2018 (5) TMI 1441

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....s partner of various firms, which firms are engaged in the activity of development of real estate and construction. For the assessment year 2010-11, the assessee had filed the return of income on 31.03.2011 declaring total income of Rs. 14,33,540/. Such return was taken in scrutiny by the Assessing Officer. He passed the order of assessment under section 143(3) of the Income Tax Act, 1961 ('the Act' for short) on 28.03.2013. To reopen such assessment, the impugned notice came to be issued, which as can be seen, was done beyond the period of four years from the end of relevant assessment year. In order to do so, the Assessing Officer had recorded following reasons: " The assessee has filed his return of income for A. Y. 201011 decl....

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....ion to the exempt income were not disallowed in terms of the provisions of section 14A of the Act read with Rule 8D of the Incometax Rules. The amount required to be disallowed u/s.14A r.w.r. 8D of the Rules works out as under: Total interest paid during the year on unscecured loan   Rs.13,33,951/- Average investment (investment in two firms) 0+105862909 2 Rs.5,29,31,455/- Average total assets 0+118372482 2 Rs.5,91,86,241/- Interest * Average Investment Average total assets 1333951 * 52931455 59186241 Rs.11,92,797/- Add : ½ % of Average investment (b) ½ % * 52931455 Rs.2,64,657/- Note since opening balance of investment and total assets were not available, the same was taken as nil. In view of the abov....

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....see. Only notice issued by the department was one issued by the respondent no.2 herein. 7. In facts of the present case, we are not required to go into the question of one or more notices having been issued by the departmental authorities. We may straightway examine the validity of the reasons recorded by the Assessing Officer for issuing the notice. 8. Analysis of the reasons recorded would show that the Assessing Officer has pressed in service three separate reasons. In his first such reason, he points out that the assessee had shown profit from M/s.Satyam Gokul Corporation of Rs. 7.65 crores (rounded off). Satyam Gokul Corporation had declared profit of Rs. 32.00 crores (rounded off). The assessee's share being 20% thereof, the fig....

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.... From M/s. Satyam Gokul Corporation 44799993.37 TOTAL 77097237.17 11. The petitioner has also produced the returns of the said two firms Satyam Gokul Corporation, Ahmedabad and Satyam Gokul Corporation. The returns of both these firms show matching figures. For example, in case of Satyam Gokul Corporation, in return, the gross profit shown was Rs. 32 crores. Profit after depreciation was shown at Rs. 22.40 crores. This profit was distributed to the partners in the proportion of their share. The assessee having 20% share, received Rs. 4.47 crores. 12. Similarly, the return of income filed by Satyam Gokul Corporation, Ahmedabad, showed profit of Rs. 23 crores. Profit after depreciation came to Rs. 15.89 crores. The assessee having 20% sh....