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2016 (8) TMI 1045 - ITAT BANGALORE

2016 (8) TMI 1045 - ITAT BANGALORE - TMI - Reopening of assessment - no business activity carried - Held that:- The contention of the assessee-company that the re-assessment proceedings were initiated during pendency of the original proceedings cannot be accepted, as the facts emerge from the assessment order, the original return of income was filed on 28/3/2008 and therefore, notice u/s 143(2) should have been issued by 31/3/2009. Obviously, there was no notice issued u/s 143(2) against origina .....

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ears and this fact goes to show that there was no business activity carried on by the assessee-company. Obviously, this information could have enabled the AO to believe that no business was carried on by the assessee-company so as to entitled it to business loss which could be set off against capital gains. In our considered opinion, this information would have enabled the AO to believe that income got escaped assessment. It is also trite law that at the time of issuing notice, it is not incumbe .....

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ee-company either before the CIT(A) or before us. In the result, it cannot be accepted that the assessee-company is engaged in the business activity during the previous year relevant to assessment year under consideration. Therefore, business loss returned can neither be accepted nor can it be allowed to be set off against capital gains. As regards, grounds relating to bifurcation of consideration between land and buildings, assessee-company had not demonstrated before us as to how the working d .....

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/2013 for the assessment year 2007-08. 2. The assessee raised the following the grounds of appeal: 1. The order of the authorities below in so far as it is against the appellant is opposed to law, facts, equity, weight of evidence, probabilities and circumstances of the case. 2. The learned authorities below are not justified in determining the income at ₹ 3,36,20,420/- as against the returned income of ₹ 2,26,83,229/- on the facts and circumstances of the case. 3. The learned CIT (A .....

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. 4. The Hon'ble CIT (A) erred in confirming the action of the learned Deputy Commissioner of Income-tax erred in issuing the notice u/s 148 which was without proper jurisdiction on the facts and circumstances of the case. 5. The Hon'ble CIT(A)-III erred in upholding the order ignoring the fact that the order of assessment passed by the Assessing Officer is barred by limitations as the same has not been completed within the time specified u/s 153 of the Income-tax Act, 1961. 6. The learn .....

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6. Reliance is placed on the decision of the Allahabad High Court in 278 ITR 213 and Supreme Court decision in 240 ITR 355. 7. The learned authorities below erred in allocating the total sale consideration received on the sale of property between Land and Building without considering the depreciation. The guidance value of the building has been ascertained without considering the depreciation on the building. 8. The appellant craves leave to add, alter, amend, substitute, change, delete any of t .....

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of ₹ 2,26,83,229/-. Against said return of income, assessment was completed u/s 143(3) r.w.s. 147 of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short] vide order dated 31/12/2010 at a total income of ₹ 3,36,20,420/-. While doing so, the Assessing Officer [AO] had not allowed set off of business loss of ₹ 1,22,91,930/- against capital gains arising out of sale of land and buildings during the previous year relevant to assessment year under conside .....

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on of ban by the Government of Karnataka etc. 4. Being aggrieved by this assessment order, appeal was preferred before the CIT(A) contending inter alia that assumption of jurisdiction u/s 148 is invalid on the ground that re-assessment was on the ground that re-assessment proceedings were assumed only on the ground of suspicion and there are no reason to believe that income escaped assessment and the assessment order passed was barred by limitation. The above contention of the assessee-company w .....

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claimed without filing returns for several previous financial years. In these circumstances, I do not find any credibility in the objections raised by the appellant. This ground of appeal is accordingly dismissed. The contention of the assessee-company that it had carried on business during the previous year has also been rejected by the CIT(A) vide para.6.1 as under: 6.1. I find that before me also, the appellant could not adduce any independent evidence of the existence and valuation of the st .....

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us in the present appeal. 5.1 The learned counsel for the assessee argued that the reassessment proceedings initiated by the AO are bad in law for the reason that the re-assessment proceedings were initiated during the course of pendency of the original proceedings and barred by time. There are no reasons to believe that income escaped assessment from tax and the re-assessment proceedings were initiated merely on change of opinion and suspicion. In this connection, learned counsel for the assess .....

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tiated during pendency of the original proceedings cannot be accepted, as the facts emerge from the assessment order, the original return of income was filed on 28/3/2008 and therefore, notice u/s 143(2) should have been issued by 31/3/2009. Obviously, there was no notice issued u/s 143(2) against original return of income. Notice u/s 148 was issued on 21/12/2009 on which date admittedly there was no pending proceedings. Therefore, the contention of the assesseecompany that the re-assessment pro .....

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t goes to show that there was no business activity carried on by the assessee-company. Obviously, this information could have enabled the AO to believe that no business was carried on by the assessee-company so as to entitled it to business loss which could be set off against capital gains. In our considered opinion, this information would have enabled the AO to believe that income got escaped assessment. It is also trite law that at the time of issuing notice, it is not incumbent upon the AO to .....

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