Sh. Rajesh Kumar, HUF, Shimla V. ITO, Shimla

ITA 1068/CHANDI/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1579 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-09-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 01-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Depreciation; Cost of acquisition; Wrong claim; Difference of opinion; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 244A; 2(14); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 1068/CHD/2014 ASSESSMENT YEAR: 2007-08 SHRI RAJESH KUMAR,HUF VS THE ITO, FLAT NO. 4, WARD 1, RAJDEEP APARTMENTS, SHIMLA. CHHOTA SHIMLA, SHIMLA. PAN: AAJHR1036E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VISHAL MOHAN RESPONDENT BY : SHRI JITENDER KUMAR DATE OF HEARING : 16.09.2015 DATE OF PRONOUNCEMENT : 22.09.2015 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(APPEALS) SHIMLA DATED 20.10.2014 FOR ASSESSMENT YEAR 2007-08. 2. IN THIS APPEAL, ASSESSEE HAS CHALLENGED THE RE- OPENING OF THE ASSESSMENT UNDER SECTION 147 READ WI TH SECTION 148 OF THE INCOME TAX ACT AND DENYING THE EXEMPTION UNDER SECTION 10(37) OF THE INCOME TAX AC T. 3. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS G ROUND NOS. 2 & 3 IN THE APPEAL OF THE ASSESSEE, THEREFORE , THE ISSUE LEFT FOR CONSIDERATION IS THE RE-OPENING OF T HE 2 ASSESSMENT UNDER SECTION 147/148 OF THE INCOME TAX ACT AND EXEMPTION CLAIMED UNDER SECTION 10(37) OF THE A CT. 4. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. 5. BRIEFLY THE FACTS OF THE CASE ARE THAT ORIGINAL RETURN OF INCOME WAS FILED ON 28.07.2007 DECLARING AN INCO ME OF RS. 1,06,420/- WHICH WAS PROCESSED UNDER SECTION 14 3(1) AT THE SAME INCOME AND A REFUND OF RS. 12,43,360/- WAS ISSUED INCLUDING INTEREST UNDER SECTION 244A OF THE ACT. CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT UNDER SECTION 143(3) WAS COMPLETED VIDE ORDER DATED 27.11 .2009 AT THE RETURNED INCOME. 6. CERTAIN PIECE OF LAND WAS ACQUIRED BY THE HIMACH AL PRADESH HOUSING & URBAN DEVELOPMENT AUTHORITY AND I N LIEU OF THAT, ASSESSEE RECEIVED A SUM OF RS. 81,64, 782/- DURING FINANCIAL YEAR UNDER APPEAL. THE LAND BEING URBAN LAND SITUATED IN MUNICIPAL LIMIT, ATTRACTED CAPITAL GAINS IN THE HANDS OF THE ASSESSEE. A SUM OF RS. 11 LACS WAS PAID BY THE ASSESSEE AGAINST ITS CAPITAL GAIN LIABI LITY. LATER ON, IT WAS NOTICED THAT THE EXEMPTION UNDER S ECTION 10(37) OF THE ACT WAS WRONGLY ALLOWED TO THE ASSESS EE AND RE-ASSESSMENT PROCEEDINGS WERE INITIATED UNDER SECT ION 148 OF THE ACT. THE ASSESSEE CONTENDED BEFORE ASSES SING OFFICER THAT THIS ISSUE HAS ALREADY BEEN CONSIDERED AND ADJUDICATED IN EARLIER PROCEEDINGS UNDER SECTION 14 3(3) OF THE ACT. THUS, THERE IS A CHANGE OF OPINION, RE- 3 ASSESSMENT PROCEEDINGS CANNOT BE INITIATED. THE ASSESSING OFFICER STATED THAT ORIGINAL ASSESSMENT F OLDER WAS NOT AVAILABLE WITH HIM AND THE FILE WAS RECONST RUCTED ON THE BASIS OF INFORMATION AND DOCUMENTS SUPPLIED BY THE ASSESSEE. THE QUESTION RAISED BY THE ASSESSEE REGARDING VALIDITY OF THE RE-ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER STATED THAT THERE ARE TWO BASIC REQUIREMENTS, FIRST IS THAT THE ASSESSING OFFICER M UST HAVE REASON TO BELIEVE AND SECONDLY, THERE MUST BE REASON TO BELIEVE THAT SUCH INCOME CHARGEABLE TO TA X HAS ESCAPED ASSESSMENT BY REASONS OF OMISSION OR FAILUR E ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRUL Y ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. THE ASSES SING OFFICER NOTED THAT BOTH THE CONDITIONS ARE SATISFIE D IN THIS CASE. THE ASSESSING OFFICER HELD THAT WRONG CLAIM O F EXEMPTION UNDER SECTION 10(37) OF THE ACT AND ALLOW ANCE OF THE SAME IN THE ABSENCE OF ALL MATERIAL FACTS, I N THE ORIGINAL ASSESSMENT, THE INCOME CHARGEABLE TO TAX H AD ESCAPED ASSESSMENT. 6(I) THE ASSESSING OFFICER STATED THAT ASSESSEE'S CONTENTION THAT THE LAND WAS COMPULSORILY ACQUIRED BY HIMUDA WAS WRONG. THE LAND WAS ACQUIRED THROUGH NEGOTIATIONS AND SETTLEMENT ON AGREEABLE RATE BY TH E LAND OWNERS AND HIMUDA. THE ASSESSEE WAS NOT ENTITLED T O ANY CAPITAL GAINS DEDUCTION UNDER SECTION 10(37) OF THE ACT ON THE GROUND THAT ASSESSEE ALONGWITH TWO OTHER PERSONS NAMELY SH. ANUDEEP KUMAR AND SH. SANDEEP KUMAR PURCHASED LAND IN KASUMPTI IN THE YEAR 2003 I N 4 TWO PARTS IDENTIFIED AS LOT -1 WAS PURCHASED AND TRANSFERRED IN THE NAME OF S/SH. ANUDEEP, RAJESH KU MAR AND SANDEEP BY WAY OF SALE DEED DT.30/04/2003. THE LAND FALLING IN LOT-2 ALLEGED TO HAVE BEEN PURCHASE D BY WAY OF 'SALE AGREEMENT' DT. 30/04/2003. THE ASSESSE E WAS ASKED TO PRODUCE THE PURCHASE DEEDS IN RESPECT OF B OTH THE CHUNKS OF LAND CLAIMED TO BE ACQUIRED BY THE HIMUDA. THE ASSESSING OFFICER ,FROM THE DETAILS NOT ICED THAT THERE WAS NO PURCHASE DEED IN RESPECT OF LOT-2 FOR WHICH A PAYMENT OF RS.20 LAKHS WAS MADE. AS PER PARTITION DEED, FOR BOTH THE LANDS FALLING IN LOT-1 & LOT- 2, MUTUALLY ENTERED BETWEEN S/SH. ANUDEEP, RAJESH KUMAR AND SANDEEP AND BY VIRTUE OF THIS INSTRUMENT, ALL THE THREE CO-OWNERS DIVIDED THE TOTAL LAND IN 1/3 RD SHARE EACH. REGARDING LAND FALLING IN LOT-2 NO SALE DEED WAS EXECUTED IN FAVOUR OF THE PURCHASERS LAND THE LAND WAS STILL APPEARING IN THE NAME OF SH. JOGINDER SINGH (PATTEDAR). THE PAYMENT WAS ALSO MADE TO SH. JOGIND ER SINGH THROUGH GPA HOLDERS. THE AO STATED THAT THE MUTUAL PARTITION HAS TO BE CERTIFIED BY THE LAND RE VENUE OFFICER UNDER SECTION 135 OF THE LAND REVENUE MANUA L. THE DEDUCTION U/S 10(37) WAS NOT ALLOWABLE IN RESPE CT OF THIS LAND WHICH WAS LOCATED IN URBAN MUNICIPAL LIMI TS. THE CLAIM OF THE ASSESSEE WAS, THEREFORE, DENIED. THE ASSESSING OFFICER CALCULATED LONG TERM CAPITAL GAIN IN THE HANDS OF THE ASSESSEE FOR ASSESSMENT YEAR UNDER APP EAL AT RS. 65,28,195/- AND ADDED THE SAME TO THE RETURN ED INCOME. 5 7. THE ASSESSEE CHALLENGED THE RE-OPENING OF THE ASSESSMENT BEFORE LD. CIT(APPEALS) AS WELL AS DENYI NG THE DEDUCTION UNDER SECTION 10(37) OF THE ACT. THE LD. CIT(APPEALS) DISMISSED BOTH THE GROUNDS OF THE APPE AL OF ASSESSEE AND ULTIMATELY DISMISSED APPEAL OF THE ASS ESSEE. 8. WE HAVE CONSIDERED RIVAL SUBMISSIONS ADVANCED BY BOTH THE PARTIES WITH REFERENCE TO THE MATERIAL AVA ILABLE ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE FILED C OPY OF THE REASONS RECORDED FOR RE-OPENING OF THE ASSESSME NT AT PAGE 24 OF THE PAPER BOOK AND TRANSLATED COPY AT PA GE 24A AND 24B OF THE PAPER BOOK. THE REASONS RECORDE D FOR RE-OPENING OF THE ASSESSMENT READ AS UNDER : INCOME TAX DEPARTENT 1. NAME OF THE ASSESSEE : RAJESH KUMAR 2. ADDRESS : FLAT NO.8, RAJDEEP APARTMENT CHOTTA SHIMLA, SHIMLA 3. PAN : AAJHR1036E 4. WARD/CIRCLE/RANGE : WARD I, SHIMLA 5. YEAR OF ASSESSMENT : 2007-08 REASONS FOR RE-OPENING ASSESSMENT UNDER SECTION 14 7 READ WITH SECTION 148 OF THE INCOME TAX ACT IN THIS CASE ASSESSMENT FOR A.Y 2007-08 WAS MADE U/ S 143(3) ON 27.11.2009 AND INCOME WAS ASSESSED AT RS 106420/- I.E BY ACCEP TING RETURNED INCOME. ON GOING THROUGH ASSESSMENT RECORDS IT HAS BEEN NOTICE D THAT SH, RAJESH KUMAR , KARTA OF HUF'S LAND HAS BEEN ACQUIRED BY FTP HOUSIN G BOARD, SHIMLA FOR CONSIDERATION OF RS 8164782/- DURING F.Y 2006-07. T HE SAID LAND WAS PURCHASED BY THE ASSESSEE ALONG WITH TWO OTHER PERS ONS SH. SANDEEP KUMAR AND SH. ANUDEEP KUMAR FOR CONSIDERATION OF RS 20 LA CS AND THE STAMP DUTY WAS PAID AT RS 380000/-. THE COST OF PURCHASE OF LA ND WORKS TO RS 2380000/- AND L/3 RD SHARE OF SAME IS AT RS 793333/- I.E. COST OF ACQUI SITION OF LAND IN THE HANDS OF RAJESH KUMAR. THE ASSESSEE HAD STATED THAT HE IS NOT LIABLE TO 6 CAPITAL GAIN TAX U/S 10(37) OF THE INCOME TAX ACT 1 961, WHICH HAS BEEN ACCEPTED BY THAN AO AS SUCH. THE ACTION OF THE AO I S NOT CORRECT, AS HE FAILED TO ASSESS THE LONG TERM CAPITAL GAIN, BECAUSE THE L AND OF THE ASSESSEE WAS SITUATED WITH IN THE JURISDICTION OF MUNICIPAL COMM ITTEE SHIMLA I.E. MOHAL KASUMPATI, KOTI TEHSIL OF DISTT SHIMLA AND IT COMES UNDER THE JURISDICTION OF TEHSILDAR (URBAN), SHIMLA. IN VIEW OF SAID FACTS TH E LAND OF THE ASSESSEE IS A CAPITAL ASSET WITHIN THE DEFINITION OF SEC.2(14) AND SEC. 10(37) IS NOT APPLICABLE. THE LONG TERMS CAPITAL GAINS OF THE ASS ESSEE IS TO BE ASSESSED AS UNDER:- SALE CONSIDERATION OF LAND = RS. 8164782/- COST OF ACQUISITION OF ASSET IN FY 2003-04 =RS. 7 93333/- COST OF INFLATION INDEX IN FY 2003-04 = RS. 463/- COST OF INFLATION INDEX IN FY 2006-07 =RS. 519/- INDEX COST OF ACQUISITION =793333X 519/46 =RS.889287/- LONGTERM CAPITAL GAIN =RS.72 75495/- IN VIEW OF SAID FACTS, I HAVE REASON TO BELIEVE THA T AN INCOME OF RS 7275495/- UNDER THE HEAD LONG TERM CAPITAL GAIN FOR THE A.Y 2 007-08 HAS BEEN ESCAPED FROM ASSESSMENT WITH IN THE MEANING OF SECTION 147 OF THE INCOME TAX ACT.. THEREFORE NOTICE U/S 148 FOR THE A.Y 2007-08 IS REC OMMENDED (JAGDARSHAN SINGH) INCOME TAX OFFICER DATED : 12.03.2012. WARD-1, SHIMLA. 9. THE LD. COUNSEL FOR THE ASSESSEE ALSO REFERRED T O PB- 17 WHICH IS THE STATEMENT OF TOTAL INCOME FILED WIT H THE ORIGINAL RETURN OF INCOME IN WHICH ASSESSEE HAS GIV EN THE NOTE, WHICH READS AS UNDER : NOTES:- 1. COPY OF A/C WITH THE FIRM IS ATTACHED. 2. DURING THE YEAR MY AGRICULTURAL LAND AT DHOBI GHAT MEASURING 3064.06 SQ. METRES WAS ACQUIRED BY H.P.HO USING BOARD DURING THE YEAR. THE SAID LAND WAS AN BAKHAL ABBAL USED FOR THE PURPOSE OF CULTIVATION AND THEREFORE NOT LI ABLE TO CAPITAL GAIN TAX U/S 10(37) OF THE INCOME TAX ACT, 1961 THE TOTAL 7 COMPENSATION RECEIVED FROM H.P. HOUSING BOARD FOR T HE SAID LAND WAS RS. 81,64,782/=.THE SAID LAND WAS PURCHASE D FOR RS. 14,90,000/-.THE SAID LAND WAS PURCHASED IN APRIL, 2 003 BY MAKING WITHDRAWAL OUT OF MY CAPITAL ACCOUNT WITH M/ S RAJDEEP APARTMENTS A PARTNERSHIP CONCERN. 10. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT THE ASSESSING OFFICER, AT THE ORIGINAL ASSESSM ENT STAGE ISSUED SHOW CAUSE NOTICE DATED 05.05.2009, CO PY OF WHICH IS FILED AT PAGE 19 OF THE PAPER BOOK IN WHIC H THE ASSESSING OFFICER IN PARA 3(II) HAS RAISED THE FOLL OWING QUERY TO THE ASSESSEE : AS PER THE INFORMATION GIVEN IN THE COLUMN OTHER INFORMATION (TRANSACTIONS REPORTED THROUGH ANNUAL INFORMATION RETURN YOU HAVE SHOWN TRANSACTIONS OF RS. 81,64,782/- UNDER THE CODE 007. IN THE CASE OF, PL EASE FURNISH COMPLETE DETAILS OF TRANSACTIONS ALONGWITH DOCUMENTARY EVIDENCES. 11. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO PB -20 WHICH IS THE REPLY FILED BEFORE ASSESSING OFFICER I N RESPONSE TO THE ABOVE QUERY RAISED BY THE ASSESSING OFFICER VIDE LETTER DATED 02.06.2009 IN WHICH THE A SSESSEE HAS SPECIFICALLY EXPLAINED THAT HE HAS RECEIVED RS. 81,64,782/- AS COMPENSATION OF THE LAND FROM HIMUDA SHIMLA WHICH WAS ACQUIRED COMPULSORILY AND WAS DULY SHOWN IN THE RETURN OF INCOME FILED FOR THE YEAR. THE SAID LAND WAS PURCHASED BY HIM ON 30.04.2003. HIS SHARE WAS 1/3 RD . A COPY OF THE PARTITION DEED ALONGWITH MAP FROM REVENUE AUTHORITIES SHALL BE FURNISHED ON THE NEXT DATE OF HEARING. COPIES OF THE ORIGINAL DOCUMENTS ARE BEING 8 PRODUCED FOR ASSESSING OFFICERS VERIFICATION. THE SAID LAND WAS PURCHASED FOR CONSIDERATION OF RS. 14,90,0 00/-. THE LD. COUNSEL FOR THE ASSESSEE ALSO REFERRED TO P B- 22 WHICH IS THE ORIGINAL ASSESSMENT ORDER UNDER SECTIO N 143(3) DATED 27.11.2009 IN WHICH THE ASSESSING OFFI CER, AFTER GOING THROUGH THE REQUISITE DOCUMENTS AND INFORMATION CALLED FROM TIME TO TIME AFTER EXAMININ G THE SAME, ACCEPTED THE RETURNED INCOME. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ENTIRE ISSUE WAS EX AMINED BY THE ASSESSING OFFICER AT THE ORIGINAL ASSESSMENT STAGE, THEREFORE, SUBSEQUENT ASSESSING OFFICER SHOULD NOT REOPEN ASSESSMENT ON MERE CHANGE OF OPINION. HE HAS SUBMIT TED THAT FOR CLAIMING EXEMPTION UNDER SECTION 10(37) OF THE INCOME TAX ACT, THE CAPITAL ASSET EVEN COULD FALL W ITHIN URBAN AREA. THEREFORE, ASSESSING OFFICER HAS RECOR DED NON-EXISTING REASONS IN THE REASONS FOR RE-OPENING, THEREFORE, RE-OPENING OF THE ASSESSMENT IS BAD IN L AW. THE LD. DR, HOWEVER, RELIED UPON ORDERS OF THE AUTHORIT IES BELOW. 12. AFTER CONSIDERING RIVAL SUBMISSIONS, WE DO NOT FIND ANY JUSTIFICATION TO SUSTAIN THE IMPUGNED ORDERS RE GARDING RE-OPENING OF THE ASSESSMENT UNDER SECTION 147/148 OF THE ACT. HON'BLE FULL BENCH OF DELHI HIGH COURT IN THE CASE OF KELVINATOR OF INDIA LTD. 256 ITR 1 BY FOLLO WING CIRCULAR NO.549 OF CBDT HELD THAT ON MERE CHANGE OF OPINION OF AO CANNOT BE A GROUND FOR RE-ASSESSMENT AND THAT AMENDMENT OF SEC. 147 W.E.F. 1.4.89 HAS NOT ALTERED THE POSITION. HONBLE GUJRAT HIGH COURT 9 IN THE CASE OF GARDEN SILK MILLS P. LTD. 237 ITR 66 8 HELD THAT HOWEVER WIDE THE SCOPE OF TAKING ACTION U/S 1 48 OF IT ACT, IT DOES NOT CONFIRM JURISDICTION ON CHANGE OF THE INTERPRETATION OF A PARTICULAR PROVISION EARLIER AD OPTED BY THE ASSESSING AUTHORITY. FOR COMING TO THE CONCLUSI ON THAT THERE HAS BEEN EXCESSIVE LOSS OR DEPRECIATION ALLOW ANCE OR THAT THERE HAS BEEN UNDER ASSESSMENT OR ASSESSMENT AT A LOWER RATE OR FOR APPLYING OTHER PROVISIONS OF EXPL ANATION 2 TO SEC. 147, IT MUST BE ON MATERIAL AND IT SHOULD HAVE NEXUS FOR HOLDING SUCH OPINION CONTRARY TO WHAT HAS BEEN EXPRESSED EARLIER. EVEN AFTER THE AMENDMENT OF SEC. 147, MERE CHANGE OF OPINION DOES NOT CONFIRM JURISDICTIO N ON THE ITO TO INITIATE PROCEEDING FOR REASSESSMENT MER ELY BY RESORTING TO EXPLANATION 1 TO SEC. 147. HONBLE CA LCUTTA HIGH COURT IN THE CASE OF BERGER PAINTS INDIA LTD. 245 ITR 648 HELD WHEN ANY PARTICULAR ISSUE HAS BEEN CONSIDE RED BY THE ITO AND CIT(A) AND WHEN THERE IS NO FAILURE TO DISCLOSE THE FACTS, THE REASSESSMENT PROCEEDINGS AR E NOT VALID. HON'BLE SUPREME COURT IN THE CASE OF CIT VS. FORANER FRANCE, 264 ITR 566 HELD REASSESSMENT NOT ON BASIS OF MERE CHANGE OF OPINION LAW SAME BEFORE A ND AFTER AMENDMENT BY DIRECT TAX LAWS. HON'BLE SUPREME COURT IN THE CASE OF INDIAN OIL CORPORATION, 159 IT R 956 HELD THAT NO CASE U/S 148 IS MADE OUT WHEN THE FACT S WERE KNOWN ALL ALONG WITH TO THE REVENUE WHILE MAKING TH E ORIGINAL ASSESSMENT. HON'BLE SUPREME COURT IN THE C ASE OF ASSOCIATED STONE INDUSTRY LTD., 224 ITR 560 HELD TH AT THE ASSESSEE SHALL HAVE TO DISCLOSE ONLY THE PRIMARY FA CTS. 10 13. HON'BLE SUPREME COURT IN THE CASE OF CIT V KELVINATOR OF INDIA LTD. 320 ITR 561 CONFIRMED THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF KEL VINATOR OF INDIA LTD. HOLDING THAT THE CONCEPT OF CHANGE O F OPINION MUST BE TREATED AS AN IN-BUILT TEST TO CHEC K THE ABUSE OF POWER. 13(I) HON'BLE BOMBAY HIGH COURT IN THE CASE OF TITA NOR COMPONENTS LTD. V ACIT 343 ITR 183 HELD AS UNDER : WHERE A REASSESSMENT IS SOUGHT TO BE MADE AFTER FOU R YEARS THE POWER CONFERRED BY SECTION 147 OF THE INCOME-TAX ACT, 196 1, DOES NOT PROVIDE AFRESH OPPORTUNITY TO THE ASSESSING OFFICER TO CORR ECT AN INCORRECT ASSESSMENT MADE EARLIER UNLESS THE MISTAKE IN THE A SSESSMENT SO MADE IS THE RESULT OF A FAILURE OF THE ASSESSEE TO FULLY AN D TRULY DISCLOSE ALL MATERIALS FACTS NECESSARY FOR ASSESSMENT . THERE IS A DIFFERENCE BETWEEN A WRONG CLAIM MADE BY AN ASSESSEE AFTER DISCLOSING A LL THE TRUE AND MATERIAL FACTS AND A WRONG CLAIM MADE BY THE ASSESSEE BY WI THHOLDING THE MATERIAL FACTS FULLY AND TRULY. IT IS ONLY IN THE L ATTER CASE THAT THE ASSESSING OFFICER WOULD BE ENTITLED TO PROCEED UNDE R SECTION 147. HELD, ALLOWING THE PETITION, THAT THE ASSESSING OFF ICER HAD NOT RECORDED THE FAILURE ON THE PART OF THE PETITIONER TO FULLY AND TRULY DISCLOSE ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT YEAR 19 97-98. WHAT WAS RECORDED WAS THAT THE PETITIONER HAD WRONGLY CLAIME D CERTAIN DEDUCTIONS WHICH HE WAS NOT ENTITLED TO. THE REASSE SSMENT PROCEEDINGS INITIATED IN THE YEAR 2004 WERE NOT VALID. 14. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE ABOVE JUDICIAL PRONOUNCEMENTS, IT IS CLEAR THAT ASS ESSING OFFICER HAS REOPENED THIS ASSESSMENT MERELY ON THE BASIS OF CHANGE OF OPINION AND BY RECORDING INCORRECT FAC TS IN THE REASONS FOR RE-OPENING OF THE ASSESSMENT. THE ASSESSEE IN THE ORIGINAL RETURN OF INCOME IN STATEM ENT OF 11 INCOME HAS DISCLOSED ALL THE COMPLETE FACTS WITH RE GARD TO ACQUISITION OF THE PROPERTY IN QUESTION AND CLAIM M ADE UNDER SECTION 10(37) OF THE ACT. WHEN THE ASSESSIN G OFFICER ISSUED A QUERY LETTER TO THE ASSESSEE TO GI VE THE COMPLETE DETAILS WITH REGARD TO TRANSACTIONS OF RS. 81,64,782/-, ASSESSEE DISCLOSE ALL MATERIAL AND COM PLETE FACTS BEFORE ASSESSING OFFICER AT THE ORIGINAL ASSE SSMENT STAGE WITH REGARD TO CLAIM MADE UNDER SECTION 10(37 ) OF THE ACT. THE ASSESSING OFFICER, ON THE BASIS OF TH E QUERY LETTERS ISSUED TO THE ASSESSEE, REPLY FILED BY ASSE SSEE AND MATERIAL ON RECORD ACCEPTED THE CLAIM OF ASSESSEE O F EXEMPTION UNDER SECTION 10(37) OF THE ACT IN THE OR IGINAL ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT DA TED 27.11.2009. THUS, THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL THE FACTS AT THE ORIGINAL ASSESSMENT STAGE. THE ASSESSEE HAS DISCLOSED ALL T HE PRIMARY FACTS BEFORE ASSESSING OFFICER IN ORIGINAL ASSESSMENT PROCEEDINGS FOR CLAIMING DEDUCTION UNDER SECTION 10(37) OF THE ACT. THE ASSESSING OFFICER I N THE REASONS FOR RE-OPENING OF THE ASSESSMENT HAS NOTED THAT THE CLAIM OF ASSESSEE UNDER SECTION 10(37) HAS BEEN ACCEPTED BY THE THEN ASSESSING OFFICER. ACTION OF T HE ASSESSING OFFICER IS NOT CORRECT. THE SUBSEQUENT ASSESSING OFFICER IS NOT SITTING IN APPEAL AGAINST THE ORIGINAL ASSESSMENT ORDER PASSED BY THE ASSESSING O FFICER, THEREFORE, HE HAS NO AUTHORITY TO COMMENT UPON THE QUASI JUDICIAL ORDER PASSED BY THE ASSESSING OFFICER IN T HE ORIGINAL ASSESSMENT PROCEEDINGS. FURTHER, ASSESSIN G 12 OFFICER HAS NO AUTHORITY TO SAY THAT EARLIER ASSESS ING OFFICER HAS FAILED TO ASSESS THE LONG TERM CAPITAL GAIN IN THIS CASE BECAUSE THE LAND IN QUESTION WAS SITUATED WITHIN THE JURISDICTION OF MUNICIPAL COMMITTEE AND THE LAN D IS A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14) A ND 10(37) OF THE ACT. SECTION 10(37) OF THE ACT READS AS UNDER : 10 (37) IN THE CASE OF AN ASSESSEE, BEING AN INDIVIDUA L OR A HINDU UNDIVIDED FAMILY, ANY INCOME CHARGEABLE UNDER THE H EAD 'CAPITAL GAINS' ARISING FROM THE TRANSFER OF AGRICULTURAL LA ND, WHERE (I) SUCH LAND IS SITUATE IN ANY AREA REFERRED TO IN ITEM (A) OR ITEM (B) OF SUB-CLAUSE (III) OF CLAUSE (14) OF SECTION 2 ; (II) SUCH LAND, DURING THE PERIOD OF TWO YEARS IMM EDIATELY PRECEDING THE DATE OF TRANSFER, WAS BEING USED FOR AGRICULTURAL PURPOSES BY SUCH HINDU UNDIVIDED FAMILY OR INDIVIDU AL OR A PARENT OF HIS; (III) SUCH TRANSFER IS BY WAY OF COMPULSORY ACQUIS ITION UNDER ANY LAW, OR A TRANSFER THE CONSIDERATION FOR WHICH IS D ETERMINED OR APPROVED BY THE CENTRAL GOVERNMENT OR THE RESERVE BANK OF INDIA; (IV) SUCH INCOME HAS ARISEN FROM THE COMPENSATION OR CONSIDERATION FOR SUCH TRANSFER RECEIVED BY SUCH AS SESSEE ON OR AFTER THE 1ST DAY OF APRIL, 2004. EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE, THE E XPRESSION 'COMPENSATION OR CONSIDERATION' INCLUDES THE COMPEN SATION OR CONSIDERATION ENHANCED OR FURTHER ENHANCED BY ANY C OURT, TRIBUNAL OR OTHER AUTHORITY; 15. IN THE ABOVE PROVISION, THE LAND WHICH IS PRESC RIBED IN ITEM (A) AND ITEM (B) OF SUB-CLAUSE (III) OF SEC TION 2(14) IS CONSIDERED FOR EXEMPTION WHICH IS LAND SITUATED WITHIN THE JURISDICTION OF MUNICIPALITY OR WAS WITHIN THE 8 KMS., FROM THE LOCAL LIMITS OF THE MUNICIPALITY ETC. THU S, LD. COUNSEL FOR THE ASSESSEE HAS RIGHTLY CONTENDED THAT THE PROVISIONS OF SECTION 10(37) OF THE ACT APPLY TO CA PITAL 13 ASSETS FALLING WITHIN THE URBAN AREA. IT APPEARS T HAT ASSESSING OFFICER WHILE RECORDING THE REASONS FOR R E- OPENING OF THE ASSESSMENT HAS COMPLETELY MISUNDERST OOD THE PROVISIONS OF SECTION 10(37) OF THE ACT. OTHER WISE ALSO, IT IS WELL SETTLED LAW THAT INTERPRETATION OF A PARTICULAR PROVISION OF LAW IS HIGHLY DEBATABLE AND ONCE THE ASSESSING OFFICER HAS TAKEN ONE VIEW IN THE ORI GINAL ASSESSMENT PROCEEDINGS, IT IS NOT OPEN TO THE SUBSE QUENT ASSESSING OFFICER TO CHALLENGE THE FINDINGS OF THE ASSESSING OFFICER GIVEN IN THE ORIGINAL ASSESSMENT PROCEEDINGS, OTHERWISE THERE WOULD BE NO END OF LIT IGATION BETWEEN THE PARTIES. THE RULE OF FINALITY SHALL HA VE TO BE APPLIED IN SUCH SITUATION. THUS, THE ASSESSING OFF ICER HAS RECORDED WRONG REASONS FOR RE-OPENING OF THE ASSESS MENT AND THAT TOO WERE BEYOND THE POWERS OF THE SUBSEQUE NT ASSESSING OFFICER TO REOPEN THE ASSESSMENT. 16. CONSIDERING THE FACTS AND CIRCUMSTANCES IN THE LIGHT OF THE ABOVE DISCUSSION, IT IS CLEAR THAT THE ASSES SING OFFICER HAS REOPENED THE ASSESSMENT ON MERE CHANGE OF OPINION AND ON THE NON EXISTING REASONS. THUS, RE- OPENING OF THE ASSESSMENT IS WHOLLY UNJUSTIFIED IN THE MATTER. THE ASSESSING OFFICER WAS, THEREFORE, NOT JUSTIFIED IN RE-OPENING THE ASSESSMENT ON MERE CHANGE OF OPIN ION. WE, THEREFORE, DO NOT SUBSCRIBE TO THE VIEWS OF THE AUTHORITIES BELOW, CONSEQUENTLY WE SET ASIDE THE OR DERS OF THE AUTHORITIES BELOW AND QUASH THE RE-OPENING OF T HE ASSESSMENT UNDER SECTION 147/148 OF THE ACT. RESULTANTLY, ALL ADDITIONS MADE IN THE RE-ASSESSMEN T ORDER 14 WOULD STAND DELETED. SINCE, WE HAVE QUASHED RE-OPE NING OF THE ASSESSMENT, THEREFORE, THERE IS NO NEED TO D ECIDE THE APPEAL OF ASSESSMENT ON MERIT AS IT IS LEFT FOR ACADEMIC INTEREST ONLY. 17. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (RANO JAIN) (BHAVNES H SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22 ND SEPT,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH