Rajeshbhai Bhagwandas Patel Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad Quashes Reassessment for AY 2012–13 – Property Sale Pertained to Earlier Year; Additions under Section 50C & Capital Gains Deleted
Ahmedabad ITAT has annulled a reassessment framed under section 144 r.w.s. 147, holding that the property sale which formed the very basis of the reopening pertained to the previous year relevant to AY 2011–12 & not to the reassessment year.
Assessee, an individual, filed his return of income for AY 2012–13 declaring salary income of ₹3,50,777/-. AO received information that assessee had sold a property during FY 2011–12 for ₹8,00,000, while the stamp duty valuation was ₹10,04,081, & no capital gains were disclosed. On this basis, the assessment was reopened u/s 147, & notices were issued. Assessee did not respond to the notices & e AO completed the assessment ex parte u/s 144. Applying section 50C, AO treated the stamp duty value of ₹10,04,081 as full value of consideration, took cost of acquisition as nil & computed long-term capital gains of ₹10,04,081. Additionally, AO made an addition of ₹2,04,081 as difference between stamp duty value & stated sale price.
Assessee’s contended that the sale deed was executed on 18.08.2010, falling in FY 2010–11, relevant to AY 2011–12, not AY 2012–13. The entire sale proceeds were invested in purchase of a new residential house on 08.12.2010, making him eligible for exemption u/s 54F. AO’s action of reopening AY 2012–13 was without jurisdiction as the transaction did not pertain to that year.
