TaxTMI 
TaxTMI 
2022 (3) TMI 618
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.... of income u/s 139 of the Income Tax Act, 1961 ('the Act') for the assessment year 2008-09 was originally filed on 13.10.2008. Against the said return of income, the assessment was completed by the Dy. Commissioner of Income Tax, Circle-2, Pune (Assessing Officer') vide order dated 29.12.2010 passed u/s 143(3) of the Act accepting the returned income and allowing deduction u/s 80IB(10) of Rs. 6,96,40,134/-. Subsequently, the Assessing Officer issued notice dated 31.03.2015 u/s 148 proposing to re-assess the income for the assessment year 2008-09 and calling upon the appellant to file the return of income. The reasons recorded for issuance of notice u/s 148 are extracted below :- "1. The assessee engaged in the construction of resid....
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....requested for providing reasons recorded for reopening the assessment. Against the said return of income, the reassessment proceedings was completed by the Assessing Officer vide order dated 05.02.2016 passed u/s 147 r.w.s. 143(3) of the Act assessing the total income of Rs. 2,76,54,400/-. While doing so, the Assessing Officer brought to tax the interest income of Rs. 2,65,53,465/- under the head 'Income from other sources' while allowing the deduction u/s 80IB(10) of Rs. 6,96,40,134/-. 4. Being aggrieved by the above assessment order, an appeal was filed before the ld. CIT(A) challenging the validity of reopening of the assessment on the ground that the assessment was sought to be reopened on mere change of opinion on the very same set ....
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....ade to the sister concerns. Further, it was pleaded that interest earned on loans and advances made to the sister concerns is eligible for deduction u/s 80IB(10) placing reliance on the certain judicial precedents. 6. The ld. CIT(A), on due consideration of the submissions, had upheld the validity of the reassessment proceedings by holding that the reassessment proceedings were initiated by the Assessing Officer based on the information received from audit party placing reliance on the decision of the Hon'ble Supreme Court in the case of Larsen & Toubro Ltd. vs. State of Jharkhand, 79 taxmann.com 267 (SC) held that the audit objection constitutes the information which forms part of the fresh tangible information enabling the Assessing Of....
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.... from HUDCO should be set-off against the interest income earned on the loans and advances made to the sister concerns. 11. On the other hand, ld. Sr. DR submitted that the audit objection constitutes a fresh information, which enabled the Assessing Officer to form an opinion that income escaped assessment to tax placing reliance on the decision of the Hon'ble Supreme Court in the case of P.V.S. Beedies (P.) Ltd. (supra). He further submitted that the appellant has filed untrue facts before the Assessing Officer at the time of original assessment by claiming setoff of the interest expenditure incurred against the interest income. The falsity of the information was exposed by the audit party. Thus, it was submitted that there was failure ....
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....ho pointed out that the interest income earned on the loans & advances made to the sister concerns should be assessed under the head 'Income from other sources' without setting off any interest expenditure. This information in the form of audit objection had enabled the Assessing Officer to form an opinion that the income got escaped assessment to tax. The Hon'ble Supreme Court in the case of P.V.S. Beedies (P.) Ltd. (supra) had laid down that an audit objection constitutes information. Therefore, the contentions that there was no fresh tangible material brought on record by the Assessing Officer cannot be accepted. Secondly, as regards to the second contention of the appellant that there was no failure on the part of the assessee to disclo....
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....ction. Thus, we do not find any merit in the contentions raised by the assessee challenging the validity of the reassessment proceedings. Therefore, we uphold the validity of the reassessment proceedings. Accordingly, the ground no.1 stands dismissed. 13. The ground nos.2 and 3 challenges the action of the lower authorities in assessing the interest income earned on the loans and advances made to the sister concerns under the head 'Income from other sources'. It is an admitted position that the interest expenditure was incurred on loans borrowed from HUDCO for the purpose of housing project. The contention of the appellant that the loans and advances were made to the sister concerns for the business purpose and out of business expediency....