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The Commissioner of Income Tax, The Assistant Commissioner of Income Tax Versus M/s Mookambika Developers

2015 (8) TMI 614 - KARNATAKA HIGH COURT

Reopening of assessment - disallowing the genuineness of the compensation u/s 40A(3) alleged to have been paid by the assessee to certain parties for vacating the property - whether the Tribunal would be correct in upholding reassessment proceedings when the reasons recorded for reopening of proceedings under Section 148 of the Act itself does not survive? - Held that:- Considering the provision of Section 147 as well as its Explanation 3, and also keeping in view that Section 147 is for the ben .....

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part of Section 147 is with regard to which reasons have been recorded. Under Section 148(2) of the Act, and the phrase 'any other income' used in the second part of the Section is with regard to where no reasons have been recorded before issuing notice and has come to the notice of the Assessing Officer subsequently during the course of the proceedings, which can be assessed independent of the first part, even when no addition can be made with regard to 'such income', but the notice on the basi .....

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: Sri S Parthasarathi, Adv. ORDER The assessee is a partnership firm. It is engaged in the business of Real Estate. For the assessment year 2006-07 the assessee filed its return of income which was accepted under Section 143(1) of the Income Tax Act (for short 'the Act'). Thereafter survey under Section 133A of the Act was conducted in the premises of the assessee and subsequently a notice for reopening under Section 148 of the Act was issued on 15.9.2008. The Assessing Officer, by orde .....

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lowed only 20% of the total payment of ₹ 1,65,00,000/- under Section 40A(3) of the Act. 2. Challenging the order of the Appellate Commissioner confirming the validity of reopening for the assessment under Section 148 of the Act, the assessee preferred an appeal before the Tribunal. The Revenue also preferred a separate appeal against the order of the Appellate Commissioner contending that the disallowance made by the Appellate Commissioner under Section 40A(3) of the Act was wrong and the .....

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ing the course of reassessment proceedings. Aggrieved by the said order of the Tribunal, these two appeals have been filed by the Revenue. 3. Appeal No.374/2014 has been filed primarily on the ground that the merits of the case have not been looked into by the Tribunal and Appeal No.376/2014 has been filed by the Revenue challenging the order of the Tribunal whereby it has been held that the reopening of assessment was invalid. 4. In Appeal No.376/2014 the following substantial question of law a .....

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of the case, the Tribunal was correct in not examining the merits of the matter regarding the genuineness of the expenditure claimed towards compensation paid for vacating the premises after adjudicating the appeal filed by the assessee regarding validity of the assessment made under Section 147 of the Act and recorded a perverse finding'. 6. We have heard Sri.K.V.Aravind, learned counsel for the Revenue in both the appeals as well as Sri.S.Parthasarathi, learned counsel appearing for the as .....

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vs - Income Tax Officer) decided on 1.7.2015. In the said judgment, after considering the decisions of the Punjab and Haryana High Court in the case of Majinder Singh Kang Vs CIT (2012) CIT 344 ITR 358 & CIT Vs Mehak Finvest Pvt. Ltd. (2014) 367 ITR 769 as well as the judgment of the Bombay High Court in the case of CIT - Vs - Jet Airways (I) Ltd. (2011) 331 ITR 236 and several other judgments rendered by the Supreme Court and various High Courts, it was held that :- Considering the provisio .....

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