INCOME TAX ACT, 1961

Section 148

Reassessment - Change of opinion - Withdrawal of exemption granted under section 54B on ground that property was brought not in name of assessee but in name of different persons -

AO made an addition on account of long-term capital gains arising on sale of property. The difference was on account of adoption of lower value of fair market value as on 1-4-1981. AO allowed exemption under the provisions of section 54B as claimed by assessee. Subsequently, based on information on record, AO formed an opinion that assessee was not entitled for exemption under section 54B. Accordingly, notice under section 148 was issued and assessment came to be completed by AO withdrawing the exemption granted under section 54B on the ground that the property was brought not in the name of assessee but in name of different persons. Held: There was no reference to any fresh tangible material brought on record. It is amply clear from the assessment order that AO had made observation ''subsequently on perusal of the records showed that assessee had claimed an exemption under section 54B towards purchase of agricultural land under different names''. This goes to show that reopening is based on the same set of facts which were available with AO at the time of making original assessment. AO allowed exemption under section 54B after considering the material available on record and took plausible view. Therefore, reopening of assessment was only based on change of opinion.

REFERRED : CIT v. M/s. Kelvinator of India Ltd. (2010) 320 ITR 561 (SC) : 2010 TaxPub(DT) 1335 (SC) Sanjeev Ghei v. ITO 2019 TaxPub(DT) 1966 (Del-HC) and ITO v. Sanjeev Ghei 2019 TaxPub(DT) 2037 (SC)

FAVOUR : In assessee's favour

A.Y. :

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