Mahesh Sharma & Sons Vs. ITO, Ward-3(1), Raipur

Parties Involved

Facts Summary

Mahesh Sharma & Sons, an assessee under the jurisdiction of the Income Tax Officer (ITO) of Ward-3(1), Raipur, derived income from rural agricultural sources during the year under consideration. The assessee did not file its return of income believing that its income was only from rural agricultural sources, which are exempt under section 10(1) of the Income-tax Act, 1961. The case was taken up for reopening of the assessment under section 147 of the Act. The assessee had deposited cash amounting to Rs.1,29,08,500/- in its bank account and sold an immovable property for Rs.1,10,50,000/-, which may be subject to tax. The assessee did not respond to the show cause notices and was non-compliant with various statutory notices issued during the reopening assessment proceedings. The assessment was completed under sections 144 and 147 of the Act, resulting in the addition of the aforementioned amounts and determining the total income of the assessee at Rs.2,39,58,500/-. The assessee appealed against the order passed by the Commissioner of Income-Tax (Appeals), which was dismissed.…

Legal Issues

• 1. The initiation of proceedings under section 147 of the Income-tax Act, 1961 without fulfilling all the conditions is illegal and without jurisdiction.
• 2. The Commissioner of Income-tax (Appeals) erred in confirming the addition of Rs.1,29,08,500/- made by the Assessing Officer under section 69A of the Income-tax Act, 1961 without considering facts of the case in their entirety.
• 3. The Commissioner of Income-tax (Appeals) erred in confirming addition of Rs.1,10,50,000/- as long-term capital gain on account of sale of immovable property without considering facts of the case in their entirety.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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