TaxTMI 
TaxTMI 
2019 (12) TMI 696
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....he case as well as law on the subject, the learned Commissioner of the Income Tax has erred in violating the principles of natural justice by not the mentioning the grounds for initiating action u/s.263 of Income Tax Act, 1961 in the show cause notice issued. As such the order passed u/s.263 is void ab-initio. The action of the Ld. CIT was wholly unreasonable, uncalled for the bad in law. 4. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of the Income Tax has erred in not passing a speaking order against the submissions of your appellant. As such, the order passed u/s.263 is void ab- initio. The action of the Ld. CIT was wholly unreasonable, uncalled for the bad in law. 5. On the facts and in the circumstances of the case as well as law on the subject, that the order of u/s.263 is merely 'change in opinion The order u/s. 143(3) r.w.s,153A passed by the Ld AO does not in any way represent erroneous order. The action of the Ld. CIT was wholly unreasonable', uncalled for and bad in law. 6. On the facts and in the circumstances of the case as well as law on the subject, The learned Co....
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....proceedings, assessing officer issued the show cause notice u/s. 142(1) dated 19.02.2016 requiring the source of the disclosure made in the project Rishikesh of Rs. 2,07,03,663/- and project Township of Rs. 7 crores vide point No.1 of Show Cause Notice . The assessing officer further required the assesse to furnish the source of the fund of Rs. 18,79,58,511/- invested in land and how it was reflected in the books of accounts of the firm vide point No.5 of Show Cause Notice . The relevant portion of the show cause notice is reproduced as under: "5. Kindly refer to the Sauda Chitthi found and seized during the search proceedings from the resident partner Shri Rajesh Vaghani. You furnished part reply and stated that Sauda Chithi was cancelled because the seller party was not able to remove unauthorized occupant of land, hence the land was purchased directly from the land owners and firm has paid Rs. 18,23,19,011/- towards conversion of land from Agricultural to Non Agricultural land and removing the unauthorized occupants. Further, you stated that except Rs. 56,39,500/- (Amount by which the land was registered in the Registrar Office in the name of Shri Popatbhai kakadi) rema....
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....s account was kept in the records. Regarding the point no. 6 of Show Cause Notice, it was stated that the amount of Rs. 2,44,85,900/- was the part of receipts of Rs. 66,72,18,402/- mentioned in the alleged seized paper. Regarding the point no. 7 of Show Cause Notice it was stated by the assesse that the initial investors from whom assesse took the fund for purchasing and removing unauthorized occupants of the land were paid out of the booking amount. 8. In the course of assessment proceedings the strong reliance was placed on section 279C by tendering the following explanation: "Hence the question of doubting the veracity of seized material does not arise. Income tax is on actual income and the paper as seized depicts the actual profit earned by the assessee. The correctness of the document seized cannot be doubted and more so by the department as per Sec.292C which armors the presumption that the seized material is correct and hence cannot be doubted. When the statue itself proves a deeming provision regarding the veracity of the seized material, the question of doubting or providing corroborative evidence does not arise, more so when the same paper is the bas....
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....idered to be true as per presumption contained u/s. 132(4A) and S. 292C.The presumption contained u/s. 132(4A) and 292C can also be used for the benefit of the assessee and not only for the benefit of the Department, revenue cannot just adopt the Pick and choose method. The reliance is placed on the decision of Delhi High Court in case of CIT Vs. Indeo Airways Pvt/Ltd[(2012) 26 Taxmann.com 244 (Del)], Vivek Kathotia Vs. DCIT [IT(SS) No. 1to7 &10/ Kol/2011 (Kol Trib )], Gem Superstructures Pvt Ltd. vs. DCIT [ITA No. 15/bang/2014 (Bang Trib)].The proviso to Section 69C cannot be applied as the deduction of expenditure was claimed against the receipts of construction project even PCIT has not doubted the source of the disclosure and therefore proviso to section 69C is not applicable. The reliance is placed on the decision of DCIT vs. Radhe Developers [(2010) 329 ITR 0001 (Guj)]. So it can be appreciated that assessing officer has accepted the investment of the land of the of Rs. 18,79,58,511/- after considering the explanation filed by the assessee and on the basis of the finding of the seized materials in the course of search proceedings. The action of the search is the highest kind ....
