IMPORTANT POINT
Reopening of assessments requires tangible evidence of income escapement; mere change of opinion based on previously disclosed facts is insufficient.

JUDGMENT :

Bhargav D. Karia, J.

1. Heard learned advocate Mr. Manish Shah for the petitioner and learned senior standing counsel Mr.Karan Sanghani for the respondent in both the petitions.

1.1 Rule, returnable forthwith. Learned advocate Mr. Karan Sanghani waives service of notice of Rule on behalf of the respondent in both the petitions.

1.2 Having regard to the controversy in narrow compass and with consent of the learned advocates appearing for the parties, the matters are taken up for final consideration.

2. These two petitions are arising out of reopening of assessment in case of sale of immovable property situated at Revenue Survey No.4/A, Block No.10/A, Moje Abrama, Taluka Kamrej, Surat (for short ‘the subject property’) on 06th February, 2012 by six co-owners.

2.1 The petitions, therefore, were heard together and are being disposed of by this common judgment and order.

2.2 For the sake of convenience, Special Civil Application No.22046 of 2019 is treated as a lead matter.

3. The brief facts of the case are as under.

3.1 The petitioners along with other co-owners executed sale deed for value of Rs.01,42,17,840/- of the subject property on 06th February, 2012. Stamp duty of Rs.18,44,750/- was paid and market value of the property in terms of the stamp duty comes to Rs.03,76,46,896/-.

3.2 Therefore, there is difference between sale consideration and the fair market value. Accordingly, provision of Section 50C of the Income Tax Act, 1961 (for short ‘the Act’) would apply in the hands of the petitioner.

3.3 The petitioner of Special Civil Application NO.22046 of 2019 filed return of income on 31st August, 2012 declaring total income of Rs.21,23,670/-. Capital gains declared by the petitioner on sale of three properties which includes the property situated at Village Abrama being Revenue Survey No.4A, 14 and 10-A.

3.4 The case of the petitioner was selected for scrutiny assessment and notice under Section 143(3) dated 12th August, 2013 was issued followed by notice under Section 142(1) of the Act dated 03rd April, 2014 asking the petitioner to furnish the information called for including copy of trading and P&L account along with balance-sheet, computation of income and audit report for the A.Y. 2011-12 and 2012-13.

3.5 The petitioner filed detailed reply dated 10th May, 2014 providing requisite details including the registered sale deeds and purchase deeds of the property sold under the year under consideration on which short term capital gain was offered by the petitioner for the A.Y. 2012-13 qua 12.5% share of the petitioner. The petitioner also pointed out that against the sale of the land, petitioner claimed exemption under Section 54B of the Act by purchasing agricultural land. Copies of purchase deeds were also provided by the petitioner along with bank book showing payment made for purchase of the land.

3.6 The Assessing Officer thereafter, on perusal of the information furnished, asked the petitioner by notice dated 26th February, 2015 to show cause as to why jantri value should not be adopted while computing the capital gain and appropriate addition should not be made to the total income with regard to the sale of the land situated at Block No.9 of the properties sold by the petitioner.

3.7 The petitioner filed reply dated 13th March, 2015 along with valuation report pertaining to sale of land at Block No.10/A and 10/B along with detail justification with regard to the sale consideration received on the sale of property situated at Block No.9 stating that due to adverse features of the land at Block No.9 the said land was sold at the maximum available market price at a particular point of time and requested the Assessing Officer to accept the actual sale consideration and thereby requested the Assessing Officer not to invoke provision of Section 50C of the Act.

3.8 The Assessing Officer thereafter passed assessment order under Section 143(3) dated 24th March, 2015 making addition of Rs.72,245/- to the returned income of the petiti