ACIT Vs Mazagon Dock Shipbuilders Ltd. (ITAT Mumbai)
AO’s Apprehension Not Evidence & No 50C on Leasehold Rights- Reassessment Based on Audit Note = Change of Opinion, Not Permissible; Revenue Fails in Rs. 318 Lakh Lease Transfer Dispute – ITAT Quashes 147 Action
Assessee, a 100% Government of India undertaking under the Ministry of Defence, had originally filed its return declaring income of Rs. 133.58 crore which was assessed u/s 143(3) at Rs. 136.25 crore. Subsequently, AO issued notice u/s 148 on 26.03.2012 alleging that capital gains from transfer of leasehold land to employee housing societies were understated, as section 50C required adoption of stamp duty value instead of Rs. 318 lakh disclosed by Assessee.
Assessee contended that all primary facts were fully disclosed in its audited accounts, particularly in para 34 of the notes, which were already before AO in the original assessment. Since no new material was brought on record, reopening was impermissible. It was further argued that section 50C does not apply to transfer of leasehold rights, which are distinct from sale of land or building.
CIT(A) agreed with Assessee, holding that the reopening was purely on account of change of opinion, relying on the Supreme Court ruling in Kelvinator of India Ltd. (320 ITR 561).
