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TMI Blog2025 (5) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... r the respondents. 1. Rule returnable forthwith. Learned Senior Standing Counsel Ms. Maithili Mehta for the respondents waives service of notice of rule for and on behalf of the respondents. 2. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 28th March, 2021 issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2016-17. 3. The brief facts of the case are as under : 3.1. During the year under consideration, the petitioner-Company was engaged in the business of construction activities and had shown income from contracts of Rs. 20,61,81,780/- (upto 2nd RA Bill) for development of structure work of project named World Trade Centre GIFT Gandhinagar. 3.2. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 and 15.10.2018 furnished various details including details of earlier notice with respect to the month-wise opening stock, purchases consumption, closing stock, agreement for contract and details of contract. 3.5. Thereafter the Petitioner vide letter dated 22.10.2018 submitted the reconciliation of income offered in return of income as well as income as per Form 26AS and also furnished details pertaining to 3rd RA Bill raised on 07.04.2016 and underlying amount being shown as Work In Progress. 3.6. It is the case of the petitioner that thereafter, the then Assessing Officer, vide notice dated 18.11.2018 issued under section 142 (1) of the Act, called upon the petitioner to furnish copies of RA Bills 1, 2 and 3 and the petitioner, vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 3rd RA Bill of Rs. 4,43,71,188/- as WIP, however, in the same manner, closing stock of unutilized/unbilled material at site on which the petitioner had claimed material advance of Rs. 3,10,94,615/- as per the 3rd RA bill was not shown as closing balance of unutilized material WIP. Thus, closing stock/WIP is understated in the accounts by a sum of Rs. 2,50,17,408/- (Rs. 3,10,94,615-Rs. 60,77,207) and in view of the same, the respondent has reason to believe that income of Rs. 2,50,17,408/- has escaped assessment and hence, the case of the petitioner has been reopened. 3.11. The petitioner raised objections against reopening vide letters dated 01.11.21, 26.11.21 and 27.11.21 wherein various factual as well as legal submissions were raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further pointed out by learned Senior Advocate Mr. Tushar Hemani that the issue was also considered under the regular course of assessment and invited the attention of the Court to the reply dated 15.10.2018 filed by the petitioner providing the details in response to the notice issued under Section 142 (1) of the Act. 4.4. It was also pointed out that by reply dated 22nd October, 2018, during the course of regular assessment, the petitioner has also reconcile the Tax Deducted at Source (TDS) as per the Form 26AS and in such reconciliation, the Work In Progress was shown as Rs. 4,43,71,188/-. It was therefore submitted that the respondent-Assessing Officer could not have assumed the jurisdiction for reopening of the assessment on the basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction to reopen the assessment. 6. Considering the submissions made by the learned advocates for the respective parties and on perusal of the material available on record, it appears that the respondent-Assessing Officer has formed reason to believe only on the ground that there is a difference in the Material Advance and the amount of closing stock of raw material disclosed in the profit and loss account by the petitioner. 7. On perusal of the RA Bill No. 3, it appears that the petitioner has received the Material Advance of Rs. 3,10,94,615/- being the 75% of Average Product Procure Rate which was accounted for in the RA Bill by setting of the similar Material Advance received in the RA Bill No. 2 amounting to Rs.2,46,05,994/-. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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