Gagan Omprakash Navani Vs ITO (Bombay High Court)
The petition concerned assessment year 2016-17. The petitioner, an individual assessee, filed a return on 10.04.2017 declaring income of Rs.2,57,34,990/- after claiming exemption under Section 54 of the Income-tax Act, 1961 of Rs.51,57,29,543/-. The return was selected for scrutiny under CASS to examine the claim of exemption from long-term capital gains.
During the scrutiny proceedings, the Assessing Officer issued a notice under Section 142(1) dated 01.09.2018 seeking the statement of capital gains, exemption claimed and supporting evidence. The petitioner submitted the requested documents, including ITR statements, accounts, sale agreements and details relating to Rishi Gagan Trust. Further documents, including a capital gain and loss computation statement and an explanation concerning entitlement to Section 54 relief, were submitted subsequently. On 05.12.2018, another Section 142(1) notice sought details of immovable properties owned by the petitioner, which were also furnished.
The Assessing Officer passed an assessment order under Section 143(3) on 15.12.2018 accepting the returned income. The order specifically recorded that the scrutiny included examination of substantial deductions or exemptions, including under Section 54, and stated that the relevant details furnished by the petitioner had been verified and placed on record.
The petitioner subsequently received a Section 148 notice dated 11.03.2021 stating that income chargeable to tax had escaped assessment. The reasons supplied on 29.06.2021 concerned the petitioner’s sale of a residential property at Gulistan, Napeansea Road, and purchase of “Villa Orb” for Rs.56,18,30,000/-. Against long-term capital gains of Rs.53,25,95,542/-, the petitioner had claimed deduction under Section 54.
