TaxTMI 
TaxTMI 
TaxTMI 
2014 (9) TMI 199
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....he ADIT and it was found that the Assessee was the real owner of the various projects carried out in the name of Co-operative Housing Societies. On being confronted with the various documents found and seized, Shri Pranav Shah, Managing Director of the Assessee admitted undisclosed profit from Kalhar Bungalow Project (The main project which was being developed by the Assessee during the year under consideration) .at Rs. 4 crore and offered the same for taxation. On the basis of search and seizure operation, notice u/s. 148 was issued and served on Assessee on 23.02.2007 in response to which Assessee filed return of income on 16/04/2007 declaring loss of Rs. 42,625/-. Thereafter assessment was framed u/s. 143(3) read with section 147 vide order dated 28.12.2007 and the total income was determined at Rs. 53,00,095/-. Aggrieved by the order of A.O, Assessee carried the matter before CIT(A). CIT(A) vide order dated 31.03.2009 partly allowed the appeal of the Assessee. Aggrieved by the order of CIT(A), Revenue is now in appeal before us and Assessee has also filed C.O. The grounds raised by the Revenue reads as under:- 1. The Ld.CIT(A) has erred in law and on facts in deleting the addi....
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....ary to the facts and provisions of law. The assessee submits order of reassessment being invalid ought to have been quashed by the Commissioner of Income tax (Appeals). The assessee submits that the order be quashed. We first take up the CO of Assessee as it challenges the validity of issue of notice u/s. 148 and the reassessment framed thereunder:- Though the assessee has raised various grounds but before us it was submitted by ld. AR that the only question is that the validity of issue of notice u/s. 148 and the assessment framed u/s 143 (3) r.w.s. 147. 5. Assessee has challenged the re-opening u/s. 147,148 of the Act. Before us, the ld. A.R. submitted that the notice u/s. 148 was issued beyond 4 years and the A.O was not having any new material on the basis of which he had proceeded for re-assessment. He further submitted that A.O had examined the material and therefore re-opening was on account of change of opinion and it was not permissible in law. He placed reliance on the decision of Bombay Tribunal in the case of H.V Transmission Ltd. vs. ITO ITA NO. 2230/Mum/2010 order dated 07.10.2011, Signature Hotels P. Ltd vs. ITO (2011) 338 ITR 51 (Del) decision of Delhi High Court....
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....pl. 2 (b) which states that "where a return of income has been furnished by the Assessee but no assessment has been made and it is noticed by the Assessing Officer that the Assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return. " On perusal of this provision, it is borne out that even if no assessment was originally made by the Assessing Officer but subsequently it comes to his notice that the Assessee has understated the income, it shall be deemed to be a case of escaping assessment. The only requirement for assuming jurisdiction in the light of Explan. 2(b) is that "it is noticed by the Assessing Officer that the Assessee has understated the income etc." Thus the requirement of noticing is of understatement of income. We are of view that such noticing as may be from the material already on record or some new material coming to his knowledge. So long as noticing of understatement of income is true, the source of such noticing as emanating from some "new material" or an existing material is wholly irrelevant in the context of Expln. (b). In the present case, on examination of the material found during the course of search an....
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....e matter before CIT(A). CIT(A) deleted the addition made by A.O by holding as under:- 11.1 In respect of the additions of Rs. 14.95 lakhs u/s. 68 of the Act, it is seen that the appellant had vide reply dated 26.12.2007, had filed copies of account of the creditors and furnished their names/addresses/confirmations. The PAN of some creditors, the details of interest/paid and/or of repayments were also furnished vide letter dated 30.10.2007. The transactions were routed through bank(s). A number of decisions of examples reported in 301 ITR 298 (Raj), 251 ITR 263 (SC), 307 ITR 165 (Guj), 256 ITR 360, etc, were cited to state that outstanding liability of predecessor entity could not be fastened on the succeeding entity. Thus certain loans (listed at S. No. 1 to 3 and 5 to 7) were raised by M/s. Navratana Kausambi Association (NKA) and were transferred to the successor appellant. It is seen that the facts/details furnished by the appellant in respect of creditors were similar in A.Y. 97-98 as well. In similar facts of the appellant, the then CIT(A)-XI, in appellant's appeal for A.Y. 97- 98 had held in his order, dated 3.01.2005 in appeal No. CIT(A)-XI/112/01-02 that the addition made ....
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...., at page No.63 of the paper-book, there was information about Victoria Capital Ventures Ltd. It gave the address as Bharat House, 1st Floor, 104, Bombay Samachar Marg, Bombay-23 and. also some Numbers, such as, AAA - CV 3287- D/D,C.Cir(I)/l. This is also a copy of account of Victoria Capital Ventures Ltd. on the letter-head of Navratna Organisers & Developers Pvt. Ltd. At page No.68 of the paper book, is the copy of account of Yogesh Anubhai Shah (HUF) which shows the address of the party as 88, Lavanya Society Vasna, Ahmedabad-7. This is also on the letter-head of the assessee. Page Nos. 72 and 73 of the paper- book show account of Payal Yogesh Shah on the letter-head of the assessee and also address of that party. At page No.77 of the paper-book shows the account of Nilay Yogesh Shah on the letter-head of the assessee with the address of the party. The copies of account: show that money was transferred through cheque, i.e. though banking channels. It is not a case where no data is available for verification. The assertion of the Learned Authorised Representative of the assessee is that these documents were submitted to the Assessing Officer. In any case, we restore the matter to....
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....mponent was Rs. 31,69,030/- there was no scope for increase in liability for goods amounting to Rs. 41,99,368/-. According to Assessing Officer, the increase in liability for goods could be only to the extent of Rs. 7,19,642/- (being the difference between the work in progress of Rs. 38,88,672/- and the interest component of Rs. 31,69,030/- transferred to work in progress.) and he therefore considered the balance liability of Rs. 34,79,726/- (being difference of liability for goods of Rs. 41,99,368/- and the liability of Rs. 7,19,642/- on account of interest) as unexplained bogus liability and added it to the income. Aggrieved by the order of Assessing Officer, Assessee carried the matter before Ld. CIT(A). Ld. CIT(A) after considering the submission, deleted the addition by holding as under:- "12. In respect of the disallowance for unexplained liability, it has been pointed out that the name/break up of liabilities as on 31/3/1999 and 31/03/2000 had been furnished along with details of transactions. The liabilities arising out of purchases/expenses were vouched and books were audited. The expenses considered directly related to projects and debited to project account while expens....
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....sessee is also directed to furnish all the required information called for deciding the issue promptly. Thus this ground of Revenue is allowed for statistical purpose. Ground No. 4 is with respect to deletion of addition of Rs. 3,11,094 by applying net profit rate. 18. During the course of assessment proceedings, on verification of the accounts Assessing Officer noticed that on the total construction receipts of Rs. 33,47,000/-, Assessee had shown net profit of Rs. 62,495/- which works out to 1.87% of receipts/WIP which according to Assessing Officer was quite low for the nature of business of Assessee. He therefore by applying the provisions of s. 44AD of the Act, estimated the profit @ 8% and worked out the net profit at Rs. 3,11,094 and made the addition. Aggrieved by the order of Assessing Officer, Assessee carried the matter before Ld. CIT(A). Ld. CIT(A) deleted the addition by holding as under:- "13. In para 4 of this order the AO has noted that the construction receipts have been shown at Rs. 33.47 lakhs. While work-in-progress has increased by Rs. 38,88,672/- and so felt that receipts of Rs. 5,41,672/- were apparently suppressed further expenses of Rs. 30.75 lakhs, being....