2024 (1) TMI 801

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....e re opening proceedings. Objections raised are dealt with as under:- The Assessee filed Return of Income u/s. 139(1) of the I.T. Act, 1961, admitting total income of Rs. 63,84,44,100/-. Assessment proceedings u/s. 143(3) were completed on 27.11.2019. During the course of proceedings, it was noted that the assessee had claimed an amount of Rs. 11,00,19,005/- as marketing and sales expenses. Perusal of the records indicate that the assessee had entered into an agreement with M/s.Express Exclusive whereby company had agreed to develop the land acquired by eedpl by constructing residential apartments and selling the same. The company had undertaken to do so this entire activity at its own cost, risk and responsibility. The agreement intends to develop upto 6 blocks together with its requisite amenities with a total 6 blocks. Spanning over a saleable area about 4.28 acres total built up area is 9.25 sq.ft. to be sold as residential apartment. It is noted that in pursuance to this agreement, the assessee had incurred certain expenditure which are claimed as Model Flat and new sales office expenses and marketing expenses Express exclusive. Total expenses claimed amounts to Rs. 11,0....

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....ng cost of mall and office complex. It is further claimed that during the year, assessee had finance from consortium of banks led by the Axis Bank Private Limited, which funded the project to HDFC Bank Limited. It is assessee's contention that such charges are expenses for switching over of loans. The assessee's objection on this issue is not acceptable. Notes forming part of the financial statement has mention about these expenses as attributed to the Express exclusive project. Since such costs are directly attributed to the project where no income was recognized, all expenses including financial cost should have been capitalized. As such, it is held that the claim of such expenditure against the Revenue Receipt is improper. The income has escaped assessment to the extent of adjustment of such expenditure. The assessment was reopened on the above mentioned factual position. During the course of reopening proceedings, the Assessing Officer had judiciously examined the issues and applied his mind. In view of the above discussion, the assessee's objection stands rejected." 3. The specific case of the petitioner is that the petitioner filed a regular Return of Inc....

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....tiny Assessment Order dated 27.11.2019. 10. Hence, it is submitted that the reopening of the assessment and overruling of the petitioner's objection to reopening of the objection vide Impugned Order dated 04.02.2022 is liable to be interfered and is therefore liable to be set aside. 11. The learned counsel for the petitioner submits that on the second issue, the view of the Delhi High Court in the case of Commissioner of Income Tax vs. Gujarat Guardian Limited, [2009] 177 Taxman 434 (Delhi), which has been affirmed by the Hon'ble Supreme Court reported in (2020) 107 CCH 0133 ISCC; Civil Appeal No.7615 of 2009 with Civil Appeal No.2414 of 2010 dated 14.01.2020. 12. It is submitted that this view has also been followed by the Hon'ble Division Bench of this Court in Commissioner of Income-tax Corporate Circle 3, Chennai vs. Thiru Arooran Sugar Limited, [2021] 130 taxmann.com 113 (Madras). 13. Hence, the learned counsel for the petitioner submits that even otherwise on this count reopening of the assessment in respect of the amounts paid towards processing charges of loan and re-closure charges paid for loan has been rightly allowed and there is no scope for reopening of th....

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....learned counsel for the petitioner and the learned counsel for the respondent. 22. The reasons furnished for reopening the assessment vide Notice dated 30.04.2021 issued under Section 143(2) read with Section 147 of the Income Tax Act, 1961 reads as under:- "Issues as per reasons recorded for reopening:- On verification of the records, it is seen from (Note-24- Other Expenses) of Notes forming part of Financial statement that the company has entered into an agreement with Express Exclusive Developers Private Limited (EEDPL), whereby the company has agreed to develop the land acquired by EEDPL, by constructing residential apartments and selling the same. The company has undertaken to do this entirely at its own cost, risk and responsibility as part of its own business, and EEDPL will be entitled to all the amounts realized for transfer of undivided interest in the said land. The agreement is to develop up to 6' block together with requisite amenities with a (Total 6 Blocks). Spanning over a saleable area about 4.28 acres total built up area is 9.25 lacs sq.ft. to be sold as residential apartment. It is also seen from the P&L account that the following expenses is debited ....