TMI Blog2016 (6) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bombay High Court in the case of J.B. Boda & Co. Pvt. Ltd. (2010 (10) TMI 1102 - BOMBAY HIGH COURT ). In view of the aforesaid discussion, in our view, the reasons recorded by the Assessing Officer suffer from an infirmity of being misconceived in law and, therefore, initiation of proceeding thereupon is bad in law. Consequently, the assessment finalised by the Assessing Officer u/s 143(3) r.w.s. 147 of the Act dated 6.12.2012 is held to be invalid and bad in law, and is hereby set-aside - Decided in favour of assessee. - ITA No. 6044/MUM/2013, C.O. No. 06/Mum/2015 - - - Dated:- 8-6-2016 - Shri G. S. Pannu, Accountant Member And Shri Pawan Singh, Judicial Member For the Revenue : Smt. Sudha Ramachandran For the Assessee : Shri R. Murlidhar ORDER Per G. S. Pannu, AM The captioned appeal by the Revenue and cross objection by the assessee are directed against order of CIT(Appeals) -40, Mumbai dated 28/08/2016, which in turn arises out of an order passed by Assessing Officer under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short the Act ) dated 06/12/2012. 2. In its appeal the solitary grievance of the Revenue is against the action of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0IB(10) of the Act to the extent of the gross total income. 5. Before us, the Ld. Departmental Representative contended that the deduction allowable under section 80IB(10) of the Act is with respect to the business income and not against the income assessable under the other heads. It is sought to be pointed out that profit from the housing project was to the extent of ₹ 68,18,56,583/-. As per the Ld. DR, section 80IB(10) was relating to the business of development of the housing project and thus deduction was allowable to the extent of business income and not gross total income of an assessee, which may include incomes other than the business income also. The plea of the assessee, which has also been affirmed by the CIT(Appeals), is to the effect that the provisions of section 80IB(10) of the Act do not place any such restriction and the deduction allowable cannot be limited to the income assessable under the head business or profession . 6. In the present case, respondent is an assessee engaged in the business of real estate and development of properties. With respect to development and building of a project Oberoi Woods , it earned profits. Such project was eligi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the conditions prescribed therein. The claim of the assessee is u/s 80IB(10) which is also liable to be governed by the prescription of Sec. 80A(1) of the Act. Sub-section (2) of Sec. 80A further prescribes that the aggregate amount of deductions under Chapter VI-A shall not, in any case, exceed the gross total income of the assessee. Furthermore, the gross total income has also been defined in Chapter VI-A by way of Sec. 80B(5) to mean the total income computed in accordance with the provisions of the Act before making any deductions under Chapter VI-A. The aforesaid clearly implies that in order to deduce the amount of deduction entitled to the assessee u/s 80IB(10) of the Act, the starting point is the determination of the gross total income. Along with it, the eligible amount of deductions under various sections of Chapter VI-A are to be individually computed and such aggregate of deductions is liable to be restricted to the amount of gross total income prescribed in Sec. 80B(5) of the Act. In fact, the point made out by the Revenue that the deduction u/s 80IB(10) of the Act is allowable to the extent of profits of business is neither expressly and nor by implication und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riginally finalised by the Assessing Officer u/s 143(3) of the Act dated 24.12.2009, the Assessing Officer determined the gross total income at ₹ 82,58,43,666/- comprising of (i) income from house property ₹ 13,51,076/-, (ii) income from business ₹ 68,18,56,583/-; and, income from other sources ₹ 14,23,15,933/-. While computing the total income at ₹ 10,59,17,945/-, the Assessing Officer allowed deduction u/s 80IB(10) of the Act to the extent of ₹ 71,99,25,721/-, as claimed by the assessee. Subsequently, the Assessing Officer recorded reasons and issued notice u/s 148 of the Act dated 6.7.2012 reopening the assessment on the ground that certain income chargeable to tax had escaped assessment inasmuch as the deduction u/s 80IB(10) of the Act was liable to be restricted to ₹ 68,18,56,583/- being the income under the head business or profession . In the ensuing assessment the claim for deduction was scaled down, which we have dealt with on merits in the earlier part of this order. 11. Apart from assailing the action of the Assessing Officer on merits, the assessee company also canvassed before the CIT(Appeals) that issuing of notice o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een allowed in the assessment order dated 24.12.2009. No doubt, Explanation 2(c) below Sec. 147 of the Act brings out that even a case where income has been made subject of excessive relief can be construed as escapement of income, but the presence of the expression reason to believe in Sec. 147 postulates that the Assessing Officer must formulate a belief that a particular income chargeable to tax has escaped assessment, which shall be well-founded. Therefore, we may examine the reasons recorded by the Assessing Officer to reopen the assessment, which read as under :- In this case assessment was completed u/s.143(3) r.w. s. 153C of the I. T. Act 1961, on 24.12.2009, assessing the total income of ₹ 10,59,17,950/- after allowing the deduction u/s 801B(10) of ₹ 71,99,25,721/-. The assessee has claimed deduction of ₹ 71,99,25,721/- u/s 80IB(10) of the Income Tax Act 1961 in the return. The assessee had income of ₹ 68,18,56,583/- under the head Business and Profession. Therefore the assessee has claimed and has been allowed deduction in excess of its business income. The amount of the excess deduction is ₹ 3,80,69,138/-. The total income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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