MAHESH KUMAR AGARWAL, Jaipur V. ITO, Jaipur

ITA 132/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2103 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 10-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S L CHANDEL CIT DHK
• Keywords: Reopening of assessment; Gift; Source of fund; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 244A; 54F; 142(1); 147; 148; 54; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 132/JP/16 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SHRI MAHESH KUMAR AGARWAL, PROP. M/S GOODWILL CONSTRUCTION CO., 2B-27, SURAJ NAGAR (W), AJMER ROAD, JAIPUR. CUKE VS. THE ITO, WARD-2(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO.: ABHPA3070C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRHDH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI S.L. CHANDEL (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 21/08/2017 ?KKS'K .KK DH R KJH[K @ DATE OF PRONOUNCEMENT: 23/08/2017. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A), JAIPUR DATED 02.12.2015 FOR A.Y. 2008-09 WHEREIN TH E ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT LEARNED CIT(APPEALS) HAS ERRED IN HOLDING T HAT THE ASSESSING OFFICER WAS JUSTIFIED IN REOPENING THE ASSESSMENT U /S 147 OF THE ACT. THE SAID FINDING IS ILLEGAL AND UNJUSTIFIED. 2. THAT THERE WAS NO JUSTIFICATION FOR INITIATING P ROCEEDINGS U/S 147 OF THE IT ACT IN THIS CASE. THE INITIATION OF PROCEEDI NG AND COMPLETION OF ASSESSMENT UNDER THE PROVISIONS OF SECTION 148 IS I LLEGAL AND UNJUSTIFIED. 3. THAT LEARNED CIT(APPEALS) HAS ERRED IN HOLDING T HAT ON EXAMINATION OF THE FACTS IT IS APPARENT THAT TRANSACTION OF PUR CHASE OF PROPERTY FROM M/S AIAL IS NOT BEYOND DOUBT. THE SAID FINDING IS I LLEGAL AND UNJUSTIFIED. ITA NO. 132/JP/16 SH. MAHESH KUMAR AGARWAL VS. ITO, JAIPUR 2 4. THAT LEARNED CIT(APPEALS) HAS ERRED IN HOLDING T HAT THAT ASSESSING OFFICER WAS JUSTIFIED IN REJECTING THE DEDUCTION CL AIMED BY THE APPELLANT U/S 54F OF THE IT ACT AND IT FAILED TO SATISFY THE NECESSARY INGREDIENTS REQUIRED FOR ALLOWING DEDUCTION U/S 54F OF THE ACT. THE SAID FINDING IS ILLEGAL AND UNJUSTIFIED. THE ASSESSEE WAS CLEARLY E NTITLED TO GET DEDUCTION U/S 54F OF THE ACT. 5. THAT LEARNED CIT(APPEALS) HAS ERRED IN CONFIRMIN G THE ACTION OF THE ASSESSING OFFICER IN CHARGING INTEREST U/S 234B, 23 4C AND 234D AND WITHDRAWING INTEREST GRANTED U/S 244A OF THE IT ACT . THE SAID FINDING IS ILLEGAL AND UNJUSTIFIED. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE APPEL LANT HAD FILED HIS RETURN OF INCOME ON 07.10.2008 DECLARING AN INCOME OF RS. 34, 00,610/-. THE ASSESSMENT WAS THEREAFTER COMPLETED U/S 143(3) OF T HE ACT VIDE ORDER DATED 13.12.2010 AND THE TOTAL INCOME WAS DETERMINED AT R S. 34,10,140/-. IN THE RETURN OF INCOME, THE APPELLANT HAD CLUBBED INCOME OF HIS MINOR DAUGHTER, WHO HAD EARNED LONG TERM CAPITAL GAINS FROM THE SAL E OF SHARES OF M/S SEMCO ELECTRIC PVT LTD, FOR A SALE CONSIDERATION OF RS. 9 0,19,429/-. OUT OF THE SALE PROCEEDS, A SUM OF RS. 50 LACS WAS SHOWN AS INVESTE D IN REC BONDS AND A SUM OF RS. 25,00,000/- WAS SHOWN AS INVESTED IN PUR CHASE OF HOUSE PROPERTY ON WHICH THE APPELLANT HAD CLAIMED EXEMPTION U/S 54 F OF THE ACT. IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT, THE ASSESSING OFFICER HAS ACKNOWLEDGED THE FACT THAT THE ASSESSEE HAS DISCLOSED LONG TERM CAPITAL GAINS ON SALE OF SHARES OF THE COMPANY M/S SEMCO ELECTRIC PVT LTD. HOWEVER, THE ASSESSMENT WAS COMPLETED WITHOUT MAKIN G ANY ADJUSTMENT/DISALLOWANCE IN RELATION TO SUCH LONG TE RM CAPITAL GAINS AND CLAIM OF DEDUCTION UNDER SECTION 54EC AND 54F OF THE ACT. SUBSEQUENTLY, A NOTICE U/S 148 WAS ISSUED TO THE ASSESSEE ON 21.03.2014 AN D THE REASONS FOR REOPENING RECORDED WERE AS FOLLOWS: ON PERUSAL OF THE RECORD IT REVEALED THAT THE ASSE SSEE HAS CLAIMED DEDUCTION U/S 54F OF RS. 24,83,898/- AS PER AGREEMENT DATED 0 1.08.2008 WITH ACE INDIA ITA NO. 132/JP/16 SH. MAHESH KUMAR AGARWAL VS. ITO, JAIPUR 3 ADOBES LTD, AJMER ROAD, JAIPUR, THE ASSESSEE PURCHA SED PLOT H-72 IN COLONY PLATINUM GREEN VILLAGE MAHELA, JHARNA, MAUJAMABAD D IST. JAIPUR FOR 25,00,000/- AND CLAIMED DEDUCTION U/S 54F OF RS. 24 ,83,898. THIS AGREEMENT DID NOT REFLECT THE COMPLETION OF HOUSE WITHIN THE PRESCRIBED LIMIT U/S 54F OF THE IT ACT, 1961. ASSESSEE FAILED TO FULFIL THE CON DITION AS PER SEC 54F, HENCE THE DEDUCTION U/S 54F OF RS. 24,83,898/- IS NOT ALL OWABLE. IN VIEW OF ABOVE, I HAVE REASON TO BELIEVE THAT THE INCOME TO THE EXTENT OF RS. 24,83,898/- ESCAPED ASSESSMENT WITHIN THE MEANI NG OF SEC 147 OF THE IT ACT, 1961 AND THIS IS A CASE FIT FOR ISSUE OF NOTIC E U/S 148 OF THE ACT 3. WE NOW REFER TO THE RELEVANT FINDINGS OF THE LD. CIT(A) WHICH ARE UNDER CHALLENGE BEFORE US. THE SAME ARE REPRODUCED AS UN DER:- 3.1.2 DETERMINATION (I) I HAVE CAREFULLY PERUSED THE SUBMISSIONS OF THE APPELLANT, THE ASSESSMENT ORDER, RE-ASSESSMENT ORDER AND THE MATER IAL PLACED ON RECORD. IT IS NOTED THAT IN THE ORIGINAL ASSESSMENT PROCEEDINGS, THE AO VIDE ITS LETTER DATED 19.04.2010 REQUIRED THE APPEL LANT TO FILE DETAILS OF LONG TERM CAPITAL GAINS OF RS. 33,83,145/- AND HE H AS NOT RAISED ANY QUERY REGARDING ITS CLAIM OF DEDUCTION U/S 54F OF T HE ACT. IT IS EVIDENT FROM THE LETTER DATED 03.09.2010 OF THE APPELLANT T O THE AO THAT IT HAD FILED RELEVANT EVIDENCE FOR PURCHASE OF HOUSE FROM ACE INDIA ABODE LTD., JAIPUR (AIAL) ON ITS OWN. HOWEVER, IT DOES NO T MEAN THAT THE AO HAS RAISED QUERIES ABOUT ITS CLAIM OF DEDUCTION U/S 54F OF THE ACT. THE