TaxTMI 
TaxTMI 
2011 (12) TMI 803
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....rn of income for Assessment Year 2008-09 on 29 September 2008, declaring a total income of Rs. 20.33 lakhs. A revised return of income was filed on 3 October 2008, declaring an income of Rs. 19.14 lakhs, as depreciation under the Income Tax Rules remained to be reduced from the gross total income. The Petitioner is a member of an Association of Persons (AOP) by the name of Fortaleza Developers and was in receipt of an amount of Rs. 14.18 crores which was claimed to be exempt under Section 86 read with Section 167B. The Petitioner received from the AOP an amount comprised of 35% of the gross receipts received by the AOP from the sale of flats. No expenses relating to the business of the AOP were deducted from the share of receipts given to t....
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.... was recorded. The Director of the assessee stated that development rights being precious, the assessee did not want the returns from its business to be exposed to the inherent risks of business and hence, to safeguard those rights, a formula was devised by which the assessee came to be entitled to 35% of the gross receipts out of the sale of flats in the AOP. 4. The reasons for reopening the assessment were intimated to the Petitioner on 18 May 2010. The Petitioner filed objections on 7 February 2011 which have been disposed of by an order dated 14 July 2011. 5. Counsel appearing on behalf of the Petitioner submitted that: (i) The ground for reopening the assessment, though within four years, is substantially similar to the ground th....
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....t, but a revenue sharing agreement; (ii) The Assessing Officer has tangible material on the basis of which the assessment could be reopened for Assessment Year 2008-09. Under Section 67(2), the share of a member in the income of an association of persons, computed under sub-Section (1) has to be apportioned for the purposes of assessment under various heads of income in the same manner in which the income of the association under each head has been determined. The profit and loss account of the assessee for Assessment Year 2008-09, reflected that an amount of Rs. 14.18 crores was a share of profits from the AOP. The assessee has failed to disclose to the Assessing Officer all the relevant facts and circumstances. The reopening of the assess....
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....f the gross receipts from the sale of flats against the development rights surrendered by the assessee in land. The Assessing Officer has postulated that the income received by the assessee from the AOP is not a share of profits, but consideration received against development rights sold/surrendered. Now the order of assessment that has been passed by the Assessing Officer on 29 December 2010 in the case of the AOP forms part of the record of these proceedings. The order of the Assessing Officer pertaining to the AOP contained a separate discussion on the sharing of revenue and income. The Assessing Officer has noted as follows: It may be seen from the above that M/s. Sanad Properties Pvt. Ltd. is entitled to 35% of gross sale proc....
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....essing Officer noted that the benefit of a deduction under Section 80IB(10) is available to profits derived from a housing project subject to certain conditions. 9. The Assessing Officer has tangible material on the basis of which he could proceed to reopen the assessment for Assessment Year 2008-09. This is not a case merely of a change of opinion. The Assessing Officer was in our view within jurisdiction in forming the belief that income chargeable to tax has escaped assessment. Even according to the AOP, the total profit is in the vicinity of Rs. 22.08 crores. The assessee has claimed a receipt of Rs. 14.18 crores as a share of profits. According to the Assessing Officer, this represents 35% of the gross sale proceeds and is evidently....