Shri Bhupatbhai Popatbhai Siyani (HUF), RAJKOT-GUJARAT V. The Income Tax Officer, Ward-2 (3), RAJKOT-GUJARAT

ITA 43/RJT/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6637 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-03-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 29-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: MJ RANPURA
• Keywords: Reopening of assessment; Difference of opinion; Change of opinion
• Section: 54B

Judgement Text

: : IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI K. NAR ASIMHA CHA RY , JUDICIAL MEMBER ./ ITA NO . 4 3 /RJT/201 6 / ASSESSMENT YEAR : 20 0 6 - 07 BHUPATBHAI POPATBHAISIYANI(HUF) 2, GOVIND PARK, RAMESHNIVAS, GUNDAWADI MAIN ROAD, RAJKOT PAN : AA FHB9875D VS THE INCOME TAX OFFICER, WARD - 2(3), RAJKOT / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI M. J. RANPURA , C.A REVENUE BY : SHRI AVINASH KUMAR , D.R / DATE OF HEARING : 21 / 03/2017 / DATE OF PRONOUNCEMENT: 24/ 03/2017 / O R D E R PER SHRI S.V. MEHROTRA , ACCOUNTANT MEMBER : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT (A) - 2 , RAJKOT DATED 18.11.2015 FOR ASSESSMENT YEAR 200 6 - 07. 2. THE ASSESSEE HAS, INTER - ALIA, TAKEN A GROUND THAT LD.CIT(A) ERRED IN DISMISSING THE GROUND OF APPEAL RELATING TO REOPENING OF ASSESSMENT U/S.147 OF THE INCOME TAX ACT, 1961. 3. THE BRIEF FACTS O F THE CASE ARE THAT ASSESSEE HAD E - FILED ITS RETURN OF INCOME DECLARING NIL INCOME ON 31/03/2007 WHICH WAS PROCESSED U/S.143(1) ACCEPTING THE RETURN OF INCOME . THE CASE WAS RE - OPENED BY ISSUING NOTI CE U/S.148 DATED 08/03/2011. THE ASSESSMENT ORDER WAS PASSED U/S.143(3) R.W.S 147 OF THE ACT, DATED 24/11/2011. THE REOPENING WAS DONE PRIMARILY BECAUSE THE SALE VALUE OF THE PROPERTY HAD BEEN 2 ITA - 43/RJT/2016 BHUPATBHAI P. SIYANI (HUF) SHOWN AT RS.3,50,000/ - (1 / 6 TH SHARES) . HOWEVER, FOR STAMP DUTY PURPOSE S, T HE VALUATION WAS ADOPTED AT RS.6,07,033/ - (1/6 TH SHA RE). THUS, THERE WAS UNDERSTATMENT OF SALE PRICE OF THE PROPERTY TO THE EXTENT OF RS,2,57,033/ - . THE ASSESSEE IN ITS REPLY DATED 21/11/2011, INTER - ALIA, POINTED OUT AS UNDER: - THE ASSESSEE H AS CLAIM DEDUCTION AGAINST THE SALE FOR NEW PURCHASE OF AGRICULTURAL LAND HENCE THERE IS NOT LIABILITY TO PAY TAX AGAINST THE SALE OF PROPERTY. THE SAID PROPERTY WAS ANCESTRAL PROPERTY HENCE THIS TRAN SA CTION FALL INTO ASSESSEE S HUF ACCOUNT. WE HAVE ALSO S HOWN THIS TRANSACTION IN OUR RETURN FILED FOR A.Y. 2006 - 07 AND ALSO FOR RETURN FILED U/S.148 FOR A.Y.2006 - 07 . THE SAID PROPERTY WAS ANCESTRAL PROPERTY. THE SAID ASSESSEE IS NOT MAINTAINING THEIR BOOKS OF ACCOUNT. IN ITS FURTHER REPLY , THE ASSESSEE HAS CLARIFIED THAT IT HAD SOLD ANCESTRAL PROPE RTY IN THE CAPACITY OF HUF BUT BY MISTAKE QUOTED INDIVIDUAL PAN IN BOTH THE SALE OF PROPERTY AND NEW PURCHASE OF PROPERTY. 4. AFTER CONSIDERING THE ABOVE EXPLANATION , THE TOTAL INCOME WAS COMPUTED AT NIL, AFTER ALLOWING BENEFIT OF SECTION 54B. 5. ASSESSING O FFICER, AGAIN ISSUED NOTICE U/S.148 DATED 18/03/2013 FOR WITHDRAWING THE CLAIM UNDER SECTION 54B TO THE TUNE OF RS.5 , 03 , 085/ - THE ASSESSING OFFICER, INTER - ALIA, OBSERVED IN PARA 4 AS UNDER : - FU RTHER, VERIFICATION OF PURCHASE DEED REG. NO.3733/2055 DATED 13.05.2005 (CLAIMED EXEMPTION U/S 54B) ASSESSEE HAS PURCHASED A AGRICULTURE LAND IN THE CAPACITY OF INDIVIDUAL (PAN: AGRPS7805A), IN FACT HE IS THE ONLY PURCHASER WHICH IS CLEARLY REVELED FROM TH E PURCHASE DEED SUBMITTED IN SUPPORT OF DEDUCTION CLAIM U/S.54 - B OF THE ACT. HE DENIED DEDUCTION U/S.54B OBSERVING THAT ASSESSEE WAS NOT ENTITLED FOR DEDUCTION OF RS . 5 ,03,085/ - IN THE CAPACITY OF HUF . 6. FROM THE ABOVE SEQUENCE OF EVENTS , IT IS EVIDENT THAT SUBSEQUENT RE ASSESSMENT PROCEEDINGS HAVE BEEN INITIATED SOLELY ON THE BASIS OF 3 ITA - 43/RJT/2016 BHUPATBHAI P. SIYANI (HUF) CHANGE OF OPINION BECAUSE IN THE FIRST RE ASSESSMENT PROCEEDINGS , THE ASSESSEE HAD CLEARLY POINTED OUT THAT THERE WAS MISTAKE IN MENTIONING OF PAN NUMBER IN THE SALE AND PURCHASE DEED . T HAT COULD NOT CHANGE THE SUBSTA NCE OF TRANSACTION. S UBSEQUENT NOTICE BEING ISSUED SOLE L Y ON THE BASIS OF CHANGE OF OPINION, THE SAME IS BAD IN LAW AND ACCORDINGLY QUAS H ED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 2 4 T H MARCH, 2017. S D / - S D / - ( K. NAR ASIMHA CHA RY ) JUDICIAL MEMBER ( S.V. MEHROTRA ) ACCOUNTANT MEMBER R A J K O T , DATED 2 4 /03 /20 17 *MANISH / COPY OF ORDER FORWARDED TO: - 1 . / APPELLANT - 2 . / RESPONDENT - 3 . / CONCERNED CIT /DIT 4 . - / CIT (A) - IV, RAJKOT 5 . , , / DR, ITAT, RAJKOT 6 . / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) / ITAT, RAJKOT