In Radhawami Salt works v. ACIT, a division bench of the Gujarat High Court held that re-assessment under s. 147/148 of the Income Tax Act cannot be made when the original assessment order is challenged on appeal and is not yet disposed. Assessee took 350 acres of land on lease from the Government for the production of land. Coastal Gujarat Private Limited (CGPL) was interested in purchasing such land and therefore privately negotiated with the petitioner to give up its rights prematurely. Accordingly, assessee surrendered the lease to the Government. This land was thereafter sold by the Government to CGPL. CGPL had separately made payment of Rs.29.92 crores to the assessee in two installments. Assessee in its return, shown the amount as long term capital gain received in lieu of transfer of land. However, during the assessment proceedings, the assessee contended that such receipt was not in the nature of capital gain but was one time receipt which was not taxable. The Assessing Officer, however, rejected the contention and treated the same as capital gain. A second appeal filed against the order is pending for disposal before the ITAT.
Article referred: http://www.taxscan.in/re-assessment-not-permissible-appeal-original-assessment-order-not-disposed-gujarat-hc/8751/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+Taxscan+%28Top+Stories+%E2%80%93+Taxscan+%7C+Simplifying+Tax+Laws%29
Article referred: http://www.taxscan.in/re-assessment-not-permissible-appeal-original-assessment-order-not-disposed-gujarat-hc/8751/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+Taxscan+%28Top+Stories+%E2%80%93+Taxscan+%7C+Simplifying+Tax+Laws%29
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