ITAT quashed reassessment as it based on a change of opinion
ITAT quashed reassessment as it based on a change of opinion
Assessee's assessment was completed u/s 143(3) (of Income Tax Act, 1961) and income was determined at Rs.1,66,090. Subsequently, AO detected that assessee showed profit on development & sale of land for Rs.9,86,500. AO reopened assessment and assessed the amount as assessee's business income. CIT(A) confirmed AO's action. ITAT allowed assessee's apppeal, as reassessment was based on a change of opinion, and the amount in issue was not business profit but a capital asset.-501443
1. The assessee filed her return of income which was assessed by the AO u/s. 143(3) (of Income Tax Act, 1961) showing the total income of Rs.1,60,050/- and the return was assessed u/s. 143(3) (of Income Tax Act, 1961) on determining the total income of Rs.1,66,090/-. Subsequently, AO detected that the assessee showed profit on develop & sale of land at Mahish Bathan or Rs.9,86,500/-, which she had purchased land jointly with her husband in the year 1996 for a sum of Rs.1,17,000. It was not taken into a/c in the computation of income. Assessee had disclosed the capital gain of Rs lacs to the AO. AO held that omission to do so resulted in an under-assessment of income of Rs.9,86,500/-. Therefore, the amount was required to be added back with the total income. AO issued notice u/s. 148 (of Income Tax Act, 1961). AO after reopening the assessment assessed this consideration of Rs.10 lacs as business income of the assessee amounting to Rs.9,86,500.
2. CIT(A) confirmed the action of AO.
3. On appeal, the ITAT held as under:
4. We find that this is merely a change of opinion and nothing else and on merits also this is a capital asset and it cannot be treated as business profit treating the same as adventure in the nature of trade but this can be treated as LTCG or STCG, as the case may be, because this is a long term capital asset, thus the assessee has invested the sums in capital gain account scheme maintained with Bank of Maharastra. This fact is admitted by CIT(A) but he confirmed the addition. I am of the view that this is merely a change of opinion, which is not possible in term of law. Hon'ble Supreme Court in the case of CIT Vs. Kelvinator of India Ltd., (2010) 310 ITR 561 (SC), wherein newly substituted provision of section 147 (of Income Tax Act, 1961) with effect from 01.04.1989 is interpreted by observing, that section 147 (of Income Tax Act, 1961), as substituted w.e.f. 01.04.1989 does not postulates conferment of power upon the AO to initiate reassessment proceeding upon his mere change of opinion.
5. In view of the above, I find that and following the decision cited supra, I am of the opinion that the reassessment proceedings taken by AO and confirmed by CIT(A) is of no merit and hence, the orders of lower authorities are dismissed. Appeal of assessee is allowed.”
Case Reference- Smt Santi Sarkar Vs. Income-tax Officer
IN THE INCOME TAX APPELLATE TRIBUNAL "SMC" BENCH: KOLKATA [Before Shri Mahavir Singh, JM] I.T.A No.797/Kol/2015 Assessment Year: 2006-07
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