The Commissioner Of Income Tax-Ii,Pune v. Mrs. Hemlata K. Bhatiya

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.5737 OF 2010 The Commissioner of Income Tax-II,Pune...Appellant. Vs. Mrs. Hemlata K. Bhatiya...Respondent. .... Mr.Vimal Gupta, for the Appellant.Mr. V. Murlidhar a/w. Vishnu S. Hadade, for the Respondent. .... CORAM : J. P. DEVADHAR & A.R. JOSHI, JJ. P.C. thDATED : 24 JANUARY, 2012. 1.Whether the ITAT was justified in quashing the reassessment proceedings on the sole ground that the reasons recorded by the Assessing Officer for reopening of the assessment were factually incorrect and legally untenable, is the question raised in this Appeal. 3.In the present case, the assessment was sought to be reopened firstly on the ground that the assessee has wrongly claimed deduction under Section 54F of the Income Tax Act, 1961 and secondly, the assessee was not entitled to set off capital gains computed under Section 50 of the Act against long term capital loss. 4.It is an admitted fact that the assessee had not claimed deduction under Section 54F of the Act. Therefore, the ITAT was justified in holding that the reopening of the assessment on the ground that the assessee had wrongly claimed deduction under Section 54F of the Act was bad in law. 5.Similarly, prior to the amendment of Section 70 of the Income Tax Act, 1961 by Finance Act 2002 with effect from 1.4.2003 set off of capital gains computed under Section 50 of the Act against long term capital loss was allowable. In the present case, the assessment year involved herein is A.Y. 2002-03 and hence the above amendment has no application in the facts of the present case. Therefore, reopening of the assessment on the ground that the set off was not available was also erroneous. 6.This Court in the case of CIT Vs. Jet Airways (I) Ltd. reported in 331 ITR 236 has held that where no additions can be made on the basis of the reasons recorded for reopening of the assessment then, the additions made by the Assessing Officer on the grounds which are not recorded in the reasons for reopening of the assessment cannot be sustained. In these circumstances, we see no reason to entertain this Appeal. The Appeal is dismissed accordingly. (A. R. JOSHI, J.) (J. P. DEVADHAR,J.)