2023 (11) TMI 639

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....pandemic and accordingly, the delay is condoned and admitted the appeal for adjudication. 3. Brief facts of the case are that the assessee society manually filed its return of income on 20.05.2013. The Assessing Officer has noticed from the return that the gross income of the assessee as per its Income & Expenditure (I & E) account was Rs..50,95,835/-. However, a perusal of the balance sheet of the assessee, along with its I & E account, the Assessing Officer has noted that the assessee has derived gross income of Rs..3,72,40,466/-. This income consists of two items, viz., (a) fees collection: Rs..50,95,835/- and (b) profit on sale of Thangam colony property: Rs..3,21,44,631/-. The assessee was found to have incurred revenue expenditure of....

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....fault by the assessee on the date of hearing, viz., 26.03.2015. Still, the assessee has not responded, even to this reminder letter. Hence, the Assessing Officer has completed the 'best judgement assessment' under section 144 of the Act dated 20.05.2013 assessing the income of the assessee at Rs..3,28,37,842/- after making various additions. 4. After filing of appeal before the ld. CIT(A), the assessee submitted before the Assessing Officer a petition under section 154 of the Act along with a copy of the registration certificate under section 12AA of the Act dated 16.05.1985 requesting for rectification of the assessment order. Accordingly, the Assessing Officer passed a rectification order under section 154 of the Act dated 19.05.2016....

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.... including the written submissions filed before the ld.CIT(A). The case of the assessee is that the depreciation could not have been denied since the Hon'ble Apex Court had allowed depreciation despite the fact that the assets concerned were claimed towards application of income in the earlier years. It is also the case of the assessee that such depreciation has been claimed in the manner prescribed under section 32 of the Act following the principle of block of assets. It was pleaded that under such principle of block of assets, any sale of any assets has to be reflected only within the block and hence the sale of property at Thangam colony had been reflected in the block of assets of Padi school. The AR of the assessee further pleaded tha....

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....opening WDV of Rs. 1,80,06,371/-. In other words, there is no acquisition of any new asset. As per the written submission filed on 22.01.2020, the amounts were stated to be utilized for improvement and acquisition of other fixed assets. However, there is no acquisition of any new fixed assets. The conditions as laid down in sub section (1A) of Sec.11 stood violated and hence such amount cannot be included for the purposes of arriving at "application of income". Thus, the AO's inclusion of profit on sale of property at Thangam colony for arriving at the gross receipts and also for not considering the said amount for the purposes of arriving at application of income, both are correct. Sec.11(1A) being violated, the impugned amount cannot be c....