TaxTMI 
TaxTMI 
2016 (9) TMI 764
X X X X Extracts X X X X
X X X X Extracts X X X X
....by the Assessing Officer, during which, he raised several queries and the petitioner replied to the same. The Assessing Officer passed order of assessment under section 143(3) of the Act on 15.11.2006 determining the total income of assessee at Rs. 1.71 lakhs. In such assessment order, the Assessing Officer considered and granted the deduction under section 80IB(10) of the Act as claimed. However, by applying the MAT provision of section 115JB of the Act, the said assessment was framed. 3. In order to reopen such assessment, the Assessing Officer issued notice, which as can be seen, was done beyond the period of four years from the end of relevant assessment year. For issuing the notice, the Assessing Officer had recorded the following reasons: "In this case, the assessee company filed the return of income for the A.Y. 2004-05 on 31/10/2004 declaring total loss of Rs. 28,43,830/-. The assessee company is engaged in the business of civil construction. In the return of income, the assessee company had claimed deduction u/s. 80IB(10) of the Act of Rs. 10,12,56,034/-. The return filed was processed u/s. 143(1) of the Act on 07.02.2005 on the returned income. The assessment ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ven after getting BU permission, BU permission was issued on 5.5.03 for Maniratnam I and 23.09.03 for Maniratnam II. The BU permission issued was in the name of society for which the development work was done. (v) As against No.28(b) of 3CD report filed with the return of income, the C.A. Has stated that the company is carrying on only construction activities. The raw materials for the construction activities were procured by the cooperative society which has given this order to the company. As the company does not purchase any raw materials, the quantitative details cannot be given. (vi) As against item No.19 of 3CD report, the CA has certified that the gross booking receipts received included the cost of extra work and booking made by the society on behalf of the company and the amount included the cost of land and reimbursement of expenses incurred for purchase of raw materials. (vii) The development permission issued by Ahmedabad Municipal Corporation mentions the society as owner and the assessee as developer in respect of Maniratnam I (51 units) and the owner as the society in respect of Maniratnam II (92 units) without mentioning the name of the as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....9.08.2011 by the Assessing Officer. Hence, the petition. 5. From the materials on record and in particular, the reasons recorded by the Assessing Officer, it can be seen that the claim of the assessee for deduction under section 80IB(10) of the Act was the principle claim in the return which the Assessing Officer had accepted after scrutiny. The reason for reopening was that according to the Assessing Officer, such claim was not allowable. In background of such facts, counsel for the petitioner raised following contentions: I. There was no failure on the part of the assessee to disclose truly and fully all facts. II. The Assessing Officer did not have any new material establishing that there has been escapement of income. III. The entire claim of deduction under section 80IB(10) of the Act was minutely examined by the Assessing Officer during the original assessment. IV. The Assessing Officer has relied on an explanation added to the statute with retrospective effect, which cannot be the ground for reopening of the assessment beyond four years. V. Even on merits, the Assessing Officer cannot disturb the claim of the assessee for deduc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee has further claimed loss of Rs. 27,84,880/-and the same cannot be allowed, as the deduction u/s. 80IB is to be allowed only upto the total income available and hence, the assessee was asked to state as to why deduction u/s. 80IB should not be restricted upto the total income. In response to this, the assessee has, vide its letter dated 16.10.2006, submitted as under: ... ... 4. The reply filed by the assessee company has carefully been considered, but in view of assessee's own admission and the specific provision of section 80A(2) of the Act, which mentions that the aggregate amount of deduction under chapter VIA should not exceed the gross total income of the assessee, the loss claimed by the assessee is hereby disallowed. Accordingly the returned income is treated as Nil." 10. Thus, the entire claim of deduction came up for consideration at the hands of the Assessing Officer in the original assessment. The claim was minutely examined and only thereafter accepted. It would therefore not be permissible to the Assessing Officer to disturb such claim in exercise of powers under section 147 of the Act that by issuing the notice beyond the peri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....deducted would not be conclusive proof of the relationship between the parties. 12. Several issues concerning the deduction under section 80IB(10) of the Act came up for consideration before this Court in case of Commissioner of Income-Tax v. Radhe Developers, reported in [2012] 341 ITR 403 (Guj), in which, following observations were made: "30. The essence of sub-Section (10) of Section 80IB, therefore, requires involvement of an undertaking in developing and building housing projects approved by the local authority. Apparently, such provision would be aimed at giving encouragement to providing housing units in the urban and semi-urban areas, where there is perennial and acute shortage of housing, particularly, for the middle income group citizens. To ensure that the benefit reaches the people, certain conditions were provided in sub- Section(10) such as specifying date by which the undertaking must commence the developing and construction work as also providing for the minimum area of plot of land on which such project would be put up as well as maximum built up area of each of the residential units to be located thereon. The provisions nowhere required that only thos....