Innovative Infrastructure Vs ITO (Gujarat High Court)
The Gujarat High Court examined the validity of a notice issued under Section 148 of the Income-tax Act, 1961 for Assessment Year 2021-22, whereby the Assessing Officer sought to reopen the petitioner’s assessment on the allegation that the petitioner had paid unaccounted “on-money” while purchasing land.
The reassessment was based entirely on an entry dated 10.03.2019 found in an inquiry register seized during a search conducted under Section 132 at the premises of a real estate broker. The seized register contained details of various lands available for sale, including survey numbers, area and asking rates. On the strength of this entry, the Assessing Officer concluded that the petitioner had paid on-money over and above the consideration recorded in the registered sale deed executed on 26.02.2021, and issued a notice under Section 148 after obtaining approval under Section 151.
The petitioner challenged the notice, contending that the seized entry predated the actual land purchase by nearly twenty-three months and merely reflected market inquiries relating to land available for sale rather than any concluded transaction. The petitioner also pointed out that the register referred to a cluster of survey numbers covering approximately 28,000 square yards, whereas the petitioner had purchased only Survey No. 756/1+2 measuring 5,860 square yards. Further, the register contained the name “Bro. Manish Bopal,” who had no connection with the petitioner, and neither the seized register nor the broker’s statement mentioned the petitioner or the sellers.
