COMMISSIONER OF INCOME TAX Vs. C. RAMAIAH REDDY

JUDGEMENT

(1.) This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment year 2005-06. The appeal was admitted by a bench of this Court vide order dated 26.09.2012 on the following substantial questions of law:

(2.) Facts leading to filing of the appeal briefly stated are that assessee is an individual engaged in real estate business. The assessee filed the return of income for the Assessment year 2005-06 declaring loss of Rs.65,49,770/- and subsequently filed the audit report. The assessing officer completed the reassessment under Section 143(3) read with Section 147 of the Act and by an order dated 31.12.2008 determined the taxable income at Rs.12,10,51,209/- after making an addition of Rs.12,14,68,180/- as long term capital gains and a sum of Rs.61,32,800/- as short term capital gains by invoking Section 45(2) of the Act.

(3.) The assessee preferred an appeal before the Commissioner of Income Tax (Appeals) on the ground that reopening of assessment is invalid since, no notice under Section 143(2) of the Act was issued. The Commissioner of Income Tax (Appeals) vide order dated 26.11.2010 inter alia held that assessee has not raised any objection with regard to non service of notice under Section 143(2) before the assessing officer and therefore, the objection raised in appeal is not maintainable in light of the provisions contained in Section 292B of the Act. It was further held that on family partition if assets are allotted to the assessee, the character of the assets in the hands of the assessee is only capital asset. It was further held that the assessee had treated the lands received by him in partition as stock in trade in his books and had offered business income on the sale of the lands. Thus, no infirmity was found with the order passed by the assessing officer and the appeal was dismissed.