9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (6) TMI 452 - AT - Income TaxReopening of assessment - Deduction under section 80IB(10) allowed excessively to the extent that it is beyond the amount of income under the head business or profession - CIT(Appeals) allowing assessee s claim for deduction under section 80IB(10) to the extent of gross total income and not restricting the same to extent of income under the head business and profession - Held that - It is a trite law that reason to believe referred to in Sec. 147 of the Act is one which is prudent and plausible in law and not based on any misconception either in law or on facts. In the present case, the reasons recorded clearly suggest that Assessing Officer is under a misconception in inferring that there is an excessive grant of deduction u/s 80IB(10) of the Act. Ostensibly, the proposition in the mind of the Assessing Officer is not borne out of the bare phraseology of the relevant provisions, as we have seen in the earlier part of this order, and rather, it is contrary to the legal position approved by the Hon ble Bombay High Court in the case of J.B. Boda & Co. Pvt. Ltd. (2010 (10) TMI 1102 - BOMBAY HIGH COURT ). In view of the aforesaid discussion, in our view, the reasons recorded by the Assessing Officer suffer from an infirmity of being misconceived in law and, therefore, initiation of proceeding thereupon is bad in law. Consequently, the assessment finalised by the Assessing Officer u/s 143(3) r.w.s. 147 of the Act dated 6.12.2012 is held to be invalid and bad in law, and is hereby set-aside - Decided in favour of assessee.
Issues Involved:
1. Deduction under section 80IB(10) of the Income Tax Act. 2. Validity of proceedings initiated under section 147/148 of the Income