LODHA CONSTRUCTON ( DOMBIVALI ) NOW MERGED WITH LODHA DEVLOPERS P. LTD, MUMBAI V. DCIT CEN CIR 7(3), MUMBAI

ITA 7074/MUM/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9508 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 05-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MICHAEL JERALD
• Keywords: Business income; Audit objection; Additional evidence; Bad and doubtful debts; Difference of opinion; Change of opinion
• Section: 40A(3); 143(3); 142(1); 40(a)(ia); 80IB; 143(2); 147; 148; 263

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL A BENCH MUMB AI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 7074/MUM/2016 (ASSESSMENT YEAR 2007-08 ) LODHA CONSTRUCTION (DOMBIVALI), NOW MERGED WITH LODHA DEVELOPERS PVT. LTD.), 412, 4 TH FLOOR, 17G VARDHAMAN CHAMBER, CAWASJI PATEL ROAD, HORNIMAN CIRCLE, FORT, MUMBAI- 400001 PAN: AABFL3409M VS. DCIT CENTRAL CIRCLE- 7(3) ROOM NO. 655, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020. APPELLANT RESPONDE NT APPELLANT BY : MS. AARTI SATHE (AR) RESPONDENT BY : SHRI MICHAEL JERALD (SR.DR) DATE OF HEARING : 04.02.2020 DATE OF PRONOUNCEMEN T : 20.03.2020 ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-49 MUMBAI IN SHORT LD. CIT(A) IN APPEAL NO.CIT(A)-49/IT-102 & 103/2015-16, DATED 07.10.2016 FOR ASSESSMENT YEAR 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) ERRED IN UPHOLDING THE RE-OPENING OF THE ASSESSMENT BEYOND FOUR YEARS, DESPITE THE REASONS FOR RE-OPENING COMMUNICATED TO THE APPE LLANT, NOT EVEN HAVING A WHISPER OF ANY ALLEGATION OF FAILURE TO DISCLOSE FU LLY AND TRULY ALL MATERIAL FACTS AT THE TIME OF ORIGINAL ASSESSMENT. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) ERRED IN CONCLUDING THAT THE PROVISO TO SECTION 147 WAS SATISFIED ON THE BASIS OF THE CONTENTS OF AN INTERNAL CORRESPONDENCE SENT BY THE ASSESSING OFFICER, FOR ITA NO. 3999 MUM 2019-FACET DEVELOPERS LTD. 2 OBTAINING THE APPROVAL OF THE COMMISSIONER OF INCOM E TAX, IGNORING THE FACT THAT THE REASONS FURNISHED TO THE APPELLANT CANNOT BE SUPPLEMENTED IN ANY MANNER. 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) ERRED IN RELYING ON THE DECISION OF THE SUPREME COU RT IN THE CASE OF CIT VS P.V.S. BEEDIES (P) LTD REPORTED IN 103 TAXMAN 294, WHICH JUSTIFIED A RE-OPENING OF ASSESSMENT ON THE BASIS OF AUDIT OBJECTION BASED ON FACTS, WHEREAS, IN THIS CASE THE AUDIT OBJECTION WAS ON A POINT OF LAW AND SUCH RE-OPENING ON THE BASIS OF AUDIT OBJECTION ON A POINT OF LAW IS NOT PERMITTED AS PER THE DECISION OF THE SUPREME COURT IN THE CASE OF 'INDIAN & EASTERN NEWS PAPER SOCIETY VS CIT REPORTED IN [1979]2 TAXMAN 197. 