APPELLANT HAS NOT PLACED ON RECORD ANY MATERIAL WHI CH MAY EVEN SUGGEST THAT IN THE ORIGINAL ASSESSMENT PROCEEDINGS , THE MATTER WAS ENQUIRED AND LOOKED INTO BY THE AO. EVEN IN THE ORI GINAL ASSESSMENT ORDER, THERE IS NO MURMUR ABOUT THE JUSTIFICATION O F DEDUCTION CLAIMED BY THE APPELLANT U/S 54F OF THE ACT. IN VIEW OF THE SE FACTS, IT IS, THEREFORE, HELD THAT THE AO HAS NOT FORMED ANY OPIN ION ABOUT THE CLAIM OF THE APPELLANT U/S 54F OF THE ACT IN THE ORIGINAL ASSESSMENT PROCEEDINGS AND THUS NO QUESTION OF CHANGE OF OPINI ON AS ALLEGED BY THE APPELLANT. ITA NO. 132/JP/16 SH. MAHESH KUMAR AGARWAL VS. ITO, JAIPUR 4 (II) IT WAS THE CONTENTION OF THE APPELLANT THAT IT S CASE WAS RESPOND AFTER 4 YEARS OF THE ASSESSMENT YEAR UNDER CONSIDER ATION, THEREFORE, IN VIEW OF THE PROVISO TO SECTION 147 OF THE ACT, THE INSTANT CASE UNDER CONSIDERATION COULD BE RESPOND BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MATERIAL F ACTS NECESSARY FOR ITS ASSESSMENT. IT WAS SUBMITTED THAT IT HAS DISCLOSED ALL MATERIAL FACTS TRULY AND FULLY WHICH WERE REQUIRED FOR ITS ASSESSM ENT AND IN THE REASONS TO BELIEVE FOR REOPENING THE CASE, THERE IS NO MENTION OF SUCH FAILURE ON THE PART OF THE APPELLANT. (III) I HAVE GONE THROUGH THE REASONS RECORDED BY T HE AO FOR REOPENING THE ASSESSMENT U/S 147 OF THE ACT AND OBSERVED THAT THOUGH AO HAS NOT SPECIFICALLY MENTIONED THAT THERE WAS FAILURE ON THE PART OF THE APPELLANT TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSMENT, HOWEVER, IT IS DISCERNIBLE FROM THE RE ASONS RECORDED BY THE AO THAT THERE WAS FAILURE ON THE PART OF THE AP PELLANT TO DISCLOSE ALL MATERIAL FACTS TRULY AND FULLY REQUIRED FOR ITS ASS ESSMENT AS AGREEMENT DATED 01.08.2008 WITH AIAL DID NOT REFLECT THE COMP LETION OF HOUSE WITHIN PRESCRIBED TIME U/S 54F AND THE APPELLANT DI D NOT FILE CERTIFICATE FROM APPROPRIATE AUTHORITY FOR COMPLETION OF THE H OUSE. MOREOVER, THE AO MENTIONED ASSESSEE FAILED TO FULFIL THE CONDITI ONS AS PER SECTION 54F AND HE HAD REASON TO BELIEVE THAT THE INCOME TO THE EXTENT OF 24,83,898/- ESCAPED ASSESSMENT WITHIN THE MEANING O F SECTION 147 OF THE IT ACT. IT MAY BE MENTIONED THAT PROVISO TO SE CTION 147 IS ALSO A PART OF SECTION 147 OF THE ACT. THEREFORE, IN VIEW OF THE ABOVE DISCUSSION, THIS CONTENTION OF THE APPELLANT HAS NO T WEIGHT AND DESERVES TO BE REJECTED. (IV) IT IS THEREFORE, HELD THAT AO WAS JUSTIFIED IN REOPENING ASSESSMENT U/S 147 OF THE ACT. HENCE, THIS GROUND OF APPEAL IS REJECTED. 4. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT FROM THE REASONS SO RECORDED, IT IS EVIDENTLY CLEAR THAT THE RE WAS NO NEW INFORMATION THAT CAME INTO THE POSSESSION OF THE LD. AO BASED O N WHICH IT COULD BE HELD THAT THE INCOME HAS ESCAPED ASSESSMENT. THE AGREEME NT WITH ACE INDIA ADOBES LTD., WHICH WAS ON THE FILE OF THE LD. AO, C LEARLY MENTIONED AT PAGE 4 THAT THE APPELLANT HAD PURCHASED THE SAID PLOT OF L AND OF LAND OF 391.2 SQ. YARDS, WITH 1050 SQ. FEET OF CONSTRUCTED AREA. THUS IT IS EMPHASIZED THAT, ITA NO. 132/JP/16 SH. MAHESH KUMAR AGARWAL VS. ITO, JAIPUR 5 DEDUCTION U/S 54F WAS CLAIMED FOR THE PURCHASE OF H OUSE PROPERTY AND NOT CONSTRUCTION AND THEREFORE THE BASIC REASON NARRATE D BY THE LD. AO, FOR REOPENING WAS ITSELF FORMED ON INCORRECT INTERPRETA TION OF ALREADY AVAILABLE AND CONSIDERED FACTS. THERE WAS NO NEED ON THE PART OF THE APPELLANT TO FILE ANY CERTIFICATE FROM APPROPRIATE AUTHORITY, TO CLAI M THE SAID DEDUCTION, AS THE PURCHASE AGREEMENT CLEARLY MENTIONED, THE INVESTMEN T MADE IN PURCHASE OF A HOUSE PROPERTY BY THE APPELLANT. 5. IT WAS FURTHER SUBMITTED THAT THE REOPENING WAS INITIATED AFTER FOUR YEARS OF THE END OF THE RELEVANT ASSESSMENT YEAR AN D THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) OF THE IT ACT, 1961. THUS THE CASE OF THE APPELLANT CLEARLY FALLS UNDER THE FIRST PROVISO OF SEC 147 OF THE ACT, WHICH PROVIDES THAT, NO RE-OPENING COULD BE MADE IN SUCH CASES UNLESS, A NY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN U/S 139 O R IN RESPONSE TO A NOTICE U/S 142(1) OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT Y EAR. 6. IT WAS FURTHER SUBMITTED THAT, REASON TO BELIE VE IS DIFFERENT FROM REASON TO SUSPECT OR FROM TO HAVE AN OPINION. I T HAS BEEN HELD CONSISTENTLY, THAT REASON TO BELIEVE CAN BE SAID TO EXIST ONLY WHEN THE ASSESSING OFFICER COMES INTO POSSESSION OR DISCOVE RS SOME MATERIAL, OR GETS A NEW INSIGHT SUBSEQUENT TO THE CONCLUSION OF THE ORIGINAL PROCEEDINGS. SOME INFORMATION/EVENT AFTER THE ORIGINAL ASSESSM ENT WOULD NORMALLY BE REQUIRED TO FORM A BELIEF THAT THE INCOME CHARGEABL E TO TAX HAS ESCAPED ASSESSMENT. SUCH MATERIAL OR INSIGHT MUST BE BONA-F IDE AND MUST BE CAPABLE OF LEADING TO THE FORMATION OF BONA-FIDE BELIEF 7. IT WAS FURTHER SUBMITTED THAT, IN REPLY TO THE QUERY LETTER DATED 19.04.2010 ISSUED BY THE AO, ALL THE MATERIAL FACTS AS REGARDS THE DEDUCTION U/S 54F, CLAIMED BY THE APPELLANT [I.E. COPY OF AGR EEMENT WITH ACE INDIA ITA NO. 132/JP/16 SH. MAHESH KUMAR AGARWAL VS. ITO, JAIPUR 6 ADOBES LTD] WAS FILED VIDE HIS LETTER DATED 03.09.2 010, AND THE SAME WAS ALREADY ON RECORDS OF THE LD. AO AS FILED DURING TH E ORIGINAL ASSESSMENT PROCEEDINGS. THE ASSESSMENT U/S 143(3) WAS THUS MAD E AFTER BEING SATISFIED WITH THE ELIGIBILITY OF THE CLAIM MADE BY THE APPEL LANT. IT IS PERTINENT TO MENTION HERE THAT, THE APPELLANT HAD REQUESTED FOR THE COPIES OF ORDER-SHEET OF THE ORIGINAL ASSESSMENT PROCEEDINGS FROM THE FIL E OF THE LD. AO, VIDE HIS LETTER DATED 29.08.2016, BUT