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JALARAM DEVELOPERS Versus INCOME TAX OFFICER - VAPI WARD 2 AND 1

2016 (6) TMI 699 - GUJARAT HIGH COURT

Reopening of assessment - incorrect /excess deduction under section 80IB which is required to be disallowed - Held that:- The petitioner has not made any claim under section 80IB of the I.T. Act which is clear from his income-tax return at page No. 22, paragraph No. 2. As per income tax return of the assessee at page No. 19, the assessee has not claimed any deduction under Chapter VI-A of the I.T. Act. Therefore, the reason for reopening of the assessment is bad in law in view of the decision of .....

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ioner has challenged the notice dated 24.3.2010 issued by the respondents at Annexure-D to the petition whereby the respondents seek to reopen the assessment for assessment year 2006-07 for the reasons which are recorded as under: During the course of assessment proceedings for A.Y. 2007-08, it was noted that profits shown by the assessee in comparison to other builders (who are involved in the construction of similar housing projects but not available the benefit of deduction under section 80IB .....

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construction shown by the assessee in respect of Jalaram Complex, aplpeared on lower side. Hence, the matter was referred to valuation cell of the department, vide letter dted 4.12.2009, for ascertaining the correct cost of construction. The departmental valuer, submitted the valuation report of the property vide letter No. 2(2)/Vo[SRT]/2009-10/712 dated 18.12.2009, proposing the upward adjustment as under: S.No. Financial Cost of onstruction of the building as Year S. No Financial Year Cost of .....

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ard adjustment in the cost of construction in A.Y. 2006-07. Therefore, on the basis of this fresh information, it is clear that the assessee has claimed incorrect /excess deduction under section 80IB which is required to be disallowed. For this purpose, the assessment for A.Y. 2006-07 is hereby reopened by issue of notice under section 148 of the I.T. Act, 1961. 2. The learned counsel for the petitioner submits that the petitioner has not made any claim under section 80IB of the I.T. Act which i .....

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ich read as follows: 8. The record of the case reveals that for the year under consideration, the petitioner had not claimed any deduction under section 80IB (10) of the Act and therefore as there was no profit, the same was not indicated in the profit and loss account for the year under consideration. While the assessment is sought to be reopened on the ground that the petitioner has under reported the cost of construction, from the reasons recorded, there is nothing to indicate that the Assess .....

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the facts of that case observed that the sole ground for reopening the assessment was that the Valuation Officer had determined the cost of construction at a higher rate than that shown by the assessee in its books of account. The reasons recorded did not reflect that the Assessing Officer had applied his mind to the facts of the case to ascertain as to whether in fact the assessee had expended more amount towards construction as stated in the valuation report. Reverting to the facts of the pre .....

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ssessment, there must still be some reasons which warrant holding the belief that income chargeable to tax has escaped assessment so as to necessitate issuance of a notice under section 148 of the Act. The facts reveal that the entire basis for reopening the assessment of the petitioner for the year under consideration is the report of the DVO without verification of any facts to support such conclusion. The Assessing Officer has not recorded any satisfaction about the correctness or otherwise o .....

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per se is not an information for the purposes of reopening assessment under section 147 of the Act. The Assessing Officer has to apply his mind to the information, if any, collected and must form a belief thereon. 11. In the light of the above discussion, this court is of the view that on the reasons recorded by the Assessing Officer, he could not have formed the belief that the income chargeable to tax has escaped assessment. Under the circumstances, the very assumption of jurisdiction under se .....

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