The court emphasized that the reassessment proceedings must be based on tangible material to conclude that there is escapement of income from assessment, and that the absence of an agreement between the parties did not constitute a failure to disclose fully and truly, rendering the reassessment unsustainable.

JUDGMENT

Dhiraj Singh Thakur, J. - The Petitioner assessee challenges the notice under Section 148 of the Income Tax Act, 1961 ('the Act') dated 30th March, 2021, whereby seeking to reopen the assessment year 2015-16. The reasons for reopening as communicated to the Petitioner was an advance payment of Rs.17,76,08,505/- made to M/s Nancy Builders and Developers Pvt. Ltd., which according to the Assessing Offcer (A.O.), remain unexplained and, therefore, it was alleged that the Petitioner had failed to disclose fully and truly all material facts necessary for the reassessment.

2. Reasons as communicated to the Petitioner, briefy stated are as under:

'(2) Brief details of the information collected/received by the AO:

On the basis of material available on record it is seen that the assessee has disclosed payment of advance of Rs. 17,76,08,505/- to M/s Nancy Builders and Developers Pvt Ltd. The assessee had paid the said amount for acquiring development rights in a property which has been acquired by them from one M/s Goel Ganga Developers India Pvt Ltd. A MOU (Memorandum of Understanding) between Goel Ganga Developers Private Limited and Nancy Builders and Developers Private Limited was entered into on 09/09/2011. Further it is noticed that the assessee entered into a MOU on 05/04/2012 with M/s Nancy Builders and Developers to acquire the development rights acquired by them from M/s Goel Ganga Developers Private Limited.

Considering the above facts of the case, it is established that MOU is only a colourable device to transfer the money to M/s Nancy Builders as there is no agreement between the assessee and the original owner for transfer of the said development rights.

Therefore, such transaction is to be treated as unexplained investment u/s 69 and brought to taxation.

(3) Analysis of information collected/received:

On perusal of the records it is seen that the assessee has not entered into MOU to acquire the development rights directly with the original party i.e. M/s Goel Ganga Developers Private Limited, but with M/s Nancy Builders and Developers. There is not agreement between the assessee and the original owner for transfer of the development rights.

(4) Inquiries made by AO as a sequel to information collected/received:

On perusal of the records it is seen that the assessee has not entered into MOU to acquire the development rights directly with the original party i.e. M/s Goel Ganga Developers Private Limited, but with M/s Nancy Builders and Developers.

(5) Findings of the AO:

On perusal of the records it is noticed that M/s Goel Ganga Developers Private Limited, the original party was not a party of the MOU between M/s Nancy Builders and Developers Private Limited and M/s Konark Lifespaces. The original owner M/s Goel Ganga Developers Private Limited has not consented to the said transfer. Considering the above facts, it is established that the MOU is only a colourable device to transfer the money to M/s Nancy Builders. Further there is no agreement between the assessee and the original owner for transfer of the said development rights. Hence the transaction of Rs.17,76,08,505/- remains unexplained.

(6) Basis for forming reason to believe and details of escapement of income:

In view of the above facts and discussion made in above paras, I have reason to believe that the income chargeable to tax to the extent of Rs.17,76,08,505/- has escaped assessment for A.Y 2015-16 within the meaning and scope of section 147 of Income tax Act, 1961.

(7) Findings of the AO on true and full disclosure of the material facts necessary for assessment under Proviso to section 147:

The advance payment of Rs.17,76,08,505/- to M/s Nancy Builders and Developers Pvt. Ltd. remains unexplained. Thus, the assessee had not disclosed fully and truly all material facts necessary for its assessments.

(8) Applicability of provisions of section 147/151 to the facts of the case:

In this case return of income was fled for the year under consideration and regular assessment