THE SAME WERE NOT PROV IDED TILL DATE, FOR THE REASONS BEST KNOWN TO THE LD. AO. THERE WAS NO NEW FACT/INFORMATION BROUGHT ON RECORD BY THE LD. AO NOW FROM WHICH HE C OULD FORM A BELIEF THAT CERTAIN INCOME HAD ESCAPED ASSESSMENT, DUE TO THE F AILURE ON THE PART OF THE APPELLANT TO PRODUCE ANY DOCUMENT REGARDING THE CLA IM OF EXEMPTION U/S 54F OF THE ACT. THUS, THE FORMATION OF BELIEF HAD FLOWN FROM THE DOCUMENTS AND FACTS ALREADY AVAILABLE ON RECORDS OF THE LD. AO WH ICH WERE DULY DEALT WITH DURING THE ORIGINAL ASSESSMENT PROCEEDINGS, AND THE NOTICE ISSUED U/S 148 WAS ISSUED MERELY FOR A CHANGE OF OPINION OR FOR RE CONSIDERATION OF THE MATTER ALREADY DECIDED IN THE ORIGINAL ASSESSMENT PROCEEDI NGS. IT WAS SUBMITTED THAT IN LIGHT OF THE FACTS STATED ABOVE AND VARIOUS JUDI CIAL PRONOUNCEMENTS, NOTICE U/S 148 CANNOT BE ISSUED ON THE BASIS OF A MERE CHA NGE OF OPINION OR RECONSIDERING A MATTER. HENCE, AS PER THE PROVISO T O SECTION 147, REOPENING AFTER FOUR YEARS OF THE END OF THE RELEVANT ASSESSM ENT YEAR, IN A CASE WHERE ORIGINAL ASSESSMENT WAS MADE U/S 143(3) OF THE ACT, WHERE COMPLETE DETAILS WERE DULY AVAILABLE ON RECORDS, WAS INDEED UNJUST, BAD IN LAW, ILLEGAL AND LIABLE TO BE HELD SO, AND THE APPELLANT PRAYS THAT THE ASSESSMENT FRAMED IN CONSEQUENCE TO SUCH A NOTICE MAY KINDLY BE HELD VOI D AB INITIO AND THUS BE QUASHED/ANNULLED. 8. IN SUPPORT, THE LD AR PLACED RELIANCE ON THE FO LLOWING DECISIONS: A RAMAN & CO 67 ITR 11(SC): CIT VS. KELVINATOR INDIA LTD [320 ITR 561 SC] ACIT VS. ICICI SECURITIES PRIMARY DEALERSHIP [348 I TR 299 SC] ITA NO. 132/JP/16 SH. MAHESH KUMAR AGARWAL VS. ITO, JAIPUR 7 HINDUSTAN PETROLEUM CORPORATION LIMITED VS. DEPUTY COMMISSIONER OF INCOME TAX, (2010) 328 ITR 534 (BOM) JAI HOTELS CO. LIMITED VS. ASST. DIT, (2009) 24 DTR 37 (DEL): COMMISSIONER OF INCOME TAX VS. EICHER LIMITED, (200 7) 294 ITR 310 (DEL) CIT VS. USHA INTERNATIONAL LIMITED [2012] 25 TAXMAN N.COM 200 (DELHI) 9. THE LD DR IS HEARD WHO HAS VEHEMENTLY ARGUED THE MATTER AND RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 10. IN ORDER TO APPRECIATE THE CONTENTIONS OF THE LD AR, WE REFER TO THE NOTICE ISSUED BY THE AO SEEKING INFORMATION FROM TH E ASSESSEE VIDE ITS LETTER DATED 19.04.2010 IN THE COURSE OF ORIGINAL ASSESSME NT PROCEEDINGS U/S 143(3) OF THE ACT. IN THE SAID NOTICE, THE AO RAISED FOLL OWING SPECIFIC QUESTIONS TO THE TO THE ASSESSEE RELATING TO LONG TERM CAPITAL G AINS: 4. DETAILS OF INCOME FROM OTHER SOURCES DECLARED A T RS 125,184. 5. DETAILS IN RESPECT OF SHORT TERM CAPITAL GAIN DE CLARED AT RS (-) 21,42,498 ALONG WITH D-MAT ACCOUNT ALONG WITH COPY OF YOUR ACCOUNT IN THE BOOKS OF YOUR BROKER. 6. THE DETAILS OF LONG TERM CAPITAL GAIN DECLARED A T RS 33,83,145. 