2017 (7) TMI 1432 - AT - Income Tax

Revision u/s 263 by CIT - Deduction u/s 80IB(10) - HELD THAT - There is a specific reference to the examination by the AO of deduction u/s 80IB(10) - Conclusion of CIT therefore that the AO failed to make proper enquiries before concluding the assessment, cannot be sustained. We are also of the view that the non issuance of notice u/s 133(6) in respect of advance received from the customers or not making any enquiries thereon by itself cannot be the basis to say that there was a failure on the part of AO to make proper and necessary enquiries. A reading of notice issued u/s 142(1) by the AO before completing assessment u/s 143(3) of the Act and the details furnished by the assessee in response to this notice clearly shows that the AO was fully conscious of the details of advance received from the customers furnished by the assessee. There are no facts brought out on record to show that further enquiry was required to be made by the AO on the details of advance from the customers furnished by the assessee. We are of the view that order of CIT is a non-speaking order and does not discuss how the order of AO passed u/s 143(3) of the Act was erroneous and prejudicial to the interest of the revenue. In these circumstances, we quash the order passed u/s 263 of the Act and allow the appeal of assessee.

Summary

Issues involved:
1. Assessment u/s 263 of the Income Tax Act, 1961 for A.Y. 2012-13.
2. Claim of deduction u/s 80IB of the Act.
3. Examination of advance received from customers.

Analysis:
1. The appeal was against the order of Pr. C.I.T., Kolkata-4 passed u/s 263 of the Income Tax Act, 1961 for A.Y. 2012-13. The Assessee, a real estate company, filed a return showing total income of Rs.39,290. The assessment completed u/s 143(3) applied Minimum Alternate Tax on a book profit of Rs.1,21,24,731, resulting in a tax liability of Rs.24,25,890.

2. The Assessee claimed deduction u/s 80IB for profits from housing projects. The AO observed the deduction and verified the details submitted. However, the CIT found the AO's order erroneous as Form No. 10CCB was not submitted, and no queries were raised regarding the deduction during assessment.

3. The CIT also noted the advance received from customers, but criticized the AO for not issuing a notice u/s 133(6) or making further inquiries. The Assessee responded, providing Form 10CCB and details of advances during assessment. The CIT set aside the AO's order for reexamination.

4. The Tribunal held that the AO properly examined the deduction u/s 80IB and details of advances. The AO's order referenced the examination, and the CIT's conclusion of inadequate inquiry was unfounded. The non-issuance of a notice u/s 133(6) did not indicate a failure in necessary inquiries. The CIT's order lacked reasoning and was non-speaking, leading to the appeal's allowance.

5. Ultimately, the Tribunal quashed the CIT's order u/s 263 and allowed the Assessee's appeal, emphasizing the sufficiency of the AO's inquiries and the lack of basis for the CIT's decision.

This detailed analysis covers the issues of assessment under the Income Tax Act, claim of deduction u/s 80IB, and examination of advance received from customers, providing a comprehensive understanding of the judgment.