TaxTMI 
TaxTMI 
2016 (6) TMI 452
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...., the relevant facts are that assessee is a company incorporated under the provisions of the Companies Act, 1956 and is, inter-alia, engaged in the business of construction and property development. In an assessment finalized under section 143(3) of the Act dated 24/12/2009, the total income was determined at Rs. 10,59,17,950/- which, inter-alia, included relief under section 80IB(10) of the Act amounting to Rs. 71,99,25,721/-. Consequently, the Assessing Officer reopened the assessment by issuing notice under section 148 of the Act and vide order dated 6/12/2012 reassessed the income at Rs. 14,36,67,009/-, inter-alia, restricting the relief under section 80IB(10) of the Act to the extent of Rs. 68,18,56,583/-. The action of the Assessing Officer in restricting the claim of deduction under section 80IB(10) is the subject matter of controversy in the Revenue's appeal. 3.1 The stand of the Assessing Officer is that the claim of deduction under section 80IB(10) is to be restricted to the extent of income under the head 'business or profession', whereas as per the assessee the claim of deduction under section 80IB(10) is allowable to the extent of gross total income. Notably, the st....
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....r Chapter VI-A) was arrived at Rs. 82,55,23,592/- which comprised of (i) income from house property - Rs. 13,51,076/-, (ii) income from business - Rs. 68,18,56,583/-; and, income from other sources - Rs. 14,23,15,933/-. The total taxable income has been computed by the Assessing Officer at Rs. 14,36,67,009/- after allowing deduction u/s 80IB(10) of the Act of Rs. 68,18,56,583/-. The dispute between the assessee and the Revenue is in respect of the claim allowed by the Assessing Officer of Rs. 68,18,56,583/- instead of Rs. 71,99,25,721/- sought by the assessee. The point raised is as to whether the claim u/s 80IB(10) of the Act is to be restricted to gross total income as contended by the assessee or it is to be restricted to the extent of income from business or profession. 7. Sec. 80IB of the Act prescribes for deduction in respect of profits and gains from certain industrial undertaking in order to compute the total income of an assessee. Sub-section (1) of Sec. 80IB prescribes that where the gross total income of an assessee includes any profits and gains derived from any business referred to in the sub-sections prescribed therein, the assessee shall be allowed in computing t....
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....nsidered in this light, in our view, CIT(Appeals) has made no mistake in coming to conclude that the claim u/s 80IB(10) of the Act is to be allowed to the extent of gross total income as claimed by the assessee and not to be restricted to the extent of income from business or profession. 8. We find that the aforesaid conclusion of the CIT(Appeals) is in consonance with the parity of reasoning laid down by the Hon'ble Bombay High Court in the case of M/s. J.B. Boda & Co. P. Ltd. in Income Tax Appeal No. 3224 of 2009 dated 18.10.2010. In the said case, the amount of eligible deduction u/s 80-O of the Act (which is also a part of Chapter VI-A) was determined at Rs. 1,29,41,830/- but the Assessing Officer restricted the claim to Rs. 69,70,000/- being the income under the head 'business or profession'. The assessee, on the other hand, sought the deduction to the extent of the gross total income referred to in Sec. 80B(5) of the Act. The Tribunal noted that Sec. 80-O of the Act or Sec. 80A did not provide for any such restriction and allowed the claim of the assessee for deduction u/s 80-O of the Act to the extent of gross total income. The Hon'ble Bombay High Court affirmed the v....
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.... vehemently pointed out that there was no justification for invoking the provisions of Sec. 148 of the Act inasmuch as there was no fresh material with the Assessing Officer, and the reopening was based on entire material and facts already on record. It was also pointed out that in the original assessment finalised u/s 143(3) of the Act dated 24.12.2009, the Assessing Officer specifically discussed the allowability of deduction u/s 80IB(10) of the Act in para 7 of the assessment order and, therefore, it could not be said that there was any lack of application of mind. In this manner it was sought to be pointed out that the impugned reassessment would tantamount to a mere change of opinion, which is impermissible in law. Further, the learned representative also pointed out that the reasons recorded by the Assessing Officer are on a wrong footing and therefore there is no justification for initiation of proceedings u/s 147/148 of the Act. In the course of arguments, reliance has been placed on the following decisions to assail the initiation of proceedings u/s 147/148 of the Act :- i) Sharp Designers and Engineers India Pvt. Ltd., ITA No. 525/PN/2013 dated 24.11.2014 (ITAT, ....
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....ovided in sub-clauses of the said section intends to provide deduction in respect of income from such building and construction activities. In view of the aforesaid, it is reason to believe that the income to the extent of excess grant of deduction u/s 80IB(10) of the I.T. Act 1961, has escaped assessment within the meaning of section 147 of the I.T. Act 1961. Such escapement and under assessment of income is squarely attributed to the act on the part, of assessee to claim deduction in excess of income offered under the head business and profession. In view of the aforesaid facts and circumstances of the case and reason recorded as above, the assessment completed u/s 143(3) r.w.s. 153C of the I.T. Act, 1961 on 24.12.2009 is proposed to be re- opened. Issue notice u/s 148." A perusal of the aforesaid reasons reveal that the belief of escapement of income is founded on the ground that deduction u/s 80IB(10) of the Act has been allowed excessively to the extent that it is beyond the amount of income under the head 'business or profession'. It is a trite law that 'reason to believe' referred to in Sec. 147 of the Act is one which is prudent and plausible in law and....