10. DETAILS IN RESPECT OF MINOR CHILD DECLARED AT R S 42,69,262 AND RS 12,56,381 RESPECTIVELY. 11. APPARENTLY, THE ABOVE NOTICE IS A SPECIFIC NOT ICE ISSUED BY THE AO AFTER GOING THROUGH VARIOUS SOURCES OF INCOME OFFERED BY THE ASSESSEE IN HIS RETURN OF INCOME AND THE COMPUTATION OF INCOME. IN THE CO MPUTATION OF INCOME WHICH IS AVAILABLE AT APB 42-45, IT IS NOTED THAT T HE ASSEESSEE HAS DISCLOSED INCOME FROM CAPITAL GAINS AT RS 33,83,145. THE SAID FIGURE OF CAPITAL GAINS HAS BEEN COMPUTED AFTER TAKING INTO CONSIDERATION SHORT TERM CAPITAL LOSS OF RS 21,42,498 AND LONG TERM CAPITAL GAINS IN THE HAN DS OF HIS MINOR SON OF RS 42,69,262 AND LONG TERM CAPITAL GAINS IN THE HANDS OF HIS MINOR DAUGHTER OF ITA NO. 132/JP/16 SH. MAHESH KUMAR AGARWAL VS. ITO, JAIPUR 8 RS 12,56,381. IT IS THIS LONG TERM CAPITAL GAINS O F RS 12,56,381 IN THE HANDS OF THE MINOR DAUGHTER WHEREIN THE ASSESSEE WHILE WO RKING OUT THE NET CAPITAL TAX LIABLE FOR TAXATION HAS SHOWN AND CLAIMED DEDUC TION OF RS 24,83,898 (OUT OF TOTAL INVESTMENT OF RS 25,00,000) UNDER SECTION 54F OF THE ACT. ALL THESE FIGURES OF SALE CONSIDERATION AND CLAIM OF DEDUCTIO N UNDER SECTION 54F ARE CLEARLY APPARENT ON THE FACE OF TAX COMPUTATION FIL ED BY THE ASSESSEE DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. 12. WE NOW REFER TO THE REPLY FILED BY THE ASSESSEE DATED 3.9.2010 IN RESPONSE TO AOS QUERY LETTER DATED 19.04.2010 FILE D DURING THE COURSE OF ORIGINAL PROCEEDINGS. IN ITS REPLY, THE ASSESSEE H AS INTER ALIA STATED AS UNDER: 6. THE DETAILS OF LONG TERM CAPITAL GAINS INCOME E ARNED BY THE ASSESSEE ARE AS UNDER:- A. BY THE ASSESSEE--- NIL B. BY THE MINOR SON NIKUNJ AGARWAL BEFORE ATTAINING MAJORITY RS. 42,69,262/- C. BY MINOR DAUGHTER ADITI AGARWAL RS. 12,56,381/- 7. DURING THE YEAR UNDER CONSIDERATION THE MINOR SO N AND DAUGHTER OF THE ASSESSEE HAS SOLD SHARES OF SEMCO ELECTRIC PVT. LTD . ON WHICH THEY HAVE EARNED LONG TERM CAPITAL GAIN. THESE SHARES WERE GI FTED BY THE GRAND MOTHER (NANI) OF THE CHILDREN. THESE SHARES ACQUIRED BY TH E GRAND MOTHER IN 1999- 2000 AT COST PRICE OF RS. 10/- PER SHARE BY WAY OF ALLOTMENT. WE ARE ENCLOSING HEREWITH CONFIRMATION OF THE GRAND MOTHER (NANI) SM T. SARLA MITTAL RESIDING AT A-66-B, YASHODA PATH, SHYAM NAGAR, JAIPUR. 8. THE ABOVE SHARES SO ACQUIRED BY GIFT WERE SOLD T HROUGH M/S DCP MERRILL LYNCH, MUMBAI FOR A SALE CONSIDERATION OF RS. 90,19 ,428/- EACH. COPY OF RELATED DOCUMENTS ARE ENCLOSED HEREWITH. 9. OUT OF THE ABOVE SALE CONSIDERATION NIKUNJ AGARW AL HAS INVESTED/PURCHASED HOUSE NO. 49, VIDHYUT NAGAR-C, VAISHALI NAGAR, JAIP UR FOR RS. 45 LACS. COPY OF AGREEMENT AND DETAILS OF PAYMENTS ARE ENCLOSED HERE WITH. ITA NO. 132/JP/16 SH. MAHESH KUMAR AGARWAL VS. ITO, JAIPUR 9 10. MISS ADITA AGARWAL HAS PURCHASED REC BOND FOR R S. 50 LACS AND ALSO INVESTED RS. 25 LACS FOR PURCHASE OF HOUSE FROM ACE INDIA ABODES LTD. AJMER ROAD, JAIPUR. COPY OF RELATED EVIDDNCES FOR ABOVE I NVESTMENT ARE ENCLOSED HEREWITH. 13. ON PERUSAL OF THE ABOVE REPLY DATED 3.9.2010 O F THE ASSESSEE WHICH IS IN RESPONSE TO SPECIFIC QUERIES RAISED BY THE AO, I T IS NOTED THAT AT POINT 10, THE ASSESSEE HAS STATED CLEARLY THAT MISS ADITA AGA RWAL HAS INVESTED RS. 25 LACS FOR PURCHASE OF HOUSE FROM ACE INDIA ABODES LT D. AJMER ROAD, JAIPUR AND COPY OF RELATED EVIDENCE FOR ABOVE INVESTMENT W AS ALSO SUBMITTED BEFORE THE AO. THIS IS THE SAME TRANSACTION IN RESPECT OF WHICH THE DEDUCTION UNDER SECTION 54F HAS BEEN CLAIMED WHILE WORKING OUT THE CAPITAL GAINS. IT IS THUS CLEAR THAT RELEVANT INFORMATION AND RELATED EVIDENC E IN SUPPORT THEREOF WAS SUBMITTED AND TAKEN ON RECORD BY THE AO DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. GIVEN THE FACT THAT THE SA ME WAS SUBMITTED IN RESPONSE TO THE SPECIFIC QUERY RAISED BY THE AO, WE ARE LEFT WITH NO OTHER VIEW BUT TO HOLD THAT THE SAME WAS DULY CONSIDERED BY THE AO DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. 14. IN LIGHT OF ABOVE DISCUSSIONS, WE ARE OF THE V IEW THAT IT IS CLEARLY A CASE OF CHANGE OF OPINION BY THE ASSESSING OFFICER WHERE HE HAS ALLOWED THE DEDUCTION UNDER SECTION 54F DURING THE COURSE OF OR IGINAL ASSESSMENT PROCEEDINGS AND ON THE SAME PIECES OF INFORMATION, HE HAS REINITIATED THE PROCEEDINGS BY ISSUANCE OF NOTICE U/S 148 OF THE AC T. FURTHER, WE DONOT SEE ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE RELEVANT PARTICULARS DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS AS WE HAVE NOTED ABOVE. IN THE RESULT, THE REOPENING OF ASSESSMENT PROCEEDINGS U/S 147 IS NOT JUSTIFIED. WE ACCORDINGLY ALLOW THE GROUND NO. 1 AND 2 WHICH A RE CONNECTED. 15. GIVEN THE FACT THE REASSESSMENT PROCEEDINGS HA VE BEEN SET-ASIDE, WE DONOT THINK IT WOULD BE RELEVANT TO EXAMINE OTHER G ROUNDS OF APPEAL RAISED BY THE ASSESSEE. HENCE, THE SAME ARE DISMISSED AS INF RUCTIOUS. ITA NO. 132/JP/16 SH. MAHESH KUMAR AGARWAL VS. ITO, JAIPUR 10 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISPOS ED OFF WITH ABOVE DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 23/08/2017. SD/- SD/- DQY HKKJR FOE FLAG ;KNO (KUL BHARAT) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 23/08/2017 SANTOSH VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT - SHRI MAHESH KUMAR AGARWAL, PROP. M/S GOODWILL CONSTRUCTION CO., 2B-27, SURAJ NA GAR (W), AJMER ROAD, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD-2(2), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, 6. XKMZ QKBZY@ GUARD FILE (ITA NO.132/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR.