACT BY THE ASSESSING OFFICER WHILE COMPLETING THE ORIGINAL ASSESSMENT PROCEEDINGS. IN SUCH A SITUATI ON, WHERE THE ASSESSING OFFICER HAS INCORRECTLY OR ERRONEOUSLY AP PLIED LAW AND INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, THE REVEN UE IS NOT WITHOUT REMEDY AND RESORT TO PROVISIONS OF SECTION 263 COUL D HAVE BEEN MADE BY THE LD CIT. IN FACT, THE REVISIONARY JURISDICTIO N U/S 263 IS MEANT TO DEAL WITH SUCH TYPE OF CASES WHERE THE LD CIT CAN S TEP-IN AND CORRECT THE ASSESSING OFFICER. IN THE INSTANT CASE, THE OR IGINAL ASSESSMENT PROCEEDINGS WERE COMPLETED VIDE ORDER U/S 143(3) DA TED 29.02.2016 AND THEREFORE, THE PROVISIONS OF SECTION 263 COULD HAVE BEEN INVOKED BY THE LD CIT BY 31.03.2018. HOWEVER, INSTEAD OF INVO KING THE REVISIONARY JURISDICTION U/S 263 BY LD. CIT, THE ASSESSING OFFI CER HAS ASSUMED THE JURISDICTION U/S 147 OF THE ACT BY ISSUANCE OF NOTI CE DATED 28.02.2017. INTERESTINGLY, FOR SUCH ASSUMPTION OF JURISDICTION, THE LD CIT HAS ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 20 ACCORDED THE APPROVAL U/S 151 OF THE ACT. IT IS TH EREFORE A CASE WHERE MATTER WAS REFERRED TO THE LD CIT FOR SEEKING HIS A PPROVAL AND THE LD CIT INSTEAD OF HOLDING THAT THE MATTER FALLS UNDER SECTION 263 AND NOT UNDER SECTION 148 HAS GIVEN THE APPROVAL U/S 151 OF THE ACT WHICH SHOWS NON-APPLICATION OF MIND AND MECHANICAL GRANT OF APPROVAL. THEREFORE, IN THE INSTANT CASE, THE ASSUMPTION OF J URISDICTION U/S 147 BY ISSUANCE OF NOTICE U/S 148 CANNOT BE SUSTAINED AND HELD AS INVALID IN EYES OF LAW. WE THEREFORE FIND FORCE IN THE CONTEN TION OF THE LD AR THAT THERE IS A DISTINCTION BETWEEN POWER TO REVIEW AND POWER TO REASSESS AND THE AO DOESNT HAVE POWER TO REVIEW HIS OWN ORD ER AND SUCH POWER IS ENSHRINED UNDER SECTION 263 OF THE ACT AND BESTOWED ON THE LD CIT WHICH CANNOT BE CEDED TO THE ASSESSING OFFICER. IN THIS REGARD, WE DRAW SUPPORT FROM THE FULL BENCH DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF CIT VS USHA INTERNATIONAL LTD [2012] 348 ITR 485 WHEREIN IT WAS HELD AS UNDER: 13. IT IS, THEREFORE, CLEAR FROM THE AFORESAID POSITIO N THAT: (1) REASSESSMENT PROCEEDINGS CAN BE VALIDLY INITIAT ED IN CASE RETURN OF INCOME IS PROCESSED UNDER SECTION 143(1) AND NO SCRUTINY ASSESSMENT IS UNDERTAKEN. IN SUCH CASES THERE IS NO CHANGE OF OPINION; (2) REASSESSMENT PROCEEDINGS WILL BE INVALID IN CAS E THE ASSESSMENT ORDER ITSELF RECORDS THAT THE ISSUE WAS RAISED AND IS DECIDED IN FAVOUR OF THE ASSESSE. REASSESSMENT PROC EEDINGS IN THE SAID CASES WILL BE HIT BY PRINCIPLE OF 'CHANGE OF