Late G Somaiah, Represented by G Raghava (Son), Hyderabad, Hyderabad V. ITO,Ward-13(2), Hyderabad, Hyderabad

ITA 1160/HYD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2697 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 14-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO SHRI L RAMJI RAO
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Audit objection; Period of limitation; Cost of acquisition; Fair market value; Difference of opinion; Valuation report; Onus to prove; Time period of passing order; Change of opinion
• Section: 143(3); 50C; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1160/HYD/2015 ASSESSMENT YEAR: 2009-10 LATE G. SOMAIAH, REP. BY G. RAGHAVA, HYDERABAD. PAN AFGPG 6424B VS. INCOME-TAX OFFICER, WARD 13(2), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. RAMA RAO REVENUE BY : SHRI L. RAMJI RAO DATE OF HEARING : 24-07-2017 DATE OF PRONOUNCEMENT : 09-08-2017 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS IS AN APPEAL OF THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(A) - 4, HYDE RABAD, DATED 17/07/2015 FOR AY 2009-10. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FILED RETURN OF INCOME FOR THE AY 2009-10 ON 03/07/2009 DECLARING I NCOME OF RS. 4,65,350/-. IN THIS CASE ASSESSMENT WAS COMPLETED U /S 143(3) ON 28/12/2011 ASSESSING LONG TERM CAPITAL GAIN AND INT EREST INCOME WITH A TOTAL INCOME OF RS. 12,75,494/-. LATER, THE AO ON VERIFICATION OF THE RECORDS, OBSERVED THAT IN THE ASSESSMENT ORDER WHIL E CALCULATING LONG TERM CAPITAL GAINS, THE SALE CONSIDERATION ADOPTED BY HIS PREDECESSOR/AO IS FAR BELOW THE MARKET VALUE ADOPTE D BY THE SRO I.E. RS. 88,45,500/- AS PER AGREEMENT OF SALE CUM G ENERAL POWER 2 ITA NO. 1160/H/15 LATE G. SOMAIAH, REP. BY G. RAGHAVA ATTORNEY DATED 08/08/2008 WHICH ATTRACTS THE PROVIS IONS OF SECTION 50C OF THE IT ACT. THEREFORE, THE AO BY ISSUING NOT ICE U/S 148 COMPLETED THE ASSESSMENT U/S 143(3) R.W.S 147 ON 31 /12/2013 BY ASSESSING INCOME UNDER LONG TERM CAPITAL GAINS AT R S. 61,21,302/-. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE P REFERRED AN APPEAL BEFORE THE CIT(A) AND MADE ELABORATE SUBMISS IONS, WHICH WERE EXTRACTED BY THE CIT(A) IN HIS ORDER AT PAGES 3 TO 12, WHICH INCLUDES THE SUBMISSIONS IN COMPLIANCE TO THE COPY OF THE REMAND REPORT. 4. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AS WELL AS THE REMAND REPORT OF THE AO, DIRECTED TH E AO TO ADOPT THE FAIR MARKET VALUE AS PER THE VALUATION REPORT AS ST ATED IN REMAND REPORT AND ALLOW 15% SUPERVISION CHARGES AND REWORK THE AMOUNT OF LONG TERM CAPITAL GAIN, BY OBSERVING AS UNDER: 4. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, ASSESSMENT ORDER AND WRITTEN SUBMISSIONS FILED BY T HE ASSESSEE. 5. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER MA INLY OBSERVED AS UNDER: 'THE ONUS TO PROVE THE FACT THAT THE FAIR MARKET VA LUE IS LESS THAN THE STAMP DUTY VALUATION SHIFTS TO ASSESSEE. A S LONG AS THE ASSESSEE CAN REASONABLY DISCHARGE THIS ONUS, TH E CONSIDERATION ADOPTED BY THE ASSESSEE IS TO BE ADOP TED. IN THE PRESENT CASE OF THE ASSESSEE, THE ASSESSEE ACCEPTED THE VALUATION DETERMINED BY THE STAMP VALUATION AUTHORI TY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY FOR REGISTRATION O F THE DEED. THE ASSESSEE HAS NOT FILED ANY OBJECTIONS FOR PAYIN G STAMP DUTY ON THE VALUATION AS PER DEED AT HIGHER VALUATI ON'. 6. THEREBY, THE AO ISSUED NOTICE U/S 148 AND COMPLE TED THE ASSESSMENT U/S 143(3) RWS 147 BY ADOPTING THE SRO V ALUE AND WORKED OUT THE LONG TERM CAPITAL GAINS AT RS.61,21, 302/-. THE THEN CIT(A) DIRECTED THE ASSESSING OFFICER TO REFER THE MATTER TO THE VALUATION CELL TO FIND OUT THE MARKET VALUE OF THE PROPERTY AS ON 08-08-2008. ACCORDINGLY, THE MATTER WAS REFERRED TO THE VALUATION CELL AND THE VALUATION REPORT DATED 09-03 -2015 WAS OBTAINED. AS PER THE VALUATION REPORT, THE VALUATIO N OFFICER 3 ITA NO. 1160/H/15 LATE G. SOMAIAH, REP. BY G. RAGHAVA ADOPTED THE FAIR MARKET VALUE AS RS 71,13,000/-. AS PER THE REMAND REPORT DATED 18-03-2015 SUBMITTED BY THE ASS ESSING OFFICER, THE AO REWORKED THE CAPITAL GAINS AT RS. 4 3,88,802/- BY ADOPTING THE FAIR MARKET VALUE AS RS. 71,13,000/- A S PER THE VALUATION REPORT. THIS REMAND REPORT WAS FORWARDED TO THE ASSESSEE AND THE ASSESSEE SUBMITTED THAT THE VALUAT ION CELL IS NOT JUSTIFIED IN FIXING THE VALUE AT RS. 71,13,000/ - WHICH IS VERY HIGH FOR THE FOLLOWING REASONS. 'A COPY OF THE PLAN OF THE BUILDING IS ANNEXED TO T HE SALE DOCUMENT FROM WHICH IT CAN BE SEEN THAT THE SAID PR OPERTY HAS SEVERAL DISADVANTAGES. THE MAIN ROAD IS 20' WIDTH A ND, THEREFORE, FOUR WHEELERS CAN NOT MOVE IN THE LANE. THE PLAN ANNEXED TO THE AGREEMENT OF SALE CUM GENERAL POWER OF ATTORNEY GIVES CLEARLY AN INDICATION THAT THE FRONT ROAD IS ONLY OF 20' WIDTH AND IT IS NOT POSSIBLE FOR VEHICLES TO EN TER THE ROAD. EVEN THE APPROACH ROAD IS ONLY OF25' WIDTH. IT IS A LSO TOO SMALL. IT CAN BE SEEN THAT THE WIDTH IN THE NORTHERN SIDE OF THE BUILDING IS 14' WHEREAS THE SOUTHERN PORTION IS 48 WIDTH. T HIS IS AGAINST VASTU. FURTHER, FROM THE PLAN IT CAN BE SEEN THAT T HE SOUTH MOST PART WAS 48 AND IT IS REDUCED TO 27 IN THE MIDDLE AND 14' TOWARDS EXTREME NORTHERN. THEREFORE, THE ENTIRE ARE A TOWARDS NORTH WAS CUT OFF. THIS IS AGAINST VASTU. THERE ARE ROOMS SEPARATELY CONSTRUCTED WITH 10'X10' NOT CONNECTED W ITH THE MAIN BUILDING. THEY ARE NOT MUCH OF USE. THERE ARE ONLY TWO SMALL BATH ROOMS FOR EACH FLOOR. THEREFORE, THE NORMAL MA RKET PRICE CAN NOT BE MADE APPLICABLE. IT IS ALSO SUBMITTED TH AT THE MUNICIPALITY IS COLLECTING A TAX OF RS. 2030/- PER YEAR. THIS WOULD CLEARLY INDICATE THAT THE RENTAL VALUE OF THE BUILDING IS NOT MORE THAN RS. 15,000/- AND BY APPLYING THE RENT CAP ITALIZATION METHOD, THE MARKET VALUE OF THE BUILDING WOULD BE M UCH LOWER'. 