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TMI Blog2022 (5) TMI 886X X X X Extracts X X X X X X X X Extracts X X X X ..... has raised the following grounds of appeal. 1. The Ld. AO has erred in law and facts in issuing notice u/s 148 of the Act by mere change of view/opinion by relying on the same facts and material which had been submitted by the appellant during the course of assessment u/s 143(3) of the Act and Hon'ble CIT(A) has erred in confirming the above action of the A.O. 2. The Ld. CIT(A) has erred in law and facts in restricting the claim of opening work in progress of Rs. 4,60,59,347/- to Rs. 3,76,67,717/- by disallowing the expenses of Rs. 83,91,630/- incurred in the earlier assessment years on the ground that the appellant has not furnished supporings before the Hon'ble CIT(A) or the said expenses. 3. The Hon'ble CIT(A) has erred in law and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and accordingly, MIs Seth Developers Ltd., was engaged for the development of property. Thereafter, vide agreement dated 28.11.2002 entered into between the assessee and M/s Seth Developers Ltd, it was decided that the property shall be developed on the understanding that 50% of the sale proceeds of the flats, car parking shall be shared with the assessee. On perusal of the details of revenue and expenses which have been shared in the ratio of 50% each, it is seen that the assessee has not shared its opening work-in-progress in this ratio and has claimed 100% work-in-progress which is amounting to Rs. 4,60,59,3471- in its P& L account. This has resulted in escapement of income to the tune of Rs. 2,30,29,6681- and consequential tax effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the opinion that the assessee has claimed 50% more expenditure in the opening work in progress and made disallowance of Rs.2,30,29,668/-and assessed the total income of Rs.32,46,84,620/- and passed the order u/s 147 r.w.s 143(3) of the Act dated 26.12.2016. 5. Aggrieved by the order, the assessee has filed an appeal before the CIT(A) whereas the CIT(A) considered the grounds of appeal, submissions of the assessee, findings of the A.O. and granted the marginal relief to the extent of claim of work in progress and partly allowed the assessee appeal. Aggrieved by the CIT(A) order, the assessee has filed an appeal with the Hon'ble Tribunal. 6. At the time of hearing, the Ld. AR has submitted that the CIT(A) has erred in confirming the vali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e project shall be shared in the ratio of 50% each and the assessee has not shared the opening work in progress(WIP) and claimed 100% of work in progress in the profit and loss account. 8. The Ld. AR emphasized that as per the agreement the assessee is not entitled to share expenditure with the developers and therefore has claimed opening work in progress in the profit and loss account. The Ld. AR demonstrated the finance-cum-development agreement between the assessee and M/s Sheth Developers Ltd dated 28.11.2002 at page 44 to 76 of the paper book. The contentions of the Ld. AR are that the A.O. has wrongly assumed the facts of sharing revenue and expenditure in ratio of 50% each share which is factually incorrect as there is no specific c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be incurred by the owner/assessee. The Ld. AR emphasized that except revenue sharing between the assessee and developer no expenditure is shared. Further, the opening balance of WIP is carry forwarded from earlier years and the Ld. AR referred to the chart at page 94 of the paper book and most of the expenses are incurred by the assessee prior to entering into the agreement on 28.11.2002. 10. We considering the factual aspects, material and the submissions of the Ld. AR observe that the provisions of Sec.148 of the Act has to invoked only when the A.O. has reason to believe that the income has escaped assessment. where as in the present case on perusal of the various clauses which the Ld. AR has referred in the hearing, it is very clear t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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