TaxTMI 
TaxTMI 
2024 (8) TMI 1640
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.... and subsequently selected for scrutiny, which resulted into completion of the assessment vide assessment order dated 02.12.2016 u/s 143(3) of the Act whereby the income of the Assessee was assessed at Rs.17,46,69,260/-. 3. Thereafter, the case of the Assessee was reopened u/s 147 of the Act by recording the following reasons for re-opening of assessment: ... "1. M/s Raheja Universal Pvt. Ltd. (hereinafter referred as the assessee is a private limited company. The assessee filed its return of income on 28-11-2014 declaring income at Rs. 17,03,84,550. Subsequently, the case of the assessee was selected for scrutiny and assessment u/s 143(3) of the IT Act was completed on 02-12-2016 with the assessed income of Rs. 17,46,69,260 wherein disallowance u/s 14A r.w.r. 8D of Rs. 42,85,210 was made. 2. Subsequently, it is found from the schedule 16 of the balance sheet of the assessee for the year under consideration that the assessee has finished goods in the form of flats and shops to the tune of Rs. 32,46,76,775. However, it is also found that the assessee has not shown house property income on such flats and shops. 3. The assessment record of the assessee ha....
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....n 02-12-2016 with an assessed income of Rs. 17,46,69,260. Since, 4 years from the end of the relevant 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 year under consideration has escaped assessment because of the failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the assessment year under consideration. It is pertinent to mention here that reasons to believe that income has escaped assessment for the year under consideration have been recorded above at paragraph 2,3 and 4 (supra). It is evident from the above facts that the assessee had not truly and fully disclosed material facts necessary for his assessment for the year under consideration thereby necessitating reopening u/s 147 of the Act. It is true that the assessee has filed a copy of annual report and audited P&L A/c and balance sheet along with return of income where various information/material were disclosed. However, the requisite full and true disclosure of all material facts necessary for assessment has not been made as noted above. It is pertinent to men....
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..... Accordingly, the AO vide letter dated 07.03.2022 show caused the Assessee as to why the flats should not be deemed as rented out relying upon the case laws laid down by the Hon'ble Delhi High Court in the case of CIT vs. Ansal Housing and Finance Leasing Co. Ltd. 354 ITR 180 and accordingly as to why the annual value of the same should not be taxed u/s 23(4) of the Act. 3.4 The Assessee in response to the above show cause, filed its reply dated 08.03.2022 and claimed that the earlier reply filed vide letter dated 08.02.2022 may be treated in response to the show cause notice dated 07.03.2022. The Assessee before the AO mainly claimed that it has been following "percentage completion method" of accounting consistently for the last so many years and has not changed its accounting method in previous year relevant to A.Y. 2014-15. Further, in today's realistic market conditions, it is possible that there remains unsold flats even after completion of building which remains as stock-in-trade. They will also be sold in course of time. The very fact that "percentage completion method" of accounting is prescribed for the builder in the guidelines issued by highest accounting body of th....
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....Thus, in the Assessee's case the gross municipal value is the annual value as per section 23 of the Act and various decisions have been held in favour of the municipal ratable value should be the annual value. The Assessee in support of aforesaid submissions also relied on various judgments of the highest courts as well as the Tribunal. 3.5 The AO though considered the submissions of the Assessee but not found as acceptable and ultimately made the addition of Rs.1,93,18,268/- under the head "income from house property" and added the same to the total income of the Assessee by concluding as under: "9. All the issues raised by the assessee in its letter have been discussed in detail by the Hon'ble Delhi High Court in the case of Ansal Housing Finance and Leasing Co. Ltd. 354 ITR 180 and it has been concluded in the said order that income from such property which is deemed to be let out is chargeable to tax under the head income from house property, as per the provisions of section 22 of Income Tax Act. As regards to the assessee's contentions that some units were held by it as a developer is also not acceptable in fact the assessee is owner of these units and is o....
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....indings arrived at to adopt a higher fair rental value. Accordingly, the total deemed income from house property is worked out to Rs. 1,93,18,268/- as under: Cost of property Rs.32,46,76,775/- Net ALV (8.5% of Rs.32,46,76,775/-) Rs.2,75,97,526/- Less: Deduction u/s 24A @30% Rs.82,79,258/- Deemed Income from House Property Rs.1,93,18,268/- Thus, the addition of Rs. 1,93,18,268/- is made under the head income from house property and added to the total income of the assessee. The assessee failed to offer such income in its return of income which shows its willful attempt to evade tax. In view of the fact mentioned above, I am satisfied that the assessee has furnished inaccurate particulars to conceal the income of Rs. 1,93,18,268/-. Accordingly, penalty proceedings u/s 271(1)(c) of the IT Act is initiated separately for the for furnishing inaccurate particulars of the income." 4. The Assessee, being aggrieved, challenged the aforesaid addition by filing first appeal before the Ld. Commissioner, who vide impugned order deleted the addition under consideration by observing as under: "7. All the grounds (i.e. Ground 1 to 8) are taken up togeth....
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....tion of delay has filed an application wherein it has been pleaded that the CIT(A) vide order dated 05.12.2023 has deleted the addition made by the AO vide order dated 09.03.2022 u/s 143(3) r.w.s 147 of the Act and therefore the Assessee preferred not to file any further appeal before the Hon'ble Tribunal, however, after receiving the notice and copy of Form no.36 on 18.04.2024 qua appeal filed by the Revenue Department against the relief granted in the first appeal by the Ld. Commissioner, the Ld. CA who handled the matter before the AO/Ld. CIT(A) had approached the present Counsel in the first week of January 2024 as the date of hearing in the appeal filed by the Revenue Department was fixed on 04.06.2024. After perusing the records produced, the present counsel expressed his firm view that an appeal ought to have been preferred against the order of the Ld. Commissioner challenging the reopening of the assessment by issuing the notice u/s 148 of the Act. Since no such steps were taken for the reasons stated above, .as the Department has assailed the order of the Ld. Commissioner, therefore the Assessee has been advised for filing of CO with a prayer for the condonation of delay o....
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.... 147 of the Act is squarely applicable. 11.1 Admittedly in the instant case, the Assessee by filing its return of income has duly declared its income and financials. The erstwhile AO processed the return filed by the Assessee and ultimately by passing the original assessment order dated 05.12.2016 u/s 143(3) of the Act, completed the assessment, assessing the total income at Rs.17,46,69,260/-. 11.2 The present AO, in fact considered the balance sheet etc., which were the subject matter/available before the erstwhile AO during the original assessment proceedings and while going through the schedule "Inventories" to the balance sheet observed that the Assessee company under the head "finished goods" has declared unsold inventories in the form of flats and shops, however, has not shown house property income on such flats and shops and therefore the flats should be taxed u/s 23(4) of the Act. 11.3 We further observe that the balance sheet etc. and declaring of unsold inventories in the form of flats and shops were before the erstwhile AO in the original assessment proceedings. This goes to show that there was no reason of the failure on the part of the Assessee and in fact the....