Assessment order on issue other than reasons recorded for reopening is unsustainable

Bharat Singh Vs ITO (ITAT Delhi)

Assessment framed by the AO is on other issues which is not part of the reasons recorded for reopening the assessment. In such a situation, the assessment order is not sustainable in the eye of law.

Facts-

On the basis of the AIR information, it was noted that assessee had sold an immovable property of Rs.92,86,250/- on 14.02.2007. Accordingly, notice u/s 148 of the Act was issued on 21.03.2012 and served on the assessee. In response to the aforesaid notice, assessee filed his return of income declaring total income at Rs.2,18,477/- on 14.05.2012. Thereafter case was taken up for scrutiny and consequently assessment was framed u/s 143(3) r.w.s 147 of the Act by order dated 11.03.2013 and the total income was determined at Rs.65,18,480/-. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 23.03.2015 in Appeal No.118/2013-14 dismissed the appeal of the assessee. Aggrieved by the order of CIT(A), assessee is now before us.

Assessee mainly contended that the reasons that was recorded by the AO for reopening of the assessment was that assessee had sold an immovable property at Village Jonawas which is situated within 5 K.M. from the municipality’s limit of Rewari/Dharuhera Municipality and thus was covered in the definition of Capital Assets. He pointed that AO noted that since assessee had not disclosed the LTCG, AO was of the view that income had escaped assessment within the meaning of Section 147 of the Act. Learned AR thereafter pointed to the assessment order framed u/s 143(3) r.w.s 147 of the Act dated 11.03.2013 and submitted that no addition has been made by the AO on the issue of Long Term Capital Gain but AO has proceeded to make the addition of Rs.63,00,000/- u/s 68 of the Act. He therefore submitted that the addition has been made by the AO on the different ground then that was recorded in the reasons for reopening the assessment.

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