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2013 (11) TMI 809 - AT - Income TaxReopening of assessment u/s 147 - Notice u/s 148 - Bar of limitation - Held that:- The assessment was reopened after expiry of four years from the relevant assessment year. Therefore, the proviso to sec. 147 is applicable on this case. The mandatory condition for reopening of the assessment after the expiry of 4 years from the end of the Assessment Year is that there is failure on the part of the assessee to disclose fully and truly all the relevant material facts necessary for the assessment - It is clear from the reasons given in the reassessment order that the assessment was reopened on two grounds i.e. method of accounting and non admission of rental income. As regards the method of accounting is concerned, the Assessing Officer has duly accepted the profit on work-in-progress declared by the assessee in the original assessment as well as in the subsequent years. Thus, it is clear that the assessee has been following the percentage completion project method of accounting and accordingly declaring the profit. In the original assessment order passed u/s 143(3), the Assessing Officer has duly recorded and acknowledged the facts that the assessee is declaring profit of work-in-progress method. Therefore, undoubtedly there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment on this issue. As regards the non offering of rental income is concerned, the Assessing Officer has recorded in the reasons that the assessee has shown the bungalows in question in the balance sheet and no new material or information came to the knowledge of the Assessing Officer after the completion of the assessment u/s 143(3). The Assessing Officer accepted the fact that the assessee has already shown the rental income in the P&L account. Therefore, the reasons regarding reopening on this issue is vague so far as the rental income in respect of the bungalow at Belapur has been duly offered to tax by the assessee as the same was shown as income in the P&L account. Thus, the reasons for reopening on this issue is contrary to the fact that has already existed on record. Thus, in the absence of any new tangible material as well as failure on the part of the assessee to disclose duly and truly all material necessary for assessment, the reopening on this issue is not permissible after expiry of four years as the same is hit by the proviso to sec. 147 of the act. The Commissioner of Income Tax(Appeals) has already decided this issue in favour of the assessee subject to verification. Hence, both the issues on merit were decided in favour of the assessee by the CIT(A). Therefore, the reopening on such issue is not sustainable, particularly in the facts of the present case - Decided in favour of assessee.
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