AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 51
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.... "1. The learned Commissioner of Income Tax (Appeals) erred in holding that the AO was justified in assuming jurisdiction u/s. 147 and while doing so he amongst other failed to appreciate that: a. The AO has assumed jurisdiction in pursuance to an invalid notice u/s. 148. b. The AO has not provided the appellant with copy of reasons recorded in writing inspite of the fact that the appellant had made a specific request vide letter dated 20.04.2010. c. The appellant had truly and fully disclosed his income and all the material facts necessary for the assessment. d. There was no income chargeable to tax which had escaped assessment. e. The reasons recorded for reopening of assessment had no live nexus or bearing to the facts obtained in appellants case. f. The A.O., in the order passed u/s. 143(3) had examined in detail the claim made by the appellant u/s. 80IB(10) of the Act. g. Merely on the basis of change of opinion jurisdiction for reassessment cannot be assumed; and h. The appellant was not a works contractor. 4. Rival contentions have been heard and record perused. The facts of the case are that the assessee filed return of income for A.Y.2004-05 declaring inc....
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....ssee did not furnish this correct and true fact to the A.O. The Certificate from BMC referred to assessee's application No.3501 dated 29.09.2000. The assessee had not filed copy of this application No.3501 dtd.29.09.2000 before the A.O. during original assessment proceedings. Thus A.O. had no occasion to examine the same and assessment order shows non application of mind on these facts brought out by CIB Wing of the Department. The A.O. held that during original assessment proceedings, the assessee had withheld all the relevant information of original / earlier plans of entire project and had misrepresented Bldg. No.4 as a housing project and that project as one which commenced only on 25.01.2001. On the basis of above information, the A.O. initiated proceedings u/s. 147 of the Act recording his reasons thereof on the ground that the date of commencement of housing project was before 01.10.1998 and hence assessee was not eligible to claim deduction u/s. 80-IB(10) of the Act. The A.O. issued notice u/s. 148 of the Act dtd.25.03.2010. In response the appellant's Authorized Representative requested that the return filed earlier may be treated as return filed in pursuance to no....
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.... should be based on some information/material available with the A.O. As per explanation 2 to sec.147, the case of assessment of income subjected to excessive relief under the Act have been considered as sufficient reason for reopening the assessment. In the case under consideration the A.O. reopened assessment on the basis of some information. Such information was relevant to the appellant's claim of deduction u/s. 80-IB(10) of the Act. Therefore, the A.O. was having sufficient reasons to form a belief that income had escaped assessment on this account. What was required under the Act is that there should be some bonafide reasons for reopening the assessment. It was not required that at the stage of reopening the assessment that reasons should conclusively prove the non assessment/ concealment of income, consequently reasons was not to be questioned so long there was a prima facie case of escapement / non assessment. Considering the facts and circumstances of the case as mentioned above, the A.O. was justified in assuming jurisdiction ujs.147 of the Act. This ground of appeal is therefore, dismissed. 3. The 2nd ground of appeal is that the A.O. erred in not allowing deduc....
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....d.19.06.1998, copy of occupancy certificated dtd.29.10.2001, intimation of disapproval u/s.346 of BMC Act dtd.13.06.2001 (all these documents received by A.O. from CIB Branch), the A.O. held that the appellant's housing project commenced before 01.10.1998 and therefore, the appellant was not entitled for deduction u/s.80-IB of the Act as the condition laid down u/s. 801B(10) of the Act was not fulfilled. The A.O. therefore, disallowed appellant's claim of deduction u/s.80IB(10) of the Act. 3.2 During appellate proceedings, the appellant repeatedly argued that it had claimed deduction u/s. 801B(10) of the Act on housing project completed in respect of Building no.4 of CTS No.261, 261/1 & 2, 263 at caves Road, Jogeshwari. The appellant further explained that during reassessment proceedings, vide its letter dtd. 13.12.2010 it was intimated to the A.O. that the construction of housing project was at Building No.4 of CTS No. 261/161/1 & 2, 263 at caves Road, Jogeshwari. During appellant proceedings, the appellant filed copy of Municipal Corporations letter dtd.12.11.2001 addressed to appellant's Consultant Shri Manoj Paresh in support of its argument that the plan/applicat....
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....s office letter dtd.24.03.2011, the A.O. was asked to explain the following. The contents of this office letter dtd.24.03.2001 are reproduced hereunder: "The appellant Shri Krishna Kumar Pittie, proprietor of M/ s. Victoria Construction was the builder and developer. 2. Please refer assessment order u/ s. 143(3) dtd.26.12.2006. In the assessment order, the appellant's claim of deduction u/ s. 80-IB was rejected on account of element of commercial area in the residential project. 3. Please refer page no. 1, 2 & 3 enclosed with this letter pertaining to the approvals issued by Municipality. These approvals, etc. have been issued by Municipality in respect of proposed building no.4 on CST No.261,261/1 to 2. The appellant has argued that these documents were furnished to the A. O. during assessment proceedings. 4. Page No. 4 & 5 are extracts from CIT(A) order. The CIT(A) also considered that the appellant completed the construction of housing project at Bldg. No.4. 5. Page no. 6 is grounds of appeal taken by Department before ITAT against the order of CIT(A). The ground was in respect of element of commercial area in the residential project. There was no ground that th....