7. AFTER CONSIDERING THE REMAND REPORT AND ASSESSEE 'S SUBMISSIONS, THE ASSESSING OFFICER IS DIRECTED TO A DOPT THE FAIR MARKET VALUE AS PER THE VALUATION REPORT AS STATED IN REMAND REPORT AND ALLOW 15% SUPERVISION CHARGES AND REWORK THE AMOUNT OF LONG TERM CAPITAL GAIN. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) IS ERRONEOUS TO THE EXTENT IT IS PREJUDIC IAL TO THE ASSESSEE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN I NITIATING THE PROCEEDINGS U/S 147 OF THE I.T. ACT. THE LEARNED CO MMISSIONER 4 ITA NO. 1160/H/15 LATE G. SOMAIAH, REP. BY G. RAGHAVA OF INCOME-TAX (APPEALS) OUGHT TO HAVE SEEN THAT THE RE- ASSESSMENT IS NOT VALID. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN A PPLYING THE PROVISIONS OF SEC. 5OC OF THE I.T. ACT. 4. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN DETERMINING THE SALE CONSIDERATION FOR THE PURPOSE OF DETERMINATION OF THE CAPITAL GAIN AT RS.60,46,050/- 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE SEEN THAT THE MARKET VALUE BE DETERMINED BY AD OPTING THE RENT CAPITALIZATION METHOD FOR THE PURPOSE OF SEC. 5OC OF THE I.T. ACT. 6. WITH REGARD TO THE APPLICATION OF THE PROVISIONS OF SECTION 147, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE RETUR N OF INCOME FOR THE AY 2009-10 WAS SUBMITTED BY THE ASSESSEE ON 30/07/2 009 ADMITTING AN INCOME OF RS. 4,65,350/- AND THE SAID RETURN WAS INITIALLY PROCESSED U/S 143(1) OF THE ACT. IT IS SUBMITTED TH AT T HE ASSESSING OFFICER ISSUED NOTICE U/S 143(2) OF THE I.T. ACT ON 04.07.2011 AND THE ASSESSEE FILED ALL THE DETAILS CONNECTED WITH THE A SSESSMENT. IT IS SUBMITTED THAT THE ASSESSEE SOLD THE HOUSE FOR A CO NSIDERATION OF RS.35 LAKHS ON 08.08.2008 AND ALSO WORKED OUT THE C APITAL GAINS. THE ASSESSING OFFICER, WHILE COMPLETING THE ASSESSMENT U/S 143(3) OF THE I.T. ACT ON 28.12.2011 MADE THE FOLLOWING COMPUTATI ON OF THE CAPITAL GAINS: CAPITAL GAIN CALCULATION AMOUNT (RS.) SALE CONSIDERATION 35,00,000 LESS: COST OF ACQUISITION 1) LAND (DATE OF PURCHASE 29.10.1983) RS.30,000 X 582/116 OF 186 SQ.YDS. OUT OF 266 SQ.YDS. 1,50,517 2) COST OF IMPROVEMENT CONSTRUCTION BUILDING IN DIFFERENT STAGES: A. 1310 SFT.XRS.360/- PER SFT. X 582/389 IN THE YEAR 1999-2000 7,05,581 5 ITA NO. 1160/H/15 LATE G. SOMAIAH, REP. BY G. RAGHAVA B. 1645 SFT X RS.400 PER SFT X 582/406 IN THE YEAR 2000-01 9,43,241 C. 1645 SFT. X RS.400 SFT X 582/426 IN THE YEAR 2001- 02 8,98,958 26,98,297 LESS: COMMISSION PAID (RECEIPTS SUBMITTED) 70,000 LONG TERM CAPITAL GAIN. 7,31,703 6.1 IT IS SUBMITTED THAT THE SAID COMPUTATION IS AN NEXED AS ANNEXURE-I TO THE ASSESSMENT ORDER. IN THE SAID ASS ESSMENT ORDER, THE ASSESSING OFFICER REFERRED TO THE REPORT. THE A SSESSING OFFICER MENTIONED THAT THE WORKING OF THE CAPITAL GAINS WAS MADE BASED ON THE INSPECTION REPORT GIVEN BY THE DEPARTMENTAL APP ROVED PROPERTY VALUER AND BASED ON THE SALE DEED OF THE PROPERTY A ND THE MARKET PRICE AS ON THE DATE OF PURCHASE. IT IS SUBMITTED T HAT THIS INFORMATION