AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (12) TMI 177
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.... or vouchers for the expenditure claimed in the returns of income. Similarly, from the bank statement found during the survey and also obtained post survey, it was found that assessee had received huge amounts from M/s. Global City Projects P. Ltd., now known as New Global City Projects P. Ltd(NCCPL). Enquiries were made from the said company and a statement of the Director Mr. Prasad V. Potluri was recorded. Consequent to the above findings, A.O. has issued notice under section 148 by initiating proceedings under section 147 and served notices on 20.09.2011. In response, assessee filed letters on 15.11.2011 requesting to treat the returns filed originally as returns filed in response to the notice issued under section 148. The reasons for issuance of notice under section 148 were communicated by letter dated 16.11.2011 and thereafter, notice under section 143(2) and 142(1) have been issued. It was the Assessing Officer's contention that assessee has received various amounts from the said company towards land development cost and without doing any land development cost, assessee has received the entire amount and utilized for further investing in various other group concerns. Accor....
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....that the Assessing Officer had failed to comply with the provisions of sec.151. Sec.151(1) applies to a situation where the original assessment had been made u/s 143(3) or u/s 147. In the appellant's case, the returns had merely been processed u/s 143(1) before issue of notice u/s 148 resulting in the present proceedings. Sec.151(1) is, therefore, not relevant to the facts in the appellant's case. 7.9. Sec.151(2) applies in a situation where the notice u/s 148 is issued more than 4 years from the end of the relevant assessment year. In the appellant's case, the notices for both the years were issued well before this period of 4 years. Sec.151(2) is, therefore, not relevant to the facts in the appellant's case either. 7.10 In view of the above discussion, I find that all the grounds (particularly the additional grounds) filed by the appellant are frivolous and have no basis in facts. The appeal is dismissed on the issue of validity of the notice u/s 148 and the proceedings u/s 147." 4. Another ground raised before Ld. CIT(A) was nonproviding copy of statement of Mr. Prasad V. Potluri. Ld. CIT(A) directed the A.O. to provide copy to assessee and opportunity t....
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....(4). The appellant did not file the return in response to the notice u/s 148 within the time of 30 days allowed to it and the belated letter filed by it, deeming the original return filed as one filed u/s 148, would at best qualify the appellant to the benefits of sec.139(4), not of sec.139(5). 9.12. It is, therefore, held that the revised returns filed on 12.03.2013 for the two years were not valid returns and the Assessing Officer was justified in ignoring them for the purpose of making the assessment." 6. Assessee further contended that it has filed revised audit report and accordingly, the incomes as declared in the revised audit report should be considered. However, this contentions of assessee was also rejected by Ld. CIT(A) vide paras 10.2 to 10.4. 7. Now coming to the merits of the additions made by A.O., Ld. CIT(A) was of the opinion that since assessee has not carried out any development activity, the entire receipts received by assessee are Revenue receipts and are taxable accordingly. Ld. CIT(A) final findings are as under : "11.4. Indeed, it is interesting to note that though NCC was aware of the lack of any development activity having actually been carried....
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...., Ld. D.R. submitted that assessee has originally offered gross profit on contract receipts and offered income. A.O. found out in the survey proceedings that no expenditure as claimed in the P & L Account, was incurred by assessee and accordingly, the receipts were brought to tax correctly. It was, however, for Assessee to substantiate the expenditure claimed. Considering the statement of Mr. Prasad V. Potluri it can be stated that assessee has entered into transactions and issued bogus expenditure bills. Therefore, the gross receipts are taxable as Assessee has shown amounts as revenue receipts in the P & L account. 10. We have considered the issue and examined the contentions and documents placed on record. There is no dispute that assessee has initially shown receipts as revenue receipts and claimed various expenses and declaring incomes in the P & L account. The returns were also filed accordingly. The same were also processed. Consequent to the survey proceedings, A.O. found that the expenditure entries made in the books of accounts are not genuine and accordingly, he brought to tax entire receipts as shown in the P & L Account as income of assessee. In the re-assessment pr....
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....r to "assess or reassess" the escaped income of an assessee. The use of the expression "assess or reassess such income or recompute the loss or depreciation allowance" in s. 147 after the conditions for reassessment are satisfied, is only relatable to the preceding expression in cls. (a) and (b), viz., "escaped assessment". The term "escaped assessment" includes both "non-assessment" as well as "underassessment". Income is said to have "escaped assessment" within the meaning of this section when it has not been charged in the hands of an assessee in the relevant year of assessment. The expression "assess" refers to a situation where the assessment of Assessee for a particular year is, for the first time, made by resorting to the provisions of s. 147 because the assessment had not been made in the regular manner under the Act. The expression "reassess" refers to a situation where an assessment has already been made but the ITO has, on the basis of information in his possession, reason to believe that there has been underassessment on account of the existence of any of the grounds contemplated by the provisions of s. 147(b) r/w the Explan. 1 thereto. (Para 7) The principle laid do....
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....8 and where reassessment is made under s. 147 in respect of income which has escaped tax, the ITO's jurisdiction is confined to only such income which has escaped tax or has been under assessed and does not extend to revising, reopening or reconsidering the whole assessment or permitting Assessee to reagitate questions which had been decided in the original assessment proceedings. It is only the underassessment which is set aside and not the entire assessment when reassessment proceedings are initiated. The ITO cannot make an order of reassessment inconsistent with the original order of assessment in respect of matters which are not the subject-matter of proceedings under s. 147. An assessee cannot resist validly initiated reassessment proceedings under this section merely by showing that other income which had been assesed originally was at too high a figure except in cases under s. 152(2). The words 'such income' in s. 147 clearly refer to the income which is chargeable to tax but has "escaped assessment" and the ITO's jurisdiction under the section is confined only to such income which has escaped assessment. It does not extend to reconsidering generally the conclude....
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.... the amount paid to assessee as advance and assessee even though treated the receipts as revenue receipts and offered incomes, subsequently with revising accounts treated them as a liability in the books of accounts. Be that as it may, there are enquires made by A.O. about the transactions and AO has the following findings. "In view of the statement of Sri Prasad V. Potluri, Director of NCCPL that no development activities were carried on by the assessee company and the fact that no evidence in the form of bills/vouchers were found at the business premises of the assessee at the time of survey, it was felt necessary to cause inquiries at field level to ascertain the truth. Accordingly, Sri Y. Prasad, Inspector of Income Tax was directed to visit the lands at Survey No.664 and 721 of Nadergul village and report the factual position. Accordingly, Sri Y. Prasad visited the lands at Sy.No. 664 & 721 of Nadergul village and submitted his report on 23.09.2011. As per the report of Inspector, the lands in Sy.No.664 & 721 of Nadergul village are agricultural lands wherein is agricultural activity is being carried out even on the date of inspection. Some of the lands in these survey N....