Sale and Purchase of Immovable Property not disclosed in Original Return: ITAT upholds Reassessment Proceedings [Read Order]

The Income Tax Appellate Tribunal (ITAT), Mumbai bench, while upholding the reassessment proceedings, held that the sale and purchase of immovable property by the assessee were not disclosed in the original return.

Himanshu Manoranjan Bhatt, an individual, physically filed his income tax return on 03/11/2011. Subsequently, based on information from the ITD system under the NMS module, it was revealed that the assessee had purchased property valued at Rs. 1,46,88,500, sold property at Rs. 1,27,00,000, and received contract receipts of Rs. 50,000 during the relevant year. Proceedings under section 147 of the Act were initiated.

Since the assessee had sold and purchased property without declaring long-term capital gains in the original return, the Assessing Officer referred the computation to DVO, which was not received before the completion of assessment proceedings.

The assessee explained that due to oversight, the transaction was not reflected in the return. The AO, after verification, held that the assessee should have declared capital gains on the property sale. The AO added long-term capital gains of Rs. 72,83,143 to the total income for not declaring it in the original return and the return filed in response to the notice under section 148.

The assessee appealed to CIT(A), who dismissed the appeal. Another appeal was filed before the tribunal. During the proceedings, the tribunal noted that the sale and purchase of property were not disclosed in the original return. The reassessment proceedings were considered valid under section 147 based on information from the ITD system, constituting tangible material.

The two-member bench of Prashant Maharishi (Accountant Member) and Sandeep Singh Karhail (Judicial Member) upheld the reassessment proceedings.

The bench dismissed the assessee’s appeal, with Shirish Shah representing the assessee and P.D. Choughule representing the revenue.

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