MAKES IT CLEAR THAT THE ASSESSING OFFICER WAS HAVIN G WITH HIM A) THE SALE DOCUMENT; B) THE INSPECTION REPORT BY THE DEPARTMENTAL VALUER ; C) THE MARKET VALUE OF THE PROPERTY AS ON THE DATE OF PURCHASE; 6.2 LD. AR SUBMITTED THAT IT CLEARLY INDICATES THAT THE ASSESSING OFFICER APPLIED HIS MIND AND WORKED OUT THE CAPITAL GAIN AS PER THE COMPUTATION ANNEXED. HE SUBMITTED THAT THE ASSESSIN G OFFICER LATER INITIATED PROCEEDINGS BY ISSUE OF NOTICE U/S 148 ON 01.02.2013. IN THE SAID NOTICE, THE ASSESSING OFFICER MENTIONED THAT T HE NOTICE WAS BEING ISSUED WITH THE APPROVAL OF THE ADDL. CIT ICI T, HYDERABAD BUT DID NOT MENTION WHOSE APPROVAL WAS OBTAINED BY HIM. THE ASSESSING OFFICER IN THE RE-ASSESSMENT MADE U/S 143(3) RWS 14 7 AT PARA 2, PAGE 2 MENTIONED AS UNDER: 6 ITA NO. 1160/H/15 LATE G. SOMAIAH, REP. BY G. RAGHAVA 'HOWEVER, SUBSEQUENTLY IT WAS OBSERVED FROM THE 3RD PAGE OF THE 11 PAGES OF AGREEMENT OF SALE CUM GPA EXECUTED BY THE ASSESSEE DT.8.8.2008 VIDE NO. 1865/2008 OF SUB REGI STRAR, SANJEEVAREDDYNAGAR, THE MARKET VALUE OF THE SAID CA PITAL ASSET WAS OBSERVED AS RS. 88,45,500/ -. AS PER THE PROVIS IONS OF SEC. 5OC, THE MARKET VALUE IS TO BE ADOPTED FOR THE PURP OSE OF COMPUTING LONG TERM CAPITAL GAINS. 6.3 REFERRING TO THE ABOVE, THE LD. AR SUBMITTED TH AT IT CLEARLY SHOWS THAT THE ASSESSING OFFICER BASED HIS ASSESSME NT ONLY ON THE INFORMATION AVAILABLE ON RECORD AND NO FRESH INFORM ATION WAS BROUGHT ON RECORD. AT THE TIME OF REGULAR ASSESSMENT, THE A SSESSING OFFICER WAS IN POSSESSION OF THE SAME INFORMATION AND HE CO MPLETED THE ASSESSMENT WITHOUT APPLICATION OF THE PROVISIONS U/ S 5OC OF THE I.T. ACT. IT IS SUBMITTED THAT THE ASSESSING OFFICER, AT THE TIME OF COMPLETION OF REGULAR ASSESSMENT CAME TO THE CONCLU SION THAT THE SALE PRICE OF RS.35 LAKHS WAS THE REAL MARKET VALUE AS ON THE DATE OF SALE AND, THEREFORE, DID NOT APPLY THE PROVISIONS O F SEC. 5OC. SUBSEQUENTLY, THE ASSESSING OFFICER ENTERTAINED A D IFFERENCE OF OPINION AND ISSUED NOTICE U/S 148 OF THE I.T. ACT. THIS IS NOT LEGALLY VALID. FOR THIS PROPOSITION, HE RELIED ON THE DECIS ION OF THE AGRA BENCH OF THE HON'BLE ITAT IN THE CASE OF ITO VS. HARESH C HAND AGARWAL, HUF IN ITA NO.282/AGRA/2013 DATED 20.12.2013 WHEREI N IT IS HELD THAT THE PROVISIONS U/S 147 CAN NOT BE APPLIED FOR APPLY ING THE PROVISIONS U/S 5OC OF THE I.T. ACT. LD. AR, THEREFORE, SUBMITT ED THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN INITIATING PR OCEEDINGS U/S 147 OF THE I. T.ACT. 6.4 ON FACTS, LD. AR SUBMITTED THAT THE VALUATION C ELL REDUCED THE VALUE OF THE PROPERTY TO RS.71,13,000/- FROM RS.88, 45,500/-. IT IS SUBMITTED THAT THE VALUATION CELL IS NOT JUSTIFIED IN FIXING THE VALUE AT RS.71,13,000/- WHICH IS VERY HIGH FOR THE FOLLOWING REASONS: 6.5 A COPY OF THE PLAN OF THE BUILDING IS ANNEXED T O THE SALE DOCUMENT FROM WHICH IT CAN BE SEEN THAT THE SAID PR OPERTY HAS 7 ITA NO. 1160/H/15 LATE G. SOMAIAH, REP. BY