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.... are reproduced hereunder: "Thus there was no objection from the assessee's side regarding the correctness and applicability of the information received from the CIB as not pertaining to the building constructed by assessee at any stage and hence, no further enquiry was done at this end. Had the assessee objected, further information. would have been collected from the concerned department of BMC regarding the building no.4 and its earlier approvals, if any, through further enquiries. As such it is placed that assessee may not be granted any relief on this point unless the original facts as ascertained and forwarded by CIB Wing is proved as incorrect and no such approval in the form of commencement certificate had been issued before 1.10.98 for the building no.4 constructed by assessee. " The copy of Remand Report was furnished to the appellant for furnishing its counter comments. The appellant vide letter dtd.06.05.2011 submitted its submissions reiterating its arguments that: (i) Information received from CIB was pertaining to Building No.3 whereas it had claimed deduction u/s. 80-IB on housing project at Building No.4. (ii) This issue had already been examined dur....
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....ence and/ or approval by local authority was to Mr. Pankaj Shah, C.A. to Caron Ltd. and was in reference to the housing project on plot bearing No.CST No.261 /261 /2 & 263 which include building No.4 on part of the plot bearing No.261, 261/2 & 263. Proforma-1, provided alongwith the building plan of building no.4, provides area of plot (for the project) as 21,644 sq mts. with net area of the plot as 15980 sq. mts. The statement shows the composite calculation of built up area at 20,268 sq mts. for building no., 1 ,2,3 & 4. "Certificate of Plot Area" certifies the plot area as 21,644 sq. mts. It directly implies that building no.4 is not an independent housing project. Building no.4 is only a building plan under a housing project on the plot bearing CST No.261,261 /2 & 263 which includes 'existing' building no.1 and also includes building no2 and building no.3. The remand report of A.O. was made available to the appellant for its counter comments. In its submissions dtd.19.09.2011, the appellant filed detailed counter submissions. The appellant pointed out that the A.O. had not disputed that the appellant had constructed and developed housing project (Bldg. No.4) and th....
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.... Ltd. From these certificates, it could be seen that the occupancy certificate bearing no. CE/6597 dtd. 29.10.2001 was for the completion of development work of Bldg. No.3 on plot bearing CST No.261, 261/2 & 263. The commencement certificate bearing no. CE/6597 dtd.19.06.1998 was for the development work of Bldg. No.3 on plot bearing CST No.261, 261/2 & 263 as per approved plan dtd. 17.11.1998. The appellant further explained that Bldg. No.4 was not a part of approval granted in CE/6597 dtd.19.06.1998 on plot bearing CST No.261, 261/2 & 263. From these facts it was established that the plan approved by MCGM was only with reference to the development work for Bldg. No.3 and not at all with reference to the approved plan for Bldg. No.4. merely because plans were approved by the MCGM for Bldg. No.3 it could not be presumed that the plans for Bldg. No.4 were deemed to have been approved on the same date. In respect of A.O's comments regarding the proforma-1, the appellant in its counter reply stated that the A.O. has enclosed the proforma-1 which was forming part of the approved plans for Bldg. No.4 vide approval granted by MCGM in CE/7276/WS/AK dtd.12.11.2001. Thus the A.O. hims....
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....d building no.3 was never constructed by the appellant. In the remand report proceedings, the A.O had not carried out any enquiry on the reason that "thus there was no objection from the assessee's side regarding the correctness and applicability of the information received from the CIB as not pertaining to the building constructed by assessee at any stage and hence, no further enquiry was done at this end." Thus the A.O. also accepted that the documents received from CIB were pertaining to building no.3. However, in the remand report, the A.O. objected allowing any relief to the appellant or the ground that in case of objection from appellant, further information would have been collected from BMC in respect of building no.4 and its earlier approval. However, such approvals, etc. issued by BMC in respect of building no.4 were already on record during original and reassessment proceeding. In the remand report, the A.O. conveniently ignored to comment on the issue that building no.3 was not constructed by the appellant. In the facts and circumstances, vide this office letter dtd. 11.08.2011, the Addl. CIT Range 10(1), Mumbai was directed to obtain a fresh report from the A.....
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....he record we found that in the remand proceedings, the AO declined claim of deduction u/s.80IB(10) on the plea that housing project was approved and commenced prior to 1998, therefore, not eligible for claim of deduction. The CIT(A) after calling for the remand report had categorically recorded a finding to the effect that the AO has wrongly relied with respect to commencement certificate issued in respect of building No.3, whereas the assessee has categorically stated that he has not constructed building No.3, but it was building No.4. From the record we found that commencement certificate as referred by AO bearing No.CE/6597, dated 19-6-1998 passed for the development and work of building No.3 on plot bearing No.CST No.261, 261/1, 261/2 and 263 as per approved plan dated 17-11-1998. Furthermore, the occupancy certificate bearing No.CE/6597 dated 29-10-2001 was for completion of development work of building No.3 on plot bearing CST No. No.261, 261/1, 261/2 and 263. We further found that building No.4 was not a part of approval granted in CE/6597 dated 19-6-1998 on plot bearing CST No. No.261, 261/1, 261/2 and 263. Thus, the plan approved by MCGM was only with reference to the work....