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2015 (4) TMI 763 - ITAT LUCKNOW

2015 (4) TMI 763 - ITAT LUCKNOW - TMI - Reopening of assessment - Certain requisite conditions for claiming deduction not examined by the Ao - Held that:- In the initial assessment when the matter has gone upto the Tribunal on the issue of claim of deduction under section 80- IB(10) of the Act, it cannot be assumed that the issue of requisite conditions for claiming deduction under section 80-IB(10) of the Act was not examined by the appellate authorities including the Tribunal. Therefore, once .....

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Revenue’s appeal, the reopening of the same issue is not possible.

Since the issue of claim of deduction under section 80-IB(10) of the Act was thoroughly examined during the course of initial assessment, the reopening of assessment on the same issue on a plea that certain requisite conditions for claiming deduction under section 80-IB (10) of the Act was not examined by the Assessing Officer, cannot be called to be a valid reopening, as the claim of deduction under section 80-IB(10) .....

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K. Garodia JJ For the Appellant : Shri. P. K. Dey, D.R. For the Respondent : by: None ORDER Per Sunil Kumar Yadav: These appeals are preferred by the Revenue against the respective order of the ld. CIT(A) on common grounds. 2. The assessee has also filed cross objections in support of the orders of the ld. CIT(A). 3. In the Revenue s appeals, common grounds are raised by the Revenue assailing the orders of the ld. CIT(A) pertaining to assessment years 2004-05 & 2005-06. The common grounds ra .....

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and is, therefore, annulled ignoring the fact that AO, after having noticed during the course of assessment proceedings for A.Y. 2008-09 the assessee's failure to disclose fully and truly all the material facts necessary for assessment with regard to obtaining and filing the completion certificate as stipulated in explanation appended to sub-sec (10) of sec. 80IB, re-opened the case. 3. That Ld. CIT (A) is not justified in allowing the appeal of the assessee on relying the decision of Hon&# .....

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ng for partial mergers only of such orders. 5. That the order of the Ld. CIT (A) being erroneous in law and on facts which needs to be vacated and the order of the A.O. be restored. 4. The facts in brief are that the original assessment was framed under section 143(3) of the Income-tax Act, 1961 (hereinafter called in short the Act") allowing the claim of deduction under section 80-IB(10) of the Act. Later on, the Assessing Officer has reopened the assessment by issuing notice under section .....

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t year 2004-05. We, therefore, prefer to adjudicate the appeal for assessment year 2005-06 first. I.T.A. No. 669/LKW/2013: A.Y. 2005-06: 6. This appeal came up for hearing on 11.2.2015, but none appeared on behalf of the assessee. An application for adjournment was, however, moved on the ground that due to certain unavoidable personal reasons, the counsel of the assessee was unable to appear. On perusal of record, it is noticed that this appeal was filed on 10.9.2013. Thereafter, it was listed f .....

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over, in the adjournment application dated 5.2.2015, we find no valid ground for nonappearance of the counsel for the assessee. We, therefore, reject the request for adjournment and heard the appeal ex-parte qua the assessee. Accordingly, the Revenue was heard. 7. The ld. D.R. has placed heavy reliance upon the order of the Assessing Officer with the submission that the assessment was reopened by the Assessing Officer having formed a belief that the assessee did not fulfill the requisite conditi .....

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ourse of original assessment while allowing deduction under section 80-IB(10) of the Act, the reopening is valid. 8. Having given a thoughtful consideration to the submissions of the ld. D.R. and from a careful perusal of the order of the ld. CIT(A), we find that the ld. CIT(A) has observed in his order that the original assessment was framed under section 143(3) read with section 147 of the Act wherein the Assessing Officer did not fully allow the claim of the assessee under section 80-IB(10) o .....

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also made a reference to the proviso to section 147 of the Act, according to which the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject-matters of any appeal, reference or revision. Therefore, undisputedly this is the second time of reopening of assessment on the issue of deduction under section 80-IB(10) of the Act. In the initial assessment when the matter has gone upto the Tribunal on the issue of claim of deduction under sec .....

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sessing Officer cannot assess or re-assess such income which is subject matter of appeal, reference or revision. Since the claim of deduction under section 80-IB(10) of the Act is sub-judice before the Hon'ble High Court in the Revenue s appeal, the reopening of the same issue is not possible. The ld. CIT(A) has discussed this issue in detail in his order and for the sake of reference, we extract the relevant portion of the order of the ld. CIT(A) as under:- Action u/s.147 of the Act had bee .....

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ee took the matter to the CIT(A). The Id. CIT(A) passed an order vide his order No. CIT(A)-l/85/CC-II-KNP/09-10/201 dated 30.03.2010 wherein the claim of the assessee under section 80IB(10) was allowed. The relevant portion of the appeal order is as under: "6. During the course of appeal proceeding AR appeared and furnished copy of assessment order for A. Y. 2001-02 as well as copy of appeal order for A. Y. 2005-06 passed by the CIT(A)-I, Kanpur vide order dated 11-03-2008 from these order, .....

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re very clear, wherein it has been laid down that where any deduction is required to be made or allowed under any section (except section 8M) included in Chapter-VIA under the heading "C-deduction in respect certain incomes" in respect of any income of the nature specified in that section, which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section for the purpose of computing any deduction under that section, the amount of inco .....

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apter". Hence, in view of. provisions contained in section 40AB and 80B(5) of the IT. Act coupled with the judicial rulings on this point, I have no hesitation in holding that appellant is entitled for deduction u/s.80IB(10) of the I.T. Act on the profits of eligible dwelling units, which is included in the gross total income. In other words, the addition/disallowances made in the assessment and which are directly related to the "eligible dwelling units" have to be considered as & .....

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o rework out the deduction u/s.80IB(10) of the IT. Act on the basis of CIT(A) order for A. Y. 2005-06 and assessment order for A, Y. 2001- 02. 4.2 Against the order of the Ld. CIT(A), the department took the matter to the Hon'ble ITAT, who vide order dated 09.09.2010 passed an order dismissing the departmental appeal. The department has filed an appeal before Hon'ble High Court and the matter is still pending. 4.3 During the course of oral hearing, the Ld. A.R. has invited my attention t .....

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ready been the subject matter of appeal. In this regard, I have gone through the Memorandum to the Finance Act 2008 explaining the introduction of the 2nd Proviso to sec.147 wherein it has been stated "that it has been held in a case where an assessment is made the subject matter of the appeal, only that part of the AO's order merges with the appellate authorities order in respect of which the appellate authority has exercised the appellate jurisdiction-[( CIT vs Sakseria Cotton Mills L .....

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e income which had not been h disposed by the assessee in his books. Thus, there was no escapement of income on the" gross level". As regards the "net income" escaping assessment, i.e. income after deduction u/s 80IB (10) of the Act the matter of such deduction u/s. 80IB(10) has already been a subject matter of appeal and continues to be a subject matter of appeal before the Hon'ble High Court. Thus, the reopening in this case is directly hit by the 2nd proviso to section .....

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rom the decision the Hon'ble Supreme Court in the case of Hindustan Aeronautics Ltd vs CIT (243 ITR 808) wherein it was observed by their Lordship as under: "The order which is the subject matter of an appeal cannot be divided into two parts one which is the subject matter of the appeal and the other which was not in issue in the appeal before the Tribunal. What becomes merged in the order of the Tribunal is the order made by the Appellate Assistant Commissioner in its entirety and not .....

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of the Commissioner under this sub-section shall extend to such matters as had not been considered and decided in such appeal. Where the Legislature intended that the scope of revision should extend to a part of the order which had not been considered and decided in an appeal and thereby does not merge it is explicitly provided. When the Legislature does not make such a distinction in the scheme of section 264 of the Act the view taken by the High Court appears to us to be correct." 4.3.3 I .....

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