TaxTMI 
TaxTMI 
2025 (2) TMI 875
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....etitioner is engaged in the business of real estate and has filed his return of income on 27 September 2013 declaring total income of Rs.54,91,960/-. On 31 December 2015, an assessment order under Section 143 (3) of the Act came to be passed accepting the return income. Proceedings u/s 263 : 4. On 29 November 2017, a notice under Section 263 of the Act came to be issued by the Commissioner of Income Tax on the ground that M/s. Orchid Builders and Developers has sold 6 flats on behalf of the petitioner for Rs. 2,74,94,950/-. However, the same is not reflected in the profit and loss account for the year ending 31 March 2013. The notice further seeks to examine disallowance on account of interest payment and proposes to examine income from house property which was not offered for tax. The petitioner filed his reply to the said show cause notice vide letter dated 1 March 2018. On 16 March 2018, an order under Section 263 was passed by the Commissioner of Income-tax setting aside the assessment order with a direction to conduct proper inquiries, investigation and examine all the issues raised in 263 notice and pass a fresh order. Pursuant to the said direction, Assessing Officer o....
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....eing no fresh material to reopen the case, the impugned proceedings were bad-in-law. 8. Ms. Pawar further submitted that the issue for which reopening is sought was subject matter of not only proceedings under Section 263 of the Act but also an order passed pursuant to the directions under Section 263 of the Act and, therefore, the impugned proceedings are based on change of opinion. She further submitted that the reliance placed by the respondent on the Supreme Court's decision in the case of Kalyanji Mavji & Co. (supra) is no more a good law as per the decision of the Supreme Court in the case of Indian & Eastern Newspaper Society Vs. Commissioner of Income-tax (1979) 2 Taxman 197 (SC). Therefore, she submitted that the impugned notice should be quashed. 9. In support of her submissions, she relied upon the following case laws :- i. ACIT, Circle 12(3)(2) Vs Marico Ltd. (2021) 133 taxmann.com 122 (SC). ii. CIT, Delhi Vs Kelvinator of India Ltd. (2010) 187 Taxman 312 (SC). iii. PCIT Vs State Bank of India (2022) 145 taxmann.com 33 (SC) iv. State Bank of India Vs ACIT, Circle 2(2)(1), Mumbai (2019) 103 taxmann.com 164 (Bombay) v. IT....
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....of Orchid Builders and Developers clearly states the terms and conditions between the assessee and Orchid Builders and Developers that assessee an investor will own 38 flats (50%) from the said building without any expenses in addition to Rs. 2,30,00,000/- as settlement compensation from Orchid Builders and Developers to assessee. In view of the above, it is clear that assessee did not incur any expenses against the receipt of Rs. 2,74,94,950/- from sale of six flats. The entire income should have been taxed in the hands of the assessee, as out of 38 flats, 6 flats have been sold during the year and the closing stock has been shown at Rs. 1,66,88,066/- from which it can be presumed that out of total 38 flats only a few flats are remaining to be sold which has been shown as closing stock. From the above, it is clear that assessee has already sold out major portion of the flats out of 38 flats owned by him and receipt from remaining flats is not offered by the assessee. Therefore, the receipts of Rs. 2,74,94,950/- should have been fully offered for taxation, since the assessee has not incurred any expenses on the same. It is further observed that CIDCO had ....
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....atil wife and his son Shri Rahul D. Patil are all partners of M/s. Orchid Builders & Developers. 1 Interest expenses not allowable On perusal of the Balance Sheet, it is seen that the assessee has debited interest paid of Rs. 15,69,923/- against unsecured loan. On perusal of the balance sheet it is seen that an amount of Rs. 5,23,44,852/- has been received by the assessee from customers and the same is lying with the assessee at his disposal whereas assessee has shown unsecured loan of Rs. 2,18,68,679/- against which interest of Rs. 15,69,923/- has been paid. From the above, it is clear that assessee does not require any unsecured loan for the purpose of current ongoing project. The balance sheet also shows an amount of Rs. 2,30,94,340/- as Loans and Advances and no interest from this loan and advances has been earned during the year. The case has been selected for scrutiny under CASS for the reason "large increase of unsecured loan". Assessee's current assets including loans and advances is shown at Rs. 9,30,42,313/-. Accordingly, the interest paid of Rs. 15,69,923/- is not related to the expenses of the project under consideration and no nexus of interest ex....
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....-, whereas in the P&L account the assessee has debited Rs.57,73,464/- as contract charges. Thus, there is a difference of Rs.39,93,436/- which has not been explained by the assessee. No details in this regard are placed on record (copy of Form 3CD and P&L account are enclosed). Further, no TDS has been deducted on this payment, being the first year of audit. The P&L account of Smt. Rajani D. Patil and Shri Rahul D. Patil does not show any such receipts from the assessee in the form of contract, as claimed by the assessee. 1. Office rent claimed in spite of having own premises As per Schedule Á of fixed assets, the assessee owns office valued at Rs. 17,42,000/-. In the P&L account the assessee has debited office rent at Rs. 6,24,100/-. In spite of owning an office, the assessee has debited office rent of Rs. 6,24,100/-, no explanation or proof in respect of the same is on record. 1. Undisclosed income on sale of flat It is observed that the assessee has sold 6 flats during the A.Y. 2013-14. On perusal of the record for A.Y. 2014-15, it is seen that the assessee has sold 5 flats and the closing stock stands at nil which shows that the assess....
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....ng financial interest in any entity) located outside India :- 2. Applicability of the provisions of section 147/151 to the facts of the case :- Assessee filed return of income for A.Y. 2013-14 on 27/09/2013 declaring total income at Rs. 54,91,960/-. Assessment u/s. 143 (3) was completed on 31/12/2015 accepting the returned income. Since four years from end of relevant assessment year has expired in this case, the requirements to initiate proceeding u/s 147 of the Act are reason to believe that income for the F.Y. 2012-13 relevant to A.Y. 2013-14 has escaped assessment because of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for A.Y. 2013-14. It is pertinent to mention here that reasons to believe that income of Rs. 3,39,61,096/- has escaped assessment for A.Y. 2013-14 have been recorded above (para 6 above). I have carefully considered the assessment records containing the submissions made by the assessee in response to various notices issued during assessment proceedings and have noted that the assessee has not fully and truly disclosed the material facts necessary for his assessment....