OPINION'. (3) REASSESSMENT PROCEEDINGS WILL BE INVALID IN CAS E AN ISSUE OR QUERY IS RAISED AND ANSWERED BY THE ASSESSEE IN ORI GINAL ASSESSMENT PROCEEDINGS BUT THEREAFTER THE ASSESSING OFFICER DOES NOT MAKE ANY ADDITION IN THE ASSESSMENT ORDER. IN SUCH SITUATIONS IT SHOULD BE ACCEPTED THAT THE ISSUE WAS EXAMINED BUT ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 21 THE ASSESSING OFFICER DID NOT FIND ANY GROUND OR RE ASON TO MAKE ADDITION OR REJECT THE STAND OF THE ASSESSEE. HE FO RMS AN OPINION. THE REASSESSMENT WILL BE INVALID BECAUSE T HE ASSESSING OFFICER HAD FORMED AN OPINION IN THE ORIGINAL ASSES SMENT, THOUGH HE HAD NOT RECORDED HIS REASONS. 14. IN THE SECOND AND THIRD SITUATION, THE REVENUE IS NOT WITHOUT REMEDY. IN CASE THE ASSESSMENT ORDER IS ERRONEOUS A ND PREJUDICIAL TO THE INTEREST OF THE REVENUE, THEY ARE ENTITLED T O AND CAN INVOKE POWER UNDER SECTION 263 OF THE ACT. THIS ASPECT AND POSITION HAS BEEN HIGHLIGHTED IN CIT V. DLF POWER LTD. [2012] 17 TAXMANN.COM 269 (DELHI) AND BLB LTD. V. ASSTT. CIT [2012] 206 TAXMAN 37 / 19 TAXMANN.COM 115 (DELHI) (MAG.). IN THE LAST DECISION IT HAS BEEN OBSERVED: '13. REVENUE HAD THE OPTION, BUT DID NOT TAKE RECOU RSE TO SECTION 263 OF THE ACT, INSPITE OF AUDIT OBJECTION. SUPERVI SORY AND REVISIONARY POWER UNDER SECTION 263 OF THE ACT IS A VAILABLE, IF AN ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. AN ERRONEOUS ORDER CONTRARY TO LAW THAT HAS CAUSED PREJUDICED CAN BE CORRECT, WHEN JURISDICTION UNDER SECTION 263 IS INVOKED.' 15. THUS WHERE AN ASSESSING OFFICER INCORRECTLY OR ERR ONEOUSLY APPLIES LAW OR COMES TO A WRONG CONCLUSION AND INCO ME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, RESORT TO SECTION 263 OF THE ACT IS AVAILABLE AND SHOULD BE RESORTED TO. BUT INITIATION OF REASSESSMENT PROCEEDINGS WILL BE INVALID ON THE GRO UND OF CHANGE OF OPINION. 16. HERE WE MUST DRAW A DISTINCTION BETWEEN ERRONEOUS APPLICATION/INTERPRETATION/UNDERSTANDING OF LAW AND CASES WHERE FRESH OR NEW FACTUAL INFORMATION COMES TO THE KNOWL EDGE OF THE ASSESSING OFFICER SUBSEQUENT TO THE PASSING OF THE ASSESSMENT ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 22 ORDER. IF NEW FACTS, MATERIAL OR INFORMATION COMES TO THE KNOWLEDGE OF THE ASSESSING OFFICER, WHICH WAS NOT O N RECORD AND AVAILABLE AT THE TIME OF THE ASSESSMENT ORDER, THE PRINCIPLE OF 'CHANGE OF OPINION' WILL NOT APPLY. THE REASON IS T HAT 'OPINION' IS FORMED ON FACTS. 