| The Tax Publishers2020 TaxPub(DT) 2838 (Mum-Trib) : (2020) 183 ITD 0497 : (2020) 207 TTJ 0663 INCOME TAX ACT, 1961
Section 147 Section 80-IB
Where information was received by AO during assessment of succeeding year from local authority intimating that building completion certificate was not issued to housing project of assessee and further on verification, AO found that built-up area of certain flats was more than prescribed area, such information subsequent to culmination of original assessment was a bona fide reason to believe that income chargeble to tax had escapad assessment.
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Reassessment - Reason to believe - Deduction under section 80-IB(10) wrongly allowed to assessee - Information received from Municipality that building competition certificate was not issued in relation to assessee's housing project
Based on intimation received by local authority (Municipal Corporation) that building completion certificate and occupation certificate was not issued to assessee on account of certain failure on its part as regards certain compliances, AO initiated reassessment proceedings on allegation that deduction under section 80-IB(10) was wrongly allowed to assessee. Held: Only during assessment of succeeding year, local authority intimated AO, that building completion certificate was not issued to housing project. Further, on basis of verifications carried out in course of assessment proceedings , AO also found that built-up area of all flats in project was more than prescribed area of 1000 sq. ft., which clearly contravened norms prescribed in section 80-IB(10)(c). On basis of information/tangible materials gathered by AO subsequent to culmination of original assessment for relevant assessment year, he had bona fide reason to believe that assessee was ineligible for claim of deduction and that assessee was wrongly allowed deduction under section 80-IB(10) during regular assessment, which resulted in escapement of its income chargeable to tax. Thus, reassessment proceedings were rightly initiated.
Followed:Asstt. CIT v. Rajesh Jhaveri Stock Brokers (P) Limited (2007) 291 ITR 500 (SC) : 2007 TaxPub(DT) 1257 (SC) and Export Credit Guarantee Corporation of India Ltd. v. Addl. CIT & Ors. (2013) 350 ITR 651 (Bom) : 2013 TaxPub(DT) 0551 (Bom-HC). Distinguished:CIT v. Burlop Dealers Limited (1971) 79 ITR 609 (SC) : 1971 TaxPub(DT) 313 (SC), GKN Sinter Metals Ltd. (Formerly Mahindra Sintered Products Ltd.) v. Ms. Ramapriya Raghavan, Asstt. CIT Circle 2(1) & Ors. (2015) 371 ITR 225 (Bom) : 2015 TaxPub(DT) 543 (Bom-HC).
REFERRED : Pr. CIT, Shimla v. Aarham Softronics (2019) 261 Taxman 529 (SC) : 2019 TaxPub(DT) 1345 (SC), CIT v. Classic Binding Industries (2018) 407 ITR 429 (SC) : 2018 TaxPub(DT) 5253 (SC), CIT of Customs (Import), Mumbai v. . Dilip Kumar and Company & Ors. (2018) 9 SCC 1 (SC) : 2018 TaxPub(EX) 737 (SC), CIT-19, Mumbai v. Sarkar Builders (2015) 375 ITR 392 (SC) : 2015 TaxPub(DT) 2156 (SC),CIT v. Kelvinator of India Limited (2010) 320 ITR 561 (SC) : 2010 TaxPub(DT) 1335 (SC), Ipca Laboratory Ltd. v. Dy. CIT (2004) 266 ITR 521 (SC) : 2004 TaxPub(DT) 1472 (SC),Pandian Chemicals Ltd. v. CIT (2003) 262 ITR 278 (SC) : 2003 TaxPub(DT) 1233 (SC), Anil Rai v. State of Bihar 2009 TaxPub(EX) 22 (SC),CIT v. NC Budharaja and Co. & Anr. (1993) 204 ITR 0412 (SC) : 1993 TaxPub(DT) 1502 (SC),Petron Engineering Construction Private Limited & Anr. v. Central Board of Direct Taxes & Ors. (1989) 175 ITR 523 (SC) : 1989 TaxPub(DT) 727 (SC), S. Narayanappa & Ors. v. CIT (1967) 063 ITR 219 (SC) : 1967 TaxPub(DT) 198 (SC), Calcutta Discount Company Limited v. ITO (1961) 41 ITR 191 (SC) : 1961 TaxPub(DT) 130 (SC), Otters Club v. Director of Income Tax (Exemptions) Mumbai & Ors. (2017) 392 ITR 244 (Bom) : 2017 TaxPub(DT) 0689 (Bom-HC), CIT v. . Elegant Estates (2016) 383 ITR 49 (Mad) : 2016 TaxPub(DT) 1501 (Mad-HC), CIT v. Raviraj Kothari Punjabi Associates (ITA No. 1628 of 2013, dated 24-4-2015) (Bom), Shivsagar Veg. Restaurant v. Asstt. CIT (2009) 317 ITR 433 (Bom) : 2009 TaxPub(DT) 1040 (Bom-HC), Dy. CIT, Circle 14, Pune v. Jindal Mittal Griha Nirman (P) Ltd. (2017) 51 CCH 240 (Pune-Trib) : 2017 TaxPub(DT) 4752 (Pune-Trib), Asst. CIT v. Ekta Sankalp Developers (2015) 152 ITD 805 (Mum) : 2015 TaxPub(DT) 1145 (Mum-Trib), Kumar Builders Consortium v. Asstt. CIT Circle-47 Taxcorp (AT) 32844 (Pune-Trib),Runwal Multihousing (P) Ltd. v. Asst. CIT [ITA No.1015, 1016 and 1017/PN/2011, dt. 21-11-2012], Tushar Developers v. ITO6 Taxcorp (AT) 30190 (Pune-Trib), Asstt. CIT, Central Circles 24 and 26, Mumbai v. Sheth Developers (P) Ltd. (2009) 33 SOT 277 (Bom-Trib) : 2009 TaxPub(DT) 1829 (Mum-Trib), Brahma Associates. v. Jt. CIT., Dhareshwar Promoters & Builders, Tushar Developers v. ITO and Kumar Behary Rathi and Raviraj Kothari Punjabi Associates v. Dy.CIT (2009) 119 ITD 255 (Pune-Trib) : 2009 TaxPub(DT) 1627 (Pune-Trib), Dy. CIT. v. Brigade Enterprises (P) Ltd. (2008) 119 TT J (Bang-Trib) 269 : 2008 TaxPub(DT) 2258 (Bang-Trib),ITO, Ward--8 (1) and Nagpur. v. Air Developers. (2010) 122 ITD 125 (Nag-Trib) : 2009 TaxPub(DT) 535 (Nag-Trib).
FAVOUR : Against the assessee.
A.Y. :
INCOME TAX ACT, 1961
Section 147
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