The main legal point established is that the AO cannot reopen the assessment on a change of opinion when the primary facts necessary for assessment are fully and truly disclosed.

JUDGMENT :

KAMAL KHATA, J.

1. This Petition under Article 226 challenges notice under section 148 of the Income-tax Act, 1961 (‘Act’) dated 19th March 2021 issued by Respondent No.1 proposing to reassess the income for the assessment year (‘AY’) 2015-16 and the order dated 16th March 2022, rejecting the objections raised by Petitioner to the proposed action of reopening.

2. The reasons for opening are as under:

“1. Brief details of the assessee-The assessee filed its return of income on 30.09.2015 for A.Y. 2015-16 declaring income at Rs. 11,59,34,180/- and the same was assessed u/s 143(3) on 19/12/2017 determining total income at Rs.12,07,27,060/-.

2. Brief details of information received by the AO- On perusal of assessment records it was observed that assessee sold office premises i.e., 302, 3rd Floor, building no.19, A-Wing, Pinnacle corporate Pane, BKC, Bandra East, Mumbai-400051 for a consideration of Rs.14,00,00,000/- on 02.05.2014. The assessee claimed to have purchased commercial premises i.e., 101, 1st Floor, Dev Plaza, Andheri (W), Mumbai-58 for a total consideration of Rs.23,29,19,898/- on 31.03.2015. It was contended that since neither the WDV of the block of assets “Building” become Nil/Negative and there were some assets in the said block, hence, there were no capital gain arising u/s 45 of the act.

However, it is noticed from the copy of agreement for sale dated 31.03.2015 for the purchase of office premises No. 101 at Dev Plaza that the agreement for sale was registered with the office of the Registrar only on 04.04.2015. Also, out of the total consideration of Rs. 22,05,00,000/- Only part payment was paid to the vendor of the property till the execution of the said agreement.

3. Analysis of information received- The assessee was only allowed permission to enter the said unit on specific request for carrying out. Fitments and refurbishing only. Hence, the said property was not in possession of the assessee as on 31.03.2015, which is also evident from para 2 and para 11 of the agreement. Since the assessee cannot claim that it has property as on 31.03.2015, the assessee cannot claim that it has completed part performance of the contract as stipulated under the provision of section 53A of the transfer of property act. It is also pertinent to mention here that, in response to notice u/s. 133(6) of the Act, Shri. Vijay Thakkar, the vendor of the impugned property, submitted that he had received Rs.20,50,00,000/- as an advance from the assessee and the property was sold in A.Y. 2016-17. Thus, the impugned transaction reached finality on 04.04.2015 and not as on 31.03.2015 as the same property could not be shown as an asset in the balance sheet of the vendor as well as the assessee as on 31.03.2015. Therefore, it is not correct on the part of the assessee to show the new property purchased in the balance sheet as on 31.03.2015. Since the property was not in the possession of the assessee as on 31.03.2015, in the assessment order the amount of profit on sale of the property should be taxed as Short-Term Capital Gain.

4. Basic of forming reason to believe and details of escapement of income- In view of the above specific information, I have reason to believe and am satisfied that amount of Rs. 4,65,87,479/- has escaped assessment in the hands of the assessee for A.Y. 2015-16. Therefore, assessment proceedings are required to be re-opened u/s 147 of the Income-tax Act, 1961 to bring the income escaping assessment to tax for the above said assessment year.

5. Applicability of the provisions of section 147/151 of the Fact of the case- The case of the assessee for A.Y. 2015-16 needs to be re-opened u/s 147 of the Income Tax Act, 1961 to bring to tax the escaped income. More than four years but not more than 6 years have lapsed from the end of assessment year under consideration. Hence, the good self is requested to kindly accord necessary approval in this case to issue notice u/s 148 for AY 2015-16.

6. Put up for kind perusal and app