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2013 (11) TMI 933 - AT - Income TaxReassessment of proceedings - Notice u/s 148 - Whether there are enquiries conducted by the AO into the issue of nature of business activities of the assessee for the year under consideration - Held that:- Assessee submitted various details regarding to the commencement of the business relating to the paid-up capitals, expenditure incurred, income earned, services rendered etc in respect of the rest of the questions in the questionnaire. Assessee does not have any fresh or tangible material which works out as a “livewire” to the AO to form an opinion or create a reason to believe that there is concealment of income. It is also obvious from the written reasons mentioned by the AO that the basis for re-opening is essentially the product of the “perusal of the assessment records”. Therefore, issue of notice u/s 148, under the circumstances and the details mentioned above, is not proper and not in tune with the settled position in law relating to the provisions of section 148 of the Act - Decided in favour of assessee. Setup and commencement of the business activity - Development of airport infrastructure activity - Held that:- Feasibility reports both financial and economic viability is not yet obtained, preparation of development plans is not yet complete, mandatory Environmental Impact Study under Environment Protection Act, 1986 by SICOM is not yet complete and 100MW captive power plant is also at preliminary stages. Thus, the assessee has not completed the stages, which are considered elementary to start the business - Aassessee is yet to obtain the environmental clearance under the Environment Protection Act and favourable feasibility reports – On financial and technical fronts, assessee has yet to obtain the approved plans of development, therefore, the business of the development of airport infrastructure cannot be declared “set up” in this year under consideration. Acquiring of land with a stroke of pen of the Government of Maharashtra cannot be attributed to the business activity of the assessee. What has happened in this year in substance is mere appointment of SICOM, YASHADA, M/s Scott Wilson Kirkpatric India Pvt Ltd, other consultants for various other purposes, which constitutes stages prior to the “set up” of the business of the assessee. Therefore, in our opinion, the conclusions of the CIT(A) that the main business is not commenced in the year under consideration does not call for any interference. Reopening of assessment, for AY 2005-06, is bad in law though the interest receipts are chargeable to tax under section 56 of the Act, since the business of the assessee cannot be stated to have commenced in the year under consideration but in the ultimate analysis the appeal filed by the assessee has to be treated as allowed. - Decided in favor of assessee.
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