Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (10) TMI 1523 - AT - Income TaxRe-opening of assessment u/s. 147 / 148 - Held that:- The assessee filed its return of income on 27/09/2009 declaring total income at ₹ 1,70,61,600/-. The Assessing Officer (AO) completed the assessment u/s 143(3) on 30/12/2011 assessing the total income at ₹ 12,25,11,130/-. After giving effect to the order of the CIT(A), the AO revised the total income to ₹ 2,28,60,465/-. Once, the original assessment is re-opened on some issue, the AO can reassess any issue which may come to his notice subsequently during the course of proceedings u/s. 147 of the Act as per Explanation-3 to section 147. Thus, we uphold the order of the ld. CIT(A) on the issue of reopening. Bogus purchases - estimating the profit to the extent of 12.5% of the purchases - Held that:- We find that the AO has failed to find any fault on the sales made by the assessee. In the case of Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] the Hon’ble Gujarat High Court has held that where purchases were not bogus but were made from parties other than those mentioned in the books of account, not entire purchase price but only profit element embedded in such purchases can be added to income of the assessee. CIT(A) has rightly directed the AO to restrict the disallowance to 12.5% of the disputed purchases. We uphold the order of the ld. CIT(A) and dismiss the 1st ground of appeal filed by the revenue. Unsold flats as stock-in-trade used for purpose of business - CIT-A held that the unsold flats as stock-in-trade used for purpose of business - Held that:- In order to give relief to Real Estate Developers, section 23 has been amended w.e.f. AY 2018-19 (FY 2017-18). By this amendment, it is provided that if the assessee is holding any house property as his stock-in-trade which is not let out for the whole or part of the year, the annual value of such property will be considered as Nil for a period up to one year from the end of the financial year in which a completion certificate is obtained from the competent authority. In the instant case, the assessee is a builder and developer. The issue of taxability is with regard to unsold flats. The AY is 2009-10. In view of the insertion of sub-section (5) in section 23 by the Finance Act, 2017, w.e.f. 01.04.2018 narrated hereinbefore, we uphold the order of the Ld. CIT(A) and dismiss the 2nd ground of appeal filed by the revenue. Addition u/s. 14A r.w. Rule 8D - Held that:- AO has rightly made a disallowance of ₹ 18,393/- u/s. 14A r.w. Rule 8D(2)(iii) of the Income tax Rules, 1962. This is in line with the judgement of the Hon’ble Bombay High Court in the case of Godrej & Boyce Mfg.Co.Ltd. vs. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT]. Therefore, we set aside the order of the CIT(A) on the above issue and restrict the disallowance to ₹ 18,393/- in place of ₹ 18,829/- made by the AO. Thus, the 1st ground of appeal is partly allowed.
|