G. RAGHAVA SEVERAL DISADVANTAGES. THE MAIN ROAD IS 20' WIDTH A ND, THEREFORE, FOUR WHEELERS CANNOT MOVE IN THE LANE. THE PLAN ANNEXED TO THE AGREEMENT OF SALE CUM GENERAL POWER OF ATTORNEY GIV ES CLEARLY AN INDICATION THAT THE FRONT ROAD IS ONLY OF 20' WIDTH AND IT IS NOT POSSIBLE FOR VEHICLES TO ENTER THE ROAD. EVEN THE APPROACH R OAD IS ONLY OF 25' WIDTH. IT IS ALSO TOO SMALL. IT CAN BE SEEN THAT TH E WIDTH IN THE NORTHERN SIDE OF THE BUILDING IS 14' WHEREAS THE SO UTHERN PORTION IS 48' WIDTH. THIS IS AGAINST VASTU. FURTHER, FROM THE PLAN IT CAN BE SEEN THAT THE SOUTH MOST PART WAS 48' AND IT IS REDUCED TO 27' IN THE MIDDLE AND 14' TOWARDS EXTREME NORTHERN. THEREFORE, THE EN TIRE AREA TOWARDS NORTH WAS CUT OFF. THIS IS AGAINST VASTU. THERE ARE ROOMS SEPARATELY CONSTRUCTED WITH 10'X10' NOT CONNECTED WITH THE MAI N BUILDING. THEY ARE NOT MUCH OF USE. THERE ARE ONLY TWO SMALL BATH ROOMS FOR EACH FLOOR. THEREFORE, THE NORMAL MARKET PRICE CANNOT BE MADE APPLICABLE. IT IS ALSO SUBMITTED THAT THE MUNICIPALITY IS COLLE CTING A TAX OF RS.2030/- PER YEAR. THIS WOULD CLEARLY INDICATE THA T THE RENTAL VALUE OF THE BUILDING IS NOT MORE THAN RS. 15,000/- AND BY APPLYING THE RENT CAPITALIZATION METHOD, THE MARKET VALUE OF THE BUIL DING WOULD BE MUCH LOWER. 6.6 WITHOUT PREJUDICE TO THE ABOVE SUBMISSIONS, THE LD. AR SUBMITTED THAT THE VALUATION BY THE VALUER IS ON TH E HIGHER SIDE AS THE VALUER TOOK INTO CONSIDERATION THE VALUES BASED ON CPWD RATES. THE AO ADOPTED THE PLINTH AREA METHOD AND APPLIED CPWD RATES. HE, THEREFORE, SUBMITTED THAT VARIOUS TRIBUNALS HELD TH AT THE VALUE FIXED HAS TO BE REDUCED BY 10% TOWARDS SELF SUPERVISION A ND 15% TOWARDS RATE DIFFERENCE AND THE SAME WAS NOT ALLOWED BY THE VALUATION CELL. 6.7 THE LD. AR RELIED ON THE FOLLOWING CASES: 1. M/S AMARSARIA CONSTRUCTIONS, HYD. VS. ITO, ITA N O. 868/H/2006, ORDER DATED 8 TH AUGUST, 2008. 8 ITA NO. 1160/H/15 LATE G. SOMAIAH, REP. BY G. RAGHAVA 2. ITO VS. SHRI HARESH CHAND AGARWAL, HUF, ITA NO. 282/AGRA/2013, ORDER DATED 20/12/2013. 7. LD. DR RELIED ON THE ORDER OF CIT(A) AND SUBMITT ED THAT IN ALL THE REOPENED CASES, AS PER THE PROVISION, FIRST CON DITION I.E. INCOME ESCAPED ASSESSMENT, HAS TO COME TO THE NOTICE OF AO WITHIN THE LIMITATION PERIOD OF 4 YEARS AND THE SECOND CONDITI ON WILL APPLY ONLY WHEN THE ASSESSMENT IS REOPENED AFTER EXPIRY OF FOU R YEARS. HE SUBMITTED THAT IN THE GIVEN CASE, THE CASE WAS REOP ENED WITHIN 4 YEARS AND THE AO HAS EXERCISED HIS POWER AND ASSESS MENT WAS REOPENED AS PER THE PROVISIONS OF LAW. HE FURTHER S UBMITTED THAT AO CAN INITIATE THE PROCEEDINGS WHEN HE NOTICES ESCAPE MENT OF INCOME, FOR WHICH, HE RELIED ON THE DECISION OF HONBLE SUP REME COURT IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS (P) L TD., [2007] 161 TAXMAN 316 (SC). 