'OPINION' FORMED OR BASED ON WRONG AND INCORRECT FACTS OR WHICH ARE BELIED AND UNTRUE DO N OT GET PROTECTION AND COVER UNDER THE PRINCIPLE OF 'CHANGE OF OPINION'. FACTUAL INFORMATION OR MATERIAL WHICH WAS INCORRECT OR WAS NOT AVAILABLE WITH THE ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMENT WOULD JUSTIFY INITIATION OF REASSESSMENT PROCEEDINGS. THE REQUIREMENT IN SUCH CASES IS THAT THE INFORMATI ON OR MATERIAL AVAILABLE SHOULD RELATE TO MATERIAL FACTS. THE EXPR ESSION 'MATERIAL FACTS' MEANS THOSE FACTS WHICH IF TAKEN INTO ACCOUN T WOULD HAVE AN ADVERSE AFFECT ON THE ASSESSEE BY A HIGHER ASSES SMENT OF INCOME THAN THE ONE ACTUALLY MADE. THEY SHOULD BE P ROXIMATE AND NOT HAVE REMOTE BEARING ON THE ASSESSMENT. THE OMISSION TO DISCLOSE MAY BE DELIBERATE OR INADVERTENT. THE QUES TION OF CONCEALMENT IS NOT RELEVANT AND IS NOT A PRECONDITI ON WHICH CONFERS JURISDICTION TO REOPEN THE ASSESSMENT. FURTHER, REFERRING TO THE EARLIER FULL BENCH DECISI ON IN CASE OF KELVINATOR INDIA, IT WAS HELD AS UNDER: 22. IN THE LAST PARAGRAPH QUOTED ABOVE, THE FULL BENCH REJECTED THE SUBMISSION THAT REASSESSMENT PROCEEDINGS WOULD BE JUSTIFIED IF THE ASSESSMENT ORDER IS SILENT OR DOES NOT RECOR D REASONS OR ANALYSIS OF MATERIAL ON RECORD. THIS, THE REVENUE H AD PROPOUNDED, WOULD SHOW NON APPLICATION OF MIND BY T HE ASSESSING OFFICER. IT WAS HELD THAT THE SAID SUBMIS SION WAS FALLACIOUS. FULL BENCH EXPLAINED THAT WHEN AN ASSES SMENT ORDER WAS PASSED UNDER SECTION 143(3), A PRESUMPTION COUL D BE RAISED THAT THE ORDER WAS PASSED AFTER APPLICATION OF MIND . REFERENCE WAS MADE TO CLAUSE (E) TO SECTION 114 OF THE INDIAN EVIDENCE ACT, 1872. THE CONTENTION IF ACCEPTED WOULD GIVE PREMIUM TO THE ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 23 AUTHORITY EXERCISING QUASI-JUDICIAL FUNCTION TO TAK E BENEFIT OF ITS OWN WRONG I.E. FAILURE TO DISCUSS OR RECORD REASONS IN THE ASSESSMENT ORDER. THE AFORESAID OBSERVATIONS HAVE B EEN MADE IN THE CONTEXT AND FOR EXPLAINING THE PRINCIPLE OF 'CH ANGE OF OPINION'. THE SAID PRINCIPLE WOULD APPLY EVEN WHEN THERE IS NO DISCUSSION IN THE ASSESSMENT ORDER BUT WHERE THE AS SESSING OFFICER HAD APPLIED HIS MIND. A WRONG DECISION, WRO NG UNDERSTANDING OF LAW OR FAILURE TO DRAW PROPER INFE RENCES FROM THE MATERIAL FACTS ALREADY ON RECORD AND EXAMINED, CANNOT BE RECTIFIED OR CORRECTED BY RECOURSE TO REASSESSMENT PROCEEDINGS. ASSESSEE IS REQUIRED TO DISCLOSE FULL AND TRUE MATE RIAL FACTS AND NEED NOT EXPLAIN AND INTERPRET LAW. LEGAL INFERENCE HAS TO BE DRAWN BY THE ASSESSING OFFICER FROM THE FACTS DISCL OSED. IT IS FOR THE ASSESSING OFFICER TO UNDERSTAND AND APPLY THE L AW. IN SUCH CASES RESORT TO REASSESSMENT PROCEEDINGS IS NOT PER MISSIBLE BUT IN A GIVEN CASE WHERE AN ERRONEOUS ORDER PREJUDICIAL T O THE REVENUE IS PASSED, OPTION TO CORRECT THE ERROR IS AVAILABLE UNDER SECTION 263 OF THE ACT. 22. FURTHER, FOR ASSUMPTION OF JURISDICTION, IN TH E REASONS SO RECORDED, THE ASSESSING OFFICER HAS ALSO STATED THA T ASSESSEE HAS FAILED TO FULLY AND TRULY DISCLOSE ALL MATERIAL FACTS NECE SSARY FOR THE ASSESSMENT. WHAT MATERIAL FACTS HAVE NOT BEEN DISCL OSED BY THE ASSESSEE COMPANY HAVE NOT BEEN SPELT OUT BY THE ASS ESSING OFFICER AND AS WE HAVE NOTED ABOVE, THE ASSESSING OFFICER HAS H IMSELF STATED THAT THE ASSESSEE HAS CREDITED CAPITAL GAIN ON SALE OF A GRICULTURAL LAND IN ITS PROFIT/LOSS ACCOUNT AND THE SAME HAVE BEEN REDUCED WHILE WORKING OUT BOOK PROFITS U/S 115JB OF THE ACT. THEREFORE, WE F IND THAT ALL PRIMARY FACTS HAVE BEEN DULY DISCLOSED BY THE ASSESSEE COMP ANY AND IT IS FOR THE ASSESSING OFFICER TO DRAW CORRECT LEGAL INFEREN CE THEREFROM. FURTHER, WE FIND THAT WHILE ALLEGING SUCH FAILURE ON THE PAR T OF THE ASSESSEE ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 24 COMPANY, THE ASSESSING OFFICER HAS APPARENTLY DRAWN REFERENCE TO THE PROVISO TO SECTION 147 OF THE ACT WHICH IS NOT APPL ICABLE IN THE INSTANT CASE AS THE NOTICE U/S 148 DATED 28.02.2017 HAS BEE N ISSUED WITHIN FOUR YEARS FROM THE END OF IMPUGNED ASSESSMENT YEAR A.Y 2013-14. THUS, THE PROVISO TO SECTION 147 AND THE CONDITION SO SPECIFIED THEREIN CANNOT BE INVOKED TO ASSUME JURISDICTION U/S 147 OF THE ACT. 23. IN LIGHT OF ABOVE DISCUSSIONS AND IN THE ENTIRE TY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT BASIC REQUIREMENT FOR ASSUMPTION OF JURISDICTION U/S 147 IS NOT SATISFIED IN THE INSTANT CASE AND CONSEQUENT REASSESSMENT PROCEEDING S DESERVE TO BE SET-ASIDE AND THE GROUND SO TAKEN BY THE ASSESSEE C OMPANY IN ITS CROSS-OBJECTION IS THUS DECIDED IN FAVOUR OF THE AS SESSEE COMPANY AND AGAINST THE REVENUE. 24. IN THE RESULT, THE APPEAL OF THE REVENUE AND CR OSS OBJECTION OF THE ASSESSEE IS DISPOSED OFF IN LIGHT OF ABOVE DIRE CTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 23/12/2019. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:-23/12/2019. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- ITO, WARD-2(3), ALWAR. ITA NO. 237/JP/2019 & CO NO. 16/JP/2019 ITO VS. M/S KRISH HOMES PVT. LTD. 25 2. IZR;FKHZ@ THE RESPONDENT- M/S KRISH HOMES PRIVATE LIMITED, NE W DELHI. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. ITA NO. 237/JP/2019 & CO NO. 16/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR