TaxTMI 
TaxTMI 
2014 (11) TMI 176
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....owing 80IB claim. 3. On the fact and in the circumstances of the case, and in law, the Id. CIT(A) erred in directing the AO to delete the addition of Rs. 10,95,000/- made on account of loose papers impounded during the course of Survey carried out u/s 133A by InvestigationWing. 4. The appellant prays that the order of the Ld. CIT(A) on the above grounds be set aside and that of the A.O. be restored." 3. The brief facts of the case are that the assessee filed the original return of income declaring the total income of Rs.Nil. In the said return, deduction u/s.80IB(10) of Income Tax Act, 1961 was claimed by the assessee at Rs. 1,95,52,603/-. The whole of the profit, as per P& L account, was claimed as deduction u/s.80IB(10). Later on, the assessee filed a revised return of income declaring total income at Rs. 62,54,502/- and reduced the claim of deduction u/s 80IB(10) by Rs. 62,54,502/- i.e. the profit attributable to the nonresidential area comprising in the housing project. A survey action was carried out u/s. 133A by the then Assessing Officer (hereinafter referred to as the AO) on 3/2/2006. After the survey action, the assessee filed a second revised return of income whe....
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....in the reassessment proceedings. The ld. A.O did not accept the submissions of the assessee and proceeded to pass the reassessment order. He concluded that the area of the flats of the housing project under consideration was more than 1,000 sq. ft. He therefore disallowed the deduction u/s.80IB(10) of Rs. 84,81,101/-, which was earlier allowed in the assessment completed u/s.143(3). Further addition of Rs. 10,95,000/- was also made on account of receipts in cash by the assessee. The assessee challenged the reassessment order and the impugned additions before the Ld. CIT(A). 5. In appeal before the ld. CIT(A), it was submitted by the ld. A.R. of the assessee that the reopening was bad in law. It was submitted that the notice, under section 148, dated 02.07.08 was not served upon the assessee and the assessment had got time barred by 31.12.09. The fresh notice, under section 148, dated 31.03.10 was wrong and illegal. On merits, it was further submitted that no incriminating material was found against the assessee during the second survey. The conclusion of the Revenue Authorities that the area of the flats of the housing project under consideration was more than 1,000 sq. ft. w....
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.... by him in para 4. 2 of the reas ses sme nt order . In the appel late proceedings it was submitted that flat No.105 & 106 of 'A' wing was not combined as stated by the ld.A.0. The appellant states that in 'A' wing instead of 105 & 106 the office premises were constructed and in all 11 offices were constructed in 'A' wing in place of flat No.105 & 106. The details of the said 11 offices were given in the original assessment proceedings as well as in the reassessment proceedings. The appellant further states that in 'B' wing a prayer hall was made in place of flat No.105 & 106 whose area was 1593 sq.ft. Thus the appellant states that the ld. A.O. was not correct in stating that the flat No.105 & 106 in 'A' wing was combined and sold as a flat whose area exceeded 1000 sq.ft. The appellant further states that before coming to this conclusion the ld.A.O. did not ask any clarification from the appellant regarding this aspect. The appellant further states that the details filed on record of the A.O clearly show that unit No. 105 & 106 of 'B' wing is not at all a flat but it is a prayer hall (Upasana) whose area was 1593 sq.ft. and this area was cons....
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....ousing project developed by the appellant such as area details, details of residential flats, details of shops and office premises and details of prayer hail (Upasana) was furnished by the appellant in the original assessment proceedings before completion of assessment u/s.143(3). The assessment was completed u/s.143(3) after conducting a survey uls.133A and admittedly after verification of all the details and building project. The appellant withdrew the deduction originally claimed for the profit attributable to the area of shops office premises and Upasana (prayer hail) in the revised return filed before completion of assessment u/s.143(3). The detailed working of the profit attributable to the non residential area was also filed in the original assessment proceedings as such, the appellant, in my opinion cannot be blamed for not disclosing the relevant material facts fully and truly in the original assessment proceedings as far as the claim of deduction u/s.80IB(10) is concerned. 7. Similarly the other ground of reopening that cash of Rs. 10,95,000/- was received by the appellant as per the loose paper impounded during the survey conducted by the investigation wing has also n....
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....10) the relevant aspects were verified by the then AO. In my opinion no fault can be found with the appellant in not furnishing and disclosing fully and truly all the material facts in the assessment proceedings completed u/s.143(3). The first reason for reopening was that the appellant was accepting part of sale consideration in cash is merely a bald statement without reference to any corroborative evidence or material found in the survey conducted by the investigation wing. This is further forfeited with the fact that no addition was made in the reassessment order on account of acceptance of any part consideration in cash as alleged. In view of the above discussion find full force in the argument of the ld.A.R that there was no failure on the part of the appellant to disclose fully and truly all material facts necessary for the assessment. A notice u/s.148 was issued on 31/03/2010. The assessment year involved is A.Y.2004-05. Thus the notice has been issued after expiry of 4 years from the end of the relevant assessment year because the period of 4 years expires on 31/3/2009. Admittedly the original assessment was completed u/s.143(3). The first proviso to section 147 of I.T.Act,....
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....to believe that the flat in question was exceeding area of 1,000 sq. ft. The unit No.105 & 106 of 'B' Wing was not the area of flats but it was a prayer hall having area of 1593 sq. ft., which area was treated by the assessee as non residential area in original assessment proceedings and no deduction under section 80IB(10) was claimed in respect of the said area. Even a survey was conducted on 03.02.06 and the assessee had reduced the deduction in respect of car parking and deposits etc. also. It has also been held by the Ld. CIT(A) that the finding of the AO that Flat Nos.105 & 106 of 'A' Wing were combined was also wrong. It was established before the Ld. CIT(A) that in 'A' Wing instead of 105 & 106, the office premises was constructed and in all 11 offices were constructed in 'A' Wing upon which no deduction under section 80IB(10) was claimed. The Ld. CIT(A) also categorically observed that the loose papers upon which the figure of Rs. 10,95,000/- was written were not suggestive of the fact that the assessee had received any amount in cash. Even the assessee had properly explained and reconciled the figures before the Ld. CIT(A). Under such circumstances, the Ld. CIT(A) held tha....