VASTUSANKALPA DEVELOPERS, MUMBAI V. ASST CIT CIR 3, KALYAN

CO 68/MUM/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7503 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 06-07-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2005-2006
• Appeal Filed On: 09-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: DR K SHIVARAM
• Keywords: Reason to believe; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI .. , ! ' #$ %& , ' ', ( BEFORE SHRI R.S.SYAL, AM AND SHRI AMIT SHUKLA, JM ./ ITA NO.5076/MUM/2011 ( '* + '* + '* + '* + / / / / ASSESSMENT YEAR :2005-2006) THE ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE 3 KALYAN (WEST) 421 301. M/S.VASTUSANKALP DEVELOPERS 108 MADHAV BAUG, GAUSHALA ROAD SHIVAJI PATH, KALYAN (WEST) PAN : AADFV5372R. ( ,- / // / APPELLANT) * * * * / VS. ( ./,-/ RESPONDENT) ./( ./ CO NO.68/MUM/2012 ( '* + '* + '* + '* + / / / / ASSESSMENT YEAR :2005-2006) M/S.VASTUSANKALP DEVELOPERS 108 MADHAV BAUG, GAUSHALA ROAD SHIVAJI PATH, KALYAN (WEST) THE ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE 3 KALYAN (WEST) 421 301. (CROSS OBJECTOR) * * * * / VS. ( ./,-/ RESPONDENT) 0 0 0 0 1 11 1 2 2 2 2 / REVENUE BY : SHRI M.RAJAN (CIT-DR) '* 3$ '* 3$ '* 3$ '* 3$ 1 2 1 2 1 2 1 2 / ASSESSEE BY : DR.K.SHIVARAM * 1 $! / / / / DATE OF HEARING : 04.07.2012 45+ 1 $! / DATE OF PRONOUNCEMENT : 06.07.2012 ' % ' % ' % ' % / / / / O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY T HE ASSESSEE ARISE OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-T AX (APPEALS) ON 31.03.2011 IN RELATION TO THE ASSESSMENT YEAR 2005- 2006. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) ON 28.12.2007 DETERMI NING ASSESSEES TOTAL ITA NO.5076/MUM/2011 & CO.68/M/12 M/S.VASTUSANKALP DEVELOPERS. 2 INCOME AT ` NIL AFTER ALLOWING DEDUCTION U/S 80-IB(10) AMOUNTI NG TO ` 46,79,900. SUBSEQUENTLY NOTICE U/S 148 WAS ISSUED O N 30.03.2010 CALLING IN QUESTION THE ALLOWABILITY OF DEDUCTION U/S 80-IB(10 ) ON THE BASIS OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2007-2008. IN THE PRESENT ASSESSMENT ORDER U/S 147 READ WITH SECTION 143(3), THE ASSESSI NG OFFICER DENIED DEDUCTION U/S 80-IB(10). THE ASSESSEE ASSAILED THE ASSESSMENT ORDER BEFORE THE LEARNED CIT(A) ON MERITS AS WELL AS INITIATION OF REASSESSM ENT. THE LEARNED CIT(A) UPHELD THE ACTION OF THE A.O. IN PASSING THE ORDER U/S 147. HE HOWEVER DIRECTED TO DELETE THE DISALLOWANCE OF DEDUCTION U/S 80-IB(1 0). BOTH THE SIDES ARE IN APPEAL AGAINST THEIR RESPECTIVE STANDS. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS OBSERVED THAT THE ASSESSIN G OFFICER INITIATED REASSESSMENT ON THE BASIS OF THE FOLLOWING REASONS: - ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) O N 28-12- 2007 DETERMINING THE ASSESSEES TOTAL INCOME AT RS. NIL. IN THE SAID ORDER A CLAIM OF DEDUCTION U/S 80IB(10) OF I.T .ACT 1961 AMOUNTING TO RS. 46,79,900/- WAS ALLOWED TO THE ASS ESSEE SUBJECT TO THE CONDITION THAT THE ASSESSEES PROJECT WOULD BE COMPLETED BY 31-03-2009 WHICH WAS THE MAXIMUM TIME ALLOWED TO ASSESSEE UNDER THE PROVISIONS OF SECTION 80IB(10) OF THE ACT . DURING THE COURSE OF SAID ASSESSMENT PROCEEDINGS, STATEMENT OF SHRI HARAKCHAND JAIN, PARTNER OF THE FIRM WAS ALSO RECOR DED ON OATH. IN THE SAID STATEMENT SHRI HARAKCHAND JAIN HAD AFFI RMED THAT THE FIRM SHALL MAKE ALL OUT EFFORTS TO COMPLETE THE PRO JECT BY THE TIME STIPULATED IN SEC.80IB(10) OF THE ACT I.E. BY MARCH , 2009. HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDING S FOR AY 2007-08 WHICH WERE COMPLETED IN DECEMBER 2009 IT IS SEEN THAT THE ASSESSEES PROJECT WAS STILL INCOMPLETE AND THU S THE ASSESSEE HAS FAILED TO FILE COMPLETION CERTIFICATE AS ENVISA GED UNDER THE PROVISIONS OF SECTION 80IB(10) OF IT ACT 1961. THE ASSESSEES CLAIM FOR DEDUCTION U/S 80IB(10) FOR AY 2007-08 WAS THEREFORE DISALLOWED. CONSIDERING THIS POSITION I HAVE REASON TO BELIEVE THAT THE AMOUNT OF RS.46,79,900/- HAS ESCAPED ASSES SMENT IN THE HANDS OF ASSESSEE FIRM WITHIN THE MEANING OF SECTIO N 147 OF THE ITA NO.5076/MUM/2011 & CO.68/M/12 M/S.VASTUSANKALP DEVELOPERS. 3 IT ACT 1961 FOR AY 2005-06 AND I ACCORDINGLY REOPEN THE ASSESSMENT BY ISSUE OF NOTICE U/S 148 R.W.S. 147 OF THE IT ACT, 1961. ISSUE NOTICE U/S 148 FOR A.Y. 2005-06. 4. FROM THE ABOVE REASONS IT IS DISCERNIBLE THAT TH E BEDROCK FOR THE INITIATION OF REASSESSMENT WAS THE DENIAL OF CLAIM OF DEDUCTIO N U/S 80-IB(10) FOR ASSESSMENT YEAR 2007-2008. THE SAID ASSESSMENT ORDE R FOR ASSESSMENT YEAR 2007-2008 CAME UP FOR ADJUDICATION BEFORE THE TRIBU NAL, A COPY OF WHICH IS AVAILABLE ON PAPER BOOK. VIDE ITS ORDER DATED 31 ST MAY, 2012, THE TRIBUNAL IN ITA NO.6758/MUM/ 2010 HAS UPHELD THE ACTION OF THE LEARNED CIT(A) IN ALLOWING DEDUCTION U/S 80-IB(10). FROM THE ABOVE CH RONOLOGY OF EVENTS IT CAN BE EASILY NOTICED THAT THE VERY BASIS FOR INITIATIO N OF REASSESSMENT PROCEEDINGS FOR THE CURRENT YEAR, BEING THE DENIAL OF DEDUCTION U/S 80-IB(10) FOR ASSESSMENT YEAR 2007-2008, CEASES TO EXIST. IN THAT VIEW OF THE MATTER, WE FIND NO DIFFICULTY IN HOLDING THAT THE LEARNED CIT(A) WAS J USTIFIED IN DELETING THE DISALLOWANCE OF DEDUCTION U/S 80-IB(10), WHICH VIEW ACCORDS WITH THE ONE CANVASSED BY THE TRIBUNAL FOR THE A.Y. 2007-08. 5. THERE CAN BE NO DISPUTE ON THE FACT THAT THE ASSESSING OFFICER IS EMPOWERED TO INITIATE REASSESSMENT PROCEEDINGS ON T HE BASIS OF VIEW TAKEN BY HIM IN SUBSEQUENT YEAR. HOWEVER IN ORDER TO JUSTIFY SUCH REASSESSMENT, THE SUSTENANCE OF ACTION TAKEN BY HIM IN THE SUBSEQUENT YEAR, WHICH FORMED THE BASIS FOR THE REASSESSMENT FOR THE CURRENT YEAR, I S SINE QUA NON . SINCE THE DISALLOWANCE OF DEDUCTION U/S 80-IB(10) HAS BEEN DE LETED BY THE TRIBUNAL FOR ASSESSMENT YEAR 2007-2008, WE ARE OF THE CONSIDERED OPINION THAT NO INFIRMITY CAN BE FOUND IN THE IMPUGNED ORDER IN DELETING THE DISALLOWANCE OF DEDUCTION U/S 80-IB(10) FOR THE CURRENT YEAR. ITA NO.5076/MUM/2011 & CO.68/M/12 M/S.VASTUSANKALP DEVELOPERS. 4 6. 3 $6 0 1 7 '* 3$ 1 ./( !30 1 0$ 89 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED AS HAVING BECOME INFRUCTUOUS. ORDER PRONOUNCED ON THIS 06 TH JULY, 2012. . ' % 1 45+ :'*6 5 1 ; SD/- SD/- (AMIT SHUKLA) (R.S.SYAL) ' ' ' ' ' ' ' ' / JUDICIAL MEMBER ! ' ! ' ! ' ! ' / ACCOUNTANT MEMBER MUMBAI ; :'* DATED 06 TH JULY, 2012. DEVDAS* ' % 1 .'$#< = <+$ ' % 1 .'$#< = <+$ ' % 1 .'$#< = <+$ ' % 1 .'$#< = <+$/ COPY OF THE ORDER FORWARDED TO : 1. ,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. > () / THE CIT(A)-I, THANE. 4. > / CIT 5.