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....y and in fact where the Id. PCIT is of the view that AO had not undertaken any inquiry, it becomes incumbent on the PCIT to conduct such enquiry. The reliance is also placed on the decision of ITO vs. DG Housing Projects Limited [343 ITR 329] (Del HC)] and Indus Best Hospitality & Realtors Pvt Ltd. vs. PCIT [ITA No. 3125/mum/2017 (Mum Trib)]. 13. The assessing officer has taken the view in favour of the assessee as per the law and the materials available with him. Even if it is assumed that "two views" are possible and assessing officer has adopted one of the views in favour of the assessee, the assessment order cannot be revised u/s. 263 as held by Honourable Supreme Court in case of Malabar Industrial Co. v/s. CIT - 243 ITR 0083 (SC). The decision of the Supreme court was followed in the case of CIT vs. Max India Ltd. - 295 ITR 0282 (SC) and by the Gujarat High Court in the case of CIT vs. Arvind Jewellers - 259 ITR 0502.The reliance is also placed on the decision of Bombay High Court in the case of CIT v/s. Nirav Modi - 390 ITR 0292 (Bom.) where it was held that "the satisfaction of the assessing officer on the basis of the documents produced is not shown to be erroneous in t....
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....ited by the party. As per facts of the present case the assessment u/s.143(3) r.w.s. 153A of the I.T.Act for the year under consideration was finalized on 28.03.2016 determining total income of the assessee. The assessee is in the business of business of builders and developers and developed the project in the name and stile of "Rushikesh", "Vaishnodevi Township" and "Ideal homes". The assesse filed the detailed reply in the course of assessment proceedings through various letters explaining the point no. 1, 5 to 7 of Show Cause Notice. In regard to the point no. 5 of Show Cause Notice which is subject matter of proceedings u/s. 263 of the Act assessee filed the detailed explanation in the form reply vide letter dated 09.06.2016. 19. The ld.Pr.CIT took action u/s. 263 by issuing show cause notice on 05.12.2017. Assessee filed detailed reply vide letter dated 09.01.2018. The Id. PCIT was not satisfied with the reply of the assesse and he held that the assessment order respect of Rs. 18,79,58,511/- as held by him. 20. After having heard the Counsels of both parties at length and after perusal of the documents placed on record before us, as well as the judgments cited by both th....
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....y the assessing officer. Even this is not the case of inadequate inquiry as the assessing officer made the due inquiry by considering the seized materials and explanation of the assessee. Even the Pr. Commissioner of Income Tax has reproduced the explanation filed by the assessee on 01.03.2016 to explain the source of the payment of Rs. 18,00,00,000/- in his order passed u/s. 263 but he has not rebutted the explanation in his order. The Pr. Commissioner of Income Tax has accepted the source of the receipts being from the Projects, although he doubted the source of the expenditure. The source of expenditure is apparently the business receipts from the projects. The reliance is placed on the following decisions: vii. CIT v/s. Amit Corporation - 81 CCH 0069 (Guj.) viii. PCIT vs. Harmony Yarns Pvt Ltd.[Tax Appeal No. 282 of 2016 (Guj.)] ix. CIT vs. Fine Jewellery Ltd. [372 ITR 303] (Bom.) x. CIT vs. Ganpat Ram Bishnoi [296 ITR 0292] (Raj.) xi. PCIT vs. Shree Gayatri Associates [(2019)] 106 taxmann.com 31 (SC)] xii. Indus Best Hospitality & Realtors Pvt Ltd. vs. PCIT [ITA No. 3125/mum/2017 (Mum Trib)] 21. The assessing officer has....