4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) ERRED IN CONCLUDING, THAT THE FLAT CANCELLATION REC EIPTS ARE NOT ELIGIBLE FOR DEDUCTION U/S 80IB. 2. THE ASSESSEE VIDE APPLICATION DATED 11.04.2019 FILE D ON 22.04.2019 HAS RAISED THE FOLLOWING ADDITIONAL GROUND OF APPEAL: (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD CIT(A) ERRED IN CONCLUDING THAT INTEREST INCOME OF RS.21,20,487/- A RE NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB INSTEAD OF NET INTEREST INCOME O F RS. 5,25,128/-. (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) ERRED IN CONCLUDING THAT BANK CHARGES RECOVERED FROM CUSTOME RS & SUNDRY CREDITORS AND OTHER BALANCE WRITTEN BACK ARE NOT ELIGIBLE FOR DED UCTION U/S 80IB . 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPA NY IS ENGAGED IN THE BUSINESS OF DEVELOPMENT AND CONSTRUCTION. THE ASSES SEE DECLARED ITS INCOME FOR AY 2007-08 OF RS. 5,25,128/-, WHILE FILI NG RETURN OF INCOME ON 31.10.2007. THE ASSESSEE CLAIMED DEDUCTION UNDER SE CTION 80IB. THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLE TED UNDER SECTION 143(3) ON 29.12.2009 ACCEPTING THE RETURN OF INCOME . SUBSEQUENTLY, THE ASSESSMENT WAS RE-OPENED UNDER SECTION 147. THE NOT ICE UNDER SECTION 148 ITA NO. 3999 MUM 2019-FACET DEVELOPERS LTD. 3 DATED 18.02.2014 WAS ISSUED AND SERVED UPON THE ASS ESSEE. FOLLOWING THE REASONS OF RE-OPENING WERE RECORDED. IN THIS CASE THE ASSESSMENT WAS COMPLETED U/S 143( 3) OF THE INCOME TAX ACT 1961 ON 22TH DECEMBER 2009 AT A TOTAL INCOME OF RS 525128/-. ASSESSEE HAS FILED RETURN OF INCOME ON 30.10.2007 DECLARING TOTA L INCOME AT 525128/-.PERUSAL OF THE RECORDS REVEAL THAT FOR THE PERIOD UNDER CON SIDERATION THE ASSESSEE HAS SHOWN TOTAL SALES OF RS. 25,77,66,506/- AND NET PRO FIT OF RS. 10,09,11,188/- AS PER P/L ACCOUNT WAS SHOWN. AS PER THE COMPUTATION O F INCOME, NET PROFIT FROM BUSINESS ACTIVITY OF RS. 10.09.11.188/- WAS INCREAS ED TO RS. 10,49,36,726/- BY WAY OF RS. 3,77,692/- ON A/C OF DISALLOWABLE PRIOR PERIOD EXPENSES, RS. 44,2537- ON A/C OF DONATION AND 4,05,423/- ON ACCOU NT OF PROVISION TO GRATUITY. RS. 36,87,656/- ON ACCOUNT PROVISION FOR DOUBTFUL D EBTS AND 35,642/- ON ACCOUNT OF DISALLOWABLE EXPENSES U/S 40A(3). THE DEDUCTION U/S 80IB HAS BEEN CLAIMED ON INCOME OF RS. 10,49,36,726/- IT IS SEEN THAT THE PROFIT AS PER P& L A/C OF RS. 1 0.09 CRORES IS INCLUSIVE OF INCOME ACCOUNTED FOR AS OTHER INCOME OF RS. 40,99,6 35/- OUT OF WHICH ASSESSEE HAS NOT CLAIMED 80LB DEDUCTION ON INCOME OF RS. 5,2 5,128/- WHICH IS ON ACCOUNT OF INTEREST INCOME, THEREFORE ASSESSEE HAS CLAIMED 80LB DEDUCTION ON RS 35,74,507/(40,99,635-5,25,128) FALLING UNDER THE HEAD 'OTHER INCOME'. SECTION 80IB CLEARLY STIPULATES THAT AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE 31.03.01 BY THE LO CAL AUTHORITY SHALL BE ENTITLED TO AVAIL 100% DEDUCTION OF THE PROFITS DER IVED FROM SUCH HOUSING PROJECTS. THE NET PROFIT OF 2007-08 IS INCLUSIVE OF OTHER INCOME OF RS 35,74,5071- VIZ INCOME NOT RELATED TO THE BUILDING OF HOUSING PROJECTS. THIS INCOME IS NOT