9911796707
TMI Blog2012 (11) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... cts necessary for the assessment." 2. The Learned Assessing Officer has erred in not accepting the contention of the Appellant Company that the properties purchased by Appellant in Springfield Co. Op. Hsg. Soc. Ltd. was under developed and occupation certificate was not received from Pune Municipal Corporation and the office premises at Sharada Centre were also not fully developed due to non installation of Air-Conditioning, marble flooring concealed electric fittings and other work. 3. The Learned Assessing Officer has erred in not considering that as per Board resolution the properties were purchased for business purposes and as per Section 22 of the Act it is clarified that properties other than the properties Assessee may occupy for the purpose of business shall be chargeable to tax under the head "House Property" and in the case of Appellant, properties were purchased for use of business and properties were neither used nor rented out and therefore the question of considering deemed rent does not arise. 4. The Learned Assessing Officer has erred in overlooking that appellant company filed copy of letter dated 3.5.2004 issued by Chairman of Springfield Co. Op. Hs2. Soc. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome from capital gain (-)Rs.4, 94,291/-." 2. On perusal of the balance sheet filed along with the return of income it is noticed that the assessee had shown investment in immovable properties viz, office premises in "Sharada Centre" at Pune of Rs.61,37,000/- and 12 residential flats at "Spring Fields CHS Ltd." at Pune of Rs. 1,33,52,500/-, totaling to Rs. 1,94,89,500/-. In the computation of total income assessee has not shown any income under the head 'Inco me from house property'; 3. The provisions of section 22 of the I. T. Act, 1961 are applicable in this case as the assessee company had not claimed any depreciation on the premises as business premises nor has it shown the premises as business assets in the schedule of fixed assets. Fwther on perusal of the record for A. Y.2003-04 it is noticed that premises have not been actually occupied for used for the purpose of its business. In view of the above the properties held by the assessee company are clearly house properties within the provisions of section 22 of the I. T. Act, 1961. Thus, the deemed income from the said properties is to be been taxed as income from house property. 4. Therefore, I am of the opinion that inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s referred the letter dated 3.12.2002 at page 98 of the paper book and submitted that after the said premises was sold to the sister concern vide agreement dated 2.11.2002, the concerned builder written the said letter to the sister concern of the assessee regarding the amenities to be provided but were not actually provided and accordingly, the balance amount payable was adjusted/reduced. 4.2 The ld AR of the assessee has submitted that the Assessing Officer has seriously erred in reopening the assessment u/s 147 overlooking that the original assessment was passed u/s 143(3) and the assessee made full disclosure during the scrutiny assessment. Therefore, the assessment proceedings are time barred as hit by sec. 147. 4.3 On the other hand, the ld DR has submitted that there is failure on the part of the assessee to disclose the income from house property. He has referred Explanation 1 to sec. 147 and submitted that mere production of books of account would not amount to disclosure full and true particulars of income necessary for assessment. He has supported the orders of the lower authorities and also relied upon the decision of the Hon'ble Delhi High Court in the case of Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). In such matter the Assessing Officer is under duty bound to examine and adjudicate the claim of the assessee. In the case in hand, the reopening is on the ground of not offering of income from house property. Therefore, until and unless the assessee makes it clear that in the return of income or computation of income itself that why the assessee is not offering the said income from house property in respect of the property shown as investment by the assessee. Mere mention of the investment would not fulfil the said requirement of onus cast on the assessee. The disclosure of fully and truly all the material facts necessary for the assessment as per the proviso to sec. 147 postulate the complete disclosure of primary facts. Thus, the assessee is under obligation to disclose fully and truly all the material facts necessary for assessment. Every disclosure is not and cannot be treated to be true and full disclosure, if it brings out a partial but mislead the fact. 5.3 In this case, the assessee has shown the property in question under the investment but no indication or any averment or fact has been mentioned either in the return of income or in the other relevant record to explain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te bearing on the assessment. Omission to disclose may be deliberate or inadvertent. This is not relevant, provided there is omission or failure on the part of the assessee. The latter confers jurisdiction to reopen the assessment. Whether or not there was a failure or omission to disclose fully and truly material facts, is essentially a question of fact. Section 14A was introduced with retrospective effect by the Finance Act, 2001, which was tabled in Parliament on February 28, 2001, and was passed by Parliament on April 1, 2001. The petitioner is a multinational company and it is difficult to perceive and accept that their tax or the legal department was not aware and did not have knowledge about section 14A of the Act. It is clear from the aforesaid paragraph the petitioner has accepted that "material particular" referred to in the first proviso not only refers to details in the return but also explanations and details furnished during the course of assessment. The petitioner had not stated anything or given factual matrix to justify and state that the material facts had been fully and truly disclosed in the assessment proceedings and there was no omission or failure on the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no change of opinion. Therefore, in the present case, the impugned notice is sustained." 6. In view of the above discussion and the decision of the Hon'ble Supreme Court (supra) we do not find any error or illegality in the order of the CIT(A) on this issue. Next issue is in grounds no. 2 to 5: 7 We have heard the ld AR of the assessee as well as the ld DR and considered the relevant material on record. An identical issue has been considered by the coordinate Bench of the Tribunal in assessee's own case for the Assessment Year 2003-04 vide order dated 20.4.2010 in ITA No.6569/Mum/2007 in paras 7 & 8 area s under: 7. Although the learned D.R. has strongly objected to the admission of the additional evidence sought to be filed by the assessee on the ground that no reason has been given by the assessee for its failure to file the same before the authorities below, it is observed that the documents sought to be filed by the assessee as additional evidence have already been filed by it before the A.O. during the course of re-assessment proceedings for A.Y. 2002-03 and 2003-04 and the same have also been filed by the assessee during the course of appellate proceedings before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs..1,53,159/- by applying provisions of sec. 14A. 10.2 On appeal, the CIT(A) has confirmed the action of the Assessing Officer. 11. Before us, the ld AR of the assessee has submitted that the assessee has not paid any interest on the loans utilised for earning tax free income and also has not incurred any expenditure for earning exempt income. Therefore, section 14A is not applicable for disallowing the expenditure. He has further submitted that for the assessment year under consideration, Rule 8D is also not applicable and the lower authorities have committed a mistake by applying Rule 8D in disallowing the expenditure. 11.1 On the other hand, the ld DR has submitted that when there is no business activity carried out by the assessee, then the expenditure claimed by the assessee is only for earning the exempt income and therefore disallowed the same. 12 We have considered the rival contention as well as the relevant material on record. The assessee has debited the following expenses in the P&L account: Sr.No. Particulars Amount (in_Rs.) i) Legal and Professional fees for conducting Income-tax matters before Income-tax authorities 1,00,000/- ii) Professional fees f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
