TMI Blog2014 (2) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer thought the same was not allowable, after hearing the petitioner and inviting her response, he disallowed the substantial portion of the claim – thus, now it is not possible for the Revenue to canvas that yet another element of the claim was not gone into by the Assessing Officer. Regarding recording of Reasons - Held that:- The completion of housing project in the year 2010 was well within the time limit envisaged under the statute - There is insufficient material to hold so - Even the sale deed refer to several dates and events - Without reference to the original documents and further evidence, it would be hazardous to accept the petitioner’s contention that for the first time, the development permission was granted by the local authority only in the year 2007 - The validity of the reasons must be judged on the basis of requirement of reason to believe and not necessarily that the addition must invariably made ultimately – thus, this contention of the assessee cannot be accepted. The notice is quashed - Though second contention of the assessee is not accepted, petition allowed on the basis of first contention - Decided in favour of Assessee. - SPECIAL C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been escapement of income on account of original assessment whereby excessive allowance under the Act has been computed, which requires reconsideration and reassessment. Therefore, on the facts of the case, your case for A.Y. 200910 has been reopened for reassessment of such income to tax, which has escaped assessment. 4. The petitioner raised her objections to the reopening of the assessment under a communication dated 18.10.2013. She contended that claim of deduction under section 80IB( 10) was examined at the time of original assessment. She additionally contended that the ground on which the assessment is sought to be reopened lacks validity. She pointed out that the housing project was approved only on 5.2.1997. She contended that an application for development of housing project was made only on 11.6.2006 which was granted on 23.2.2007. Subsequently, also there was an application for permission to revise the construction plan which was also granted on 10.1.2010 and thus within the time specified in section 80IB( 10) of the Act, to enable her to claim the deduction. The Assessing Officer however, rejected the objections by his order dated 4.12.2013. Hence this petition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner s contention that the development permission was granted only in February 2007 and not in the year 1997 as contended by the Assessing Officer. This aspect must be left to be judged in regular assessment proceedings. In support of his contentions, counsel relied on the following decisions : 1) Ess Ess Kay Engineering Co. P. Ltd. v. Commissioner of Income tax reported in which the Supreme Court observed that the mere fact that the case of the assessee was accepted as correct in the original assessment for an assessment year, does not preclude the Income tax officer from reopening that assessment on the basis of his findings of fact made on the basis of fresh materials obtained in the course of assessment for the next assessment year. 2) Phool Chand Bajrang Lal and another v. Income-tax Officer and another reported in (1993) 203 ITR 456, the Supreme Court considered as situation where, in the original assessment, a certain claim of the assessee was accepted. On subsequent information received by the Assessing Officer that the Managing Director of the assessee company had confessed that the company had not advanced any loan to any person during the period under con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was no additional, independent or extraneous material relied upon by the Assessing Officer in the reasons recorded for issuing notice for reopening the assessment. Any further affidavit or statement from any other source would not cure this position. What is of crucial importance for judging the validity of notice for reopening is the reason recorded by the Assessing Officer. In such reasons, he stated that on going through the record, he found certain facts, according to which, the claim of deduction under section 80IB( 10) of the Act was not sustainable. 9. The decision of the Supreme Court in case of Ess Ess Kay Engineering Co. P. Ltd.(supra) and Phool Chand Bajrang Lal and another (supra) are therefore, clearly not applicable. Present is a case where the Assessing Officer relies on the material already on record to contend that the claim for deduction under section 80IB( 10) of the Act of the petitioner assessee was not valid. Being a case of reopening within four years of original assessment, if during the scrutiny such claim was not examined, for valid reasons, it may be open for the Assessing Officer to examine the same even on the basis of material on record. In case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a specific query regarding the petitioner s claim for deduction under section 80IB( 10) of the Act under a show cause notice dated 21.12.2011. He stated thus : During the relevant AY it has been found that building construction activity has been carried out by the assessee in the names of Shiv Abhishek Project and Pooja Abhishek under the banner of M/s Satyam builders. The comparative performance and financial details of these projects are laid down in the Table below. Sr. No. Particulars Shiv Abhishek Project Pooja Abhishek Project Description 80IB(10) Non-80IB(10) 1 Project It s purely Residential project Its residential cum commercial projects 2 Total sale 9696500 12,60,000 3 Gross Profit (in Rs) 2159675 49000 4 GP(In %) 22.30% 3.89% Thus apparently the profit rate has been shown at a higher rate in the projects in which deduction u/s. 80IB is available. This is not found acceptable since the parameters of be the building projects under hand are similar and there is no reason as to why ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent he was convinced that the same was exaggerated. He allowed only part of the claim. 15. It is true that this pointed element of the housing project not having been completed within 10 years of the date of development permission granted by the local authority was not raised by the Assessing Officer. However, in the return filed, this was virtually the only claim of the petitioner. The petitioner had declared gross total income of Rs.22,85,259/and claimed deduction under section 80IB(10) of the Act of Rs. Rs.21,59,675/. If the Assessing officer had any doubt about the basis of claim itself, the same could have been examined. On the basis of the same material, it would now not be open for the Assessing Officer to reexamine the claim on the premise that a certain element of the claim was not gone into at the time of original assessment proceedings. 16. In case of Gujarat Power Corporation Ltd.(supra), this Court did leave some room for the Revenue to argue that if a certain element of claim was not gone into by the Assessing Officer in the original assessment, reopening may still be permissible. The Court observed as under : 48. Before closing this issue, we would like ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. It may be that he did not raise specific query to allowability of the claim on the premise that the petitioner was doing scientific research for and on behalf of the companies. However, merely for the failure of the Assessing Officer to raise such a question, in our opinion, would not authorize him to reopen the assessment even within the period of 4 years from the end of the relevant assessment year. Any such attempt on his part would be based on mere change of opinion. To reiterate when a claim was processed at length and after calling for detailed explanation from the assessee, the same was accepted, merely because a certain element or angle was not in the mind of the Assessing Officer while accepting such a claim, cannot be a ground for issuing notice for reassessment. 19. We have now come to the second contention of the petitioner. Contrary to what is canvassed before us, we are not in a position to hold and declare that development permission was granted by the local authority only in February 2007 and, therefore, the completion of housing project in the year 2010 was well within the time limit envisaged under the statute. There is insufficient material for us to hold s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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