ELIGIBLE FOR ANY SUCH DEDUCTION U/S 8 0LB AND SHOULD BE TAXED IN THE HANDS OF THE ASSESSEE UNDER THE NORMAL PROVISIO NS OF THE I T ACT, 1961. FAILURE TO DO SO HAS RESULTED IN ESCAPEMENT OF INCO ME TO THAT EXTENT. FURTHER, IT IS OBSERVED THAT THE ASSESSEE HAS CLAIM ED DEDUCTION U/S 80IB TO THE EXTENT OF RS. 10,49,36,726/-. NET PROFIT FROM B USINESS ACTIVITY IS ONLY RS. 10,09,11,188/- AND THE SAME HAS BEEN INCREASED TO A GROSS TOTAL INCOME OF RS. 10,49,36,726/- BY WAY OF RS. 3,77,692/- ON A/C OF D ISALLOWABLE PRIOR PERIOD EXPENSES, RS. 44,253/- ON A/C OF DONATION AND 4,05, 423/- ON ACCOUNT OF PROVISION TO GRATUITY, RS. 36,87,656/- ON ACCOUNT P ROVISION FOR DOUBTFUL DEBTS ITA NO. 3999 MUM 2019-FACET DEVELOPERS LTD. 4 AND 35,642/- ON ACCOUNT OF DISALLOWABLE EXPENSES U/ S 40A(3). THESE DISALLOWANCES DO NOT FALL IN THE CATEGORY OF ELIGIB LE PROFITS DERIVED FROM THE BUSINESS ACTIVITY OF CONSTRUCTION OF BUILDINGS, HEN CE, THESE DO NOT QUALIFY FOR DEDUCTION U/S 80IB OF THE IT ACT, 1961. THE DEDUCTION U/S 80IB IS A 'PROFIT LINKED INCENTIV E' ADMISSIBLE TO ONLY THE ELIGIBLE BUSINESS OF THE ASSESSEE. HERE THE ASSESSE E IS DOING A BUSINESS OF BUILDING AND CONSTRUCTION AND THE PROFIT RESULTING FROM THE SAID ACTIVITY CAN ONLY BE CLAIMED AS DEDUCTION, WHICH IN THE INSTANT CASE IS RS. 10,09,11,188/-. THE AMOUNT OF RS. 3,77,692/-, 44,253/-, RS. 4,05,423/-, 36,87,656/- AND RS. 35,642/- WHICH HAS BEEN CLAIMED ADDITIONALLY, IS BECAUSE OF VIOLATION OF PROVISIONS OF SECTION 40(A)(IA) AND SECTION 40(A) OF THE IT ACT, 1961 AND ON A/C OF DONATION RESPECTIVELY, WHICH IS NOT A PROFIT DERIVED FROM AC TIVITY OF THE ELIGIBLE UNDERTAKING AND HENCE IS NOT ATTRIBUTABLE TO THE PR OFIT OF THE ELIGIBLE UNDERTAKING. THE ASSESSEE HAS INCLUDED AN THE AMOUNT OF RS. 3,77 ,692/-, RS. 4,05,423/-, RS. 36,87,656/- AND RS. 35,642/- AND DISALLOWANCE O N ACCOUNT OF DONATION OF RS. 44,253/-, IN GROSS TOTAL INCOME AND SUBSEQUENTL Y CLAIMED THE SAME ALSO AS DEDUCTION U/S 80IB. THE DISALLOWANCES U/S 40(A) AND 40(A)(IA) CANNOT BE CONSTRUED TO HAVE BEEN DERIVED AS OR INCLUDABLE IN THE PROFIT OF THE ELIGIBLE UNDERTAKING AND DO NOT ENHANCE THE REAL INCOME OF T HE ASSESSEE. FURTHER, DISALLOWANCE OF THESE EXPENSES IS DUE TO NON COMPLI ANCE OF CERTAIN PROVISIONS OF THE ACT, WHICH DOES NOT ENHANCE THE ACTUAL INCOM E OF THE ASSESSEE. THEREFORE THE CLAIM OF THE ASSESSEE FOR 80IB DEDUCTION ON DIS ALLOWANCE ON THE ABOVE MENTIONED DISALLOWANCES AND DONATION IS NOT A VALID CLAIM AND INCOME TO THAT EXTENT HAS ESCAPED ASSESSMENT.' 4. IN RESPONSE TO THE NOTICE UNDER SECTION 148, THE AS SESSEE FILED ITS REPLY DATED 01.03.2014 AND CONTENDED THAT RETURN FILED ON 30.10.2007 MAY BE TREATED AS A RETURN IN RESPONSE TO THE SAID NOTICE. THE ASSESSEE FILED OBJECTION VIDE ITS OBJECTION DATED 11.02.2015. THE OBJECTION OF ASSESSEE WAS DISPOSED OF SEPARATELY. THE ASSESSING OFFICER A FTER SERVING STATUTORY NOTICE UNDER SECTION 143(2) AND 142(1) PROCEEDED FO R RE-ASSESSMENT. THE ITA NO. 3999 MUM 2019-FACET DEVELOPERS LTD. 5 ASSESSING OFFICER IN THE RE-ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 MADE THE FOLLOWING DISALLOWANCE: (A) DISALLOWANCE OF PRIOR PERIOD EXPENSES OF RS. 3,77,6 92/- (B) DISALLOWANCE U/S 37- DONATIONS OF RS. 44,253/- (C) DISALLOWANCE OF PROVISION FOR DOUBTFUL DEBTS OF RS. 36,87,656/- (D) PROVISION FOR GRATUITY OF RS. 4,05,423/- (E) DISALLOWANCE U/S. 40A(3) OF RS. 35,642/-, (F) TREATED THE INTEREST INCOME OF RS. 35,74,507/- AND RS. 15,95,359/- AS INCOME FROM OTHER SOURCES WHICH WAS CLAIMED BY AS SESSEE AS A PART OF PROFIT DERIVED BY ELIGIBLE UNIT UNDER SECTION 80IB . 5. ON APPEAL BEFORE THE LD. CIT(A), THE ACTION OF ASSE SSING OFFICER IN RE- OPENING WAS UPHELD AND OTHER ADDITIONS/DISALLOWANCE AS MENTIONED IN PARA 3 (A) TO (E) WAS ALLOWED (DELETED), HOWEVER, THE TR EATED THE INTEREST INCOME OF RS. 21,20,487/- AS A PART OF PROFIT DERIVED BY E LIGIBLE UNDERTAKING AGAINST THE NET INTEREST INCOME OF RS. 5,25,128/- WAS DISMI SSED. FURTHER, FLAT CANCELLATION RECEIPT WAS NOT HELD AS ELIGIBLE FOR D EDUCTION UNDER SECTION 80IB(10) AND DIRECTED THE ASSESSING OFFICER TO TREA T THE SAME UNDER THE HEAD INCOME FROM OTHER SOURCES. FURTHER AGGRIEVED , THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 6. THE ASSESSEE HAS ALSO FILED AN APPLICATION FOR ADMI SSION OF ADDITIONAL EVIDENCE UNDER RULE 29 OF INCOME TAX RULES. IN THE APPLICATION, THE APPLICANT/ASSESSEE HAS CONTENDED THAT IN RE-OPENING ASSESSMENT ORDER THE ASSESSING OFFICER MADE VARIOUS DISALLOWANCES, THE A DDITION EXCEPT INTEREST INCOME OF RS. 15,95,359/- AS A PART OF PROFIT AND O THER INCOME OF RS. ITA NO. 3999 MUM 2019-FACET DEVELOPERS LTD. 6 35,74,507/- AS A PART OF PROFIT DERIVED BY ELIGIBLE UNDERTAKING WAS DELETED. IT IS FURTHER STATED THAT DURING THE HEARING BEFORE LOWER AUTHORITIES, THE ASSESSEE COULD NOT FILE DETAILS OF OTHER INCOME BEC AUSE THESE WERE OLD RECORD AND ON ACCOUNT OF MERGER OF ASSESSEE WITH OT HER GROUP COMPANIES, RECORDS WERE NOT EASILY TRACEABLE. HENCE, THE LOWER AUTHORITY HAD NO CHANCE TO APPRECIATE SUCH DETAILS. THE ADDITIONAL EVIDENCE HAS A DIRECT BEARING ON THE ISSUE INVOLVED IN THE PRESENT APPEAL AND MAY BE ADMITTED. IN THE APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE, T HE ASSESSEE HAS RELIED UPON THE DECISIONS OF HONBLE MADHYA PRADESH HIGH C OURT IN CIT VS. SATYA SETIA (143 ITR 486) AND HONBLE ANDHRA PRADES H HIGH COURT IN CIT VS. G.V. RATTIAH AND CO. (256 ITR 351). ALONG WITH THE APPLICATION, THE ASSESSEE HAS FILED CHARTS SHOWING THE DETAILS OF MI SCELLANEOUS RECEIPTS FROM CUSTOMER, BANK CHARGES (INCOME), CANCELLATION CHARG ES, DETAILS OF SUNDRY CREDITOR AND OTHER BALANCE WRITTEN OFF. 7. THE LD. AR OF THE ASSESSEE SUBMITS THAT RULE 29 OF INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 EMPOWERED THE BENCH TO ADMIT THE ADDITIONAL EVIDENCE. THE ADDITIONAL EVIDENCE FILED BY ASSESSEE IS RELEVANT AND GOES TO THE ROOT OF THE MATTER. THE ADDITIONAL EVIDENCE MAY BE ADMITTED FOR BETTER APPRECIATION OF THE ISSUE/GROUND RAISED BY ASSESSEE . 8. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUBMI TS THAT IN CASE, THE HONBLE BENCH CONSIDERED THE RELEVANCY OF DOCUMENT FILED BY ASSESSEE BY WAY OF ADDITIONAL EVIDENCE, THE ISSUES WITH REGARD TO WHICH THE ASSESSEE HAS ITA NO. 3999 MUM 2019-FACET DEVELOPERS LTD. 7 FILED ADDITIONAL EVIDENCE MAY BE RESTORED TO THE FI LE OF ASSESSING OFFICER FOR EXAMINATION AND VERIFICATION OF EVIDENCE AND TO PASS THE ORDER AFRESH. 9. WE HAVE CONSIDERED THE CONTENTION OF BOTH THE PARTI ES ON THE APPLICATION OF ADDITIONAL EVIDENCE. WE HAVE NOTED THAT THE LOWER A UTHORITIES TREATED THE INTEREST INCOME AND VARIOUS OTHER RECEIPTS WHICH CO NSIST OF FLAT CANCELLATION CHARGES AND OTHER MISCELLANEOUS INCOME AS INCOME F ROM OTHER SOURCES. CONSIDERING THE RELEVANCY OF STATEMENT FURNISHED BY ASSESSEE WHICH CONSISTS OF DETAILS OF BANK CHARGES RECOVERED, DETA ILS OF CANCELLATION CHARGES, DETAILS OF SUNDRY CREDITORS AND OTHER BALA NCE RETURNED BACK DURING THE RELEVANT FINANCIAL YEAR, WE ADMIT THE PLEA OF A SSESSEE ABOUT ADDITIONAL EVIDENCE. WE HAVE NOTED THAT THE ASSESSEE HAS INFAC T FURNISHED THE STATEMENT OF VARIOUS RECEIPTS IN A TABULATED FORM A ND NO CORRESPONDING EVIDENCE IS PLACED ON RECORD. THUS, WE ADMIT THE PL EA OF ADDITIONAL EVIDENCE AND WILL DEALT WITH THE ISSUE OF ADDITIONA L EVIDENCE AT APPROPRIATE STAGE LATER. 10. WE HAVE ALSO HEARD THE SUBMISSION OF LD. AUTHORIZED REPRESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE ON MERITS I.E. VALIDITY OF RE-OPENING AND OTHER GRO UNDS OF APPEAL. WE HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. AR OF THE ASSESSEE SUBMITS THAT ORIGINAL ASSESSMENT UNDER SECTION 143( 3) WAS COMPLETED ON 22.12.2009 ACCEPTING THE RETURNED INCOME AND ALLOWI NG DEDUCTION OF SECTION 80IB. NOTICE UNDER SECTION 148 WAS ISSUED O N 08.02.2014. THE CASE ITA NO. 3999 MUM 2019-FACET DEVELOPERS LTD. 8 WAS RE-OPENED AFTER 4 YEAR FROM THE END OF RELEVANT ASSESSMENT YEAR. REASONS RECORDED WERE FURNISHED TO THE ASSESSEE VID E LETTER DATED 06.10.2015. ON PERUSAL OF REASONS RECORDED IT IS CL EAR THAT ASSESSING OFFICER WAS OF THE OPINION THAT DISALLOWANCE MADE B Y ASSESSEE IN COMPUTATION OF INCOME IS NOT ELIGIBLE FOR DEDUCTION . THE LD. AR SUBMITS THAT RE-OPENING IS BASED ON AUDIT REPORT. THE ISSUE ON WHICH CASE WAS RE- OPENED AND MENTIONED IN THE REASONS RECORDED WERE A LREADY BEFORE THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT PROCEE DING. THE COMPUTATION OF INCOME REFLECTING THE DISALLOWANCE MADE BY ASSES SING OFFICER WAS BEFORE THE ASSESSING OFFICER. THE REASONS RECORDED WERE MERELY A CHANGE OF OPINION. THE LD. AR FURTHER SUBMITS THAT LD. COM MISSIONER OF INCOME TAX (CIT) HAD ALSO ISSUED A SHOW-CAUSE NOTICE UNDER SECTION 263 ON THE SAME VERY ISSUE FOR A.Y 2008-09. THE ASSESSEE RESPO NDED TO THE NOTICE UNDER SECTION 263 ON 7 TH MARCH 2013 AND 14 TH MARCH 2013. CONSIDERING THE REPLY OF ASSESSEE, THE PROCEEDING UNDER SECTION 263 WAS DROPPED. 11. BEFORE LOWER AUTHORITIES, THE ASSESSEE SUBMITTED TH AT CASE IS RE-OPENED AFTER EXPIRY OF 4 YEARS FROM THE END OF RELEVANT A.Y., IG NORING THE FACT THAT ASSESSEE HAS FURNISHED ALL DETAILS BEFORE COMPLETIO N OF ORIGINAL ASSESSMENT UNDER SECTION 143(3). AFTER THE COMPLETION OF ORIGI NAL ASSESSMENT, NO NEW MATERIAL HAS COME IN THE NOTICE OF ASSESSING OFFICE R, SUGGESTING THAT INCOME HAS ESCAPED ASSESSMENT. SUCH RE-OPENING AFTE R 4 YEARS WHEN ALL ITA NO. 3999 MUM 2019-FACET DEVELOPERS LTD. 9 MATERIAL WERE PLACED BEFORE THE ASSESSING OFFICER I N ORIGINAL ASSESSMENT IS NOT PERMITTED BY LAW. 12. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTAT IVE (DR) FOR THE REVENUE SUPPORTED THE ORDER OF THE LOWER AUTHORITIE S. THE LD DR FURTHER SUBMITS THAT THE LD CIT(A) IN ITS FINDING HAS NOT R AISED QUARRY AND ACCEPTED THE CLAIM OF ASSESSEE WITHOUT VERIFICATION OF FACTS . SO FAR AS THE CONTENTION OF LD AR FOR THE ASSESSEE THAT REOPENING WAS MADE A FTER FOUR YEAR FROM THE END OF RELEVANT ASSESSMENT YEAR AND THERE IS NO ALL EGATION THAT THERE WAS ANY FAILURE ON THE PART OF ASSESSEE IN DISCLOSING F ULL AND TRUE MATERIAL FACTS NECESSARY FOR ASSESSMENT FOR THE YEAR. THE LD DR SU BMITS THAT LD CIT(A) IN PARA 6.3 OF HIS ORDER HAS CLEARLY HELD THAT WHILE S EEKING THE APPROVAL OF COMMISSIONER OF INCOME TAX (CIT) THE ASSESSING OFFI CER CLEARLY RECORDED FOR FAILURE ON THE PART OF ASSESSEE IN DISCLOSING F ULLY AND TRULY MATERIAL FACTS. 13. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTI ES. WE HAVE ALSO DELIBERATED ON THE VARIOUS CASE LAWS RELIED BY THE LOWER AUTHORITIES. IT IS MATTER OF RECORD THAT ORIGINAL ASSESSMENT UNDER SEC TION 143(3) WAS COMPLETED ON 22.12.2009 ACCEPTING THE RETURNED INCO ME AND ALLOWING DEDUCTION OF SECTION 80IB. SUBSEQUENTLY, CASE WAS R EOPENED UNDER SECTION 147. NOTICE UNDER SECTION 148 WAS ISSUED ON 08.02. 2014. THE CASE WAS RE- OPENED AFTER 4 YEAR FROM THE END OF RELEVANT ASSESS MENT YEAR. BEFORE LD CIT(A) THE ASSESSEE SUBMITTED THAT THE CASE WAS REO PENED AFTER 4 YEARS ITA NO. 3999 MUM 2019-FACET DEVELOPERS LTD. 10 FROM THE END OF RELEVANT ASSESSMENT AND THERE IS NO REFERENCE IN THE REASONS RECORDED THAT THERE WAS ANY FAILURE IN DISCLOSING F ULLY AND TRULY ALL THE FACTS. THE LD CIT(A) AFFIRMED THE ACTION OF ASSESSING OFFI CER BY TAKING VIEW THAT THAT WHILE OBTAINING THE APPROVAL OF CIT UNDER SECT ION 151 THE ASSESSING OFFICER HAS CLEARLY HELD THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE IN DISCLOSING FULLY AND TRULY ALL THE MATERIAL FACTS. BEFORE US, THE LD. AR OF THE ASSESSEE WHILE PRESSING APPLICATION FOR ADDITIONAL EVIDENCES VEHEMENTLY ARGUED THAT ALL THE DETAILS, EXCEPT INTEREST INCOM E OF RS. 15,95,359/- AS A PART OF PROFIT AND OTHER INCOME OF RS. 35,74,507/- AS A PART OF PROFIT DERIVED BY ELIGIBLE UNDERTAKING WAS NOT BEFORE LOWER AUTHOR ITIES. THE ASSESSEE COULD NOT FILE DETAILS OF OTHER INCOME BECAUSE THES E WERE OLD RECORD AND ON ACCOUNT OF MERGER OF ASSESSEE WITH OTHER GROUP COMP ANIES, RECORDS WERE NOT EASILY TRACEABLE. HENCE, THE LOWER AUTHORITY HA D NO CHANCE TO APPRECIATE SUCH DETAILS AND THAT THE ADDITIONAL EVIDENCE HAS A DIRECT BEARING ON THE ISSUE INVOLVED IN THE PRESENT APPEAL AND MAY BE ADM ITTED. 14. NOW, WE ARE FACED WITH TWO DIAGONAL SUBMISSIONS ON BEHALF OF THE ASSESSEE AS NOTED ABOVE. CONSIDERING THE FACTS THAT WE HAVE ALREADY ACCEPTED THE PLEA OF ASSESSEE ON APPLICATION FOR ALLOWING FOR FI LING ADDITIONAL EVIDENCE. THEREFORE, WE AFFIRMS THE VIEW OF LD CIT(A) THAT WH ILE OBTAINING THE APPROVAL OF CIT UNDER SECTION 151 THE ASSESSING OFF ICER HAS CLEARLY HELD THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE IN DISCLOSING FULLY AND TRULY ITA NO. 3999 MUM 2019-FACET DEVELOPERS LTD. 11 ALL THE MATERIAL FACTS. HENCE, THE GROUNDS NO. 1 TO 3 IS DECIDED AGAINST THE ASSESSEE. 15. GROUND NO. 4 AND ADDITIONAL GROUND NO. 1&2 RELATES DEDUCTION OF VARIOUS COMPONENTS OF INCOME UNDER SECTION 80IB. CONSIDERIN G THE FACTS THAT THE ASSESSEE IN ITS APPLICATION FOR ADMISSION OF ADDITI ONAL EVIDENCE HAS ACCEPTED THAT THE INTEREST INCOME OF RS. 15,95,359/ - AS A PART OF PROFIT AND OTHER INCOME OF RS. 35,74,507/- AS A PART OF PROFIT DERIVED BY ELIGIBLE UNDERTAKING WAS NOT BEFORE LOWER AUTHORITIES AND TH AT THE ASSESSEE COULD NOT FILE DETAILS OF OTHER INCOME BECAUSE THESE WERE OLD RECORD AND ON ACCOUNT OF MERGER OF ASSESSEE WITH OTHER GROUP COMPANIES, RECO RDS WERE NOT EASILY TRACEABLE, WHICH WE HAVE ACCEPTED. THOUGH, NO DOCUM ENTARY EVIDENCES EXCEPT THE DETAILS OF THE CHART IS FURNISHED BEFORE US, THEREFORE, THESE GROUNDS OF APPEAL ARE RESTORED BACK TO THE FILE OF ASSESSING OFFICER TO DECIDE THE ISSUE AFRESH AFTER VERIFICATION OF FACTS AND EV IDENCES IN ACCORDANCE WITH LAW. THE ASSESSEE IS ALSO DIRECTED TO FURNISH THE E VIDENCE TO SUBSTANTIATE ITS CLAIM. IN THE RESULT THESE GROUNDS OF APPEAL ARE A LLOWED FOR STATISTICAL PURPOSE. 16. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 17. ORDER PRONOUNCED IN THE OPEN COURT ON 20/ 03/2020. SD/- SD/- SHAMIM YAHYA PAWAN SINGH ACCOUNTANT MEMBER JUD ICIAL MEMBER MUMBAI, DATE: 20.03.2020 SK ITA NO. 3999 MUM 2019-FACET DEVELOPERS LTD. 12 COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR A BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI