Case Law Details

Case Name : DCIT Vs M/s. Sri Balasubramania Mills Ltd. (ITAT Chennai)
Appeal Number : ITA No. 1397/MDs/2015
Date of Judgement/Order : 28/05/2015
Related Assessment Year :
Courts : All ITAT (5332) ITAT Chennai (233)
Brief of the Case:  ITAT Chennai held in the case of DCIT vs M/s. Sri Balasubramania Mills Ltd. that the section 148 could only be invoked whenever there is a failure on the side of Assessee to furnish all the necessary details. But, in this case the details were furnished as relevant sale deed was available with the AO and invocation of section 148 after 4 years without any tangible material can’t be accepted.

Facts of the Case:  The facts of the case are that the assessee is a public limited company which declared long term capital gain at Rs. 1,30,64,224/- as against the market value as per Registering Authority at Rs. 1,91,19,000/-. The AO reopened the assessment and computed the capital gain by adopting the registration value of the property and made an addition of Rs. 56,58,180/-. The Ld. CIT(A) quashed the order of the Assessing Officer u/s.147 of the Act as bad in law by observing that the re-assessment was made only on change of opinion and no tangible material was available with the Assessing Officer to reopen the assessment.

Contention of the Revenue:  According to the Revenue, section 50 C was not applied by the AO while computing capital gains and therefore, reopening is essential.

Contention of the Assessee:  The ld. Counsel for the Assessee relied on the orders of ld. CIT(A).

Held by ITAT:  The Hon’ble Tribunal discussed the factual part of the case and observed that the sale deed was available with the AO at the time of completion of the Assessment proceedings. The AO has while calculating capital gains have not considered the provisions of section 50C. It was observed that there was no tangible evidence available with the AO to invoke section 147 after 4 years. Also, it was observed by the Tribunal that the AO does not have the power to review but to re-assess. Further, it was observed that there was no failure on the part of the assessee to make a return u/s 139 or to make a response u/s 142(1) or u/s 148.

Finally, it was concluded that there proceedings u/s 148 was bad in law.

Accordingly, the appeals of the Revenue was dismissed.

Download Judgment/Order

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Category : Income Tax (27935)
Type : Judiciary (12118)

0 responses to “Section 148 could not be invoked in absence of any Tangible Material”

  1. shivram says:

    Hi bala, the order says that the fate of invoking sec 50 C u/s-154, is not known. Has the revenue dropped and proceeded U/S-147?

  2. Sridhar says:

    Hey Balu, I know that your argument and presentation will render justice. Good case. Congrats.

  3. jayashri.CA says:

    Good argument and nice order. Precedent for all reopening cases by virtue of Sec 50C.

  4. Krishnan says:

    The Assessee’s Counsel has made a clear-cut submission before Ld.CIT, during the course of the Appeal and Hon’ITAT has considered the order of Ld.CIT in detail. Very nice case for Sec 50C read with section 147. Good argument.

  5. sounderrajan says:

    speaking order by ITAT chennai. Beneficial to those who are really aggrieved.

  6. pcjain says:

    yah kesa majak kiya hai-CBDT authorities,
    democrtic country ko dictator ship country bana diya hain
    date nahin badani thi to nahin badate,
    apni galtiyan chhupane ke liye assessee ka gala ghont diya hai

    kya heh sahi hai???????

    aap bhi sahi raho aur assessee ko bhi date badane ka mauka bhavishya main na do

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