7.1 FURTHER, THE LD. DR SUBMITTED THAT THE EARLIER AO HAS NOT APPLIED THE PROVISIONS OF SECTION 50C, THOUGH THE M ISTAKE WAS APPARENT ON RECORD AND IT IS FACTUAL ISSUE. MOREOVE R, HE SUBMITTED THAT CIT(A) HAS ALREADY GIVEN SUBSTANTIAL RELIEF TO THE ASSESSEE. 8. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. WE HAVE NOTICED THAT ORIGINAL ASSESSMENT WAS COMPLETED BY AO U/S 143(3) BY RELYING ON THE VALUATION REPOR T OF DVO, WHICH THE AO HAS DECLARED WHILE COMPLETING THE ASSESSMENT AND CALCULATING THE INCOME UNDER THE HEAD CAPITAL GAINS. SUBSEQUENTLY , AO HAS REOPENED THE ASSESSMENT BY NOTICING THAT HIS PREDE CESSOR HAS NOT APPLIED THE PROVISIONS OF SECTION 50C OF THE ACT. F ROM THE RECORD, IT IS CLEAR THAT PREVIOUS AO HAS NOT APPLIED THE PROVISIO NS OF SECTION 50C BUT AT THE SAME TIME, HE HAS CALCULATED THE CAPITAL GAINS AFTER OBTAINING THE VALUATION FROM THE DVO, IT SHOWS THAT AO HAS APPLIED HIS MIND CONSCIOUSLY AND DID NOT APPLY THE PROVIS IONS OF SECTION 50C. IN OUR OPINION, WHEN THE EVIDENCE IS CLEARLY A VAILABLE ON RECORD 9 ITA NO. 1160/H/15 LATE G. SOMAIAH, REP. BY G. RAGHAVA FOR NOT APPLYING THE PROVISIONS OF SECTION 50C, THE PRESENT AO CANNOT APPLY THE PROVISIONS OF SECTION 50C TERMING IT AS M ISTAKE AND THERE IS ESCAPEMENT OF INCOME. IT AMOUNTS TO CHANGE OF OPINI ON. VARIOUS COURTS HAVE HELD THAT ASSESSMENT CANNOT BE REOPENED MERELY BY CHANGE OF OPINION. 8.1 COMING TO LD. DRS CONTENTION THAT AO CAN REOPE N WHEN THERE IS ESCAPEMENT OF INCOME BY RELYING ON THE CASE I.E. AC IT VS. RAJESH JHAVERI STOCK BROKERS LTD. (SUPRA), WHEREIN, THE C ASE WAS REOPENED WITH THE AUDIT OBJECTION ON THE ASSESSMENT U/S 143( 1), IT WAS A CASE IN WHICH ASSESSMENT WAS COMPLETED U/S 143(1) AND RE OPENED WITH THE FACTUAL FINDINGS BROUGHT OUT BY THE AUDIT PARTY, TH E HONBLE HIGH COURT HAS DISMISSED THE CASE BY REFERRING TO THE FACTS OF ADAM EXPORTS VS. DCIT [1999] 240 ITR 224 (GUJ.), AS PER WHICH THE RE OPENED ASSESSMENT WAS COMPLETED U/S 143(3). HONBLE SUPREM E COURT DISTINGUISHED THIS CASE AND ALLOWED SLP IN FAVOUR O F REVENUE. IN THE GIVEN CASE, THE FACTS ARE NOT SIMILAR TO THE CASE O F RAJESH JHAVERI (SUPRA) AND CANNOT BE APPLIED AS THE FACTS ARE COMP LETELY DIFFERENT. 8.2 THEREFORE, THE GROUND RAISED BY THE ASSESSEE RE LATING TO REOPENING OF ASSESSMENT IS ALLOWED AND OTHER GROUND S ARE NOT REQUIRED TO BE ADJUDICATED SINCE THE MAIN GROUND RE LATING TO REOPENING IS ADJUDICATED IN ASSESSEES FAVOUR. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON 9 TH AUGUST, 2017 SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RA HMAN) JUDICIAL MEMBER AC COUNTANT MEMBER HYDERABAD, DATED: 9 TH AUGUST, 2017. KV 10 ITA NO. 1160/H/15 LATE G. SOMAIAH, REP. BY G. RAGHAVA COPY TO:- 1) LATE G. SOMAIAH, REP. BY G. RAGHAVA, C/O SHRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, 3-6-6 43, STREET NO. 9, HIMAYAT NAGAR, HYDERABAD 500 029. 2) ITO, WARD 13(2), AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 3) CIT(A) - 4, HYDERABAD 4 CIT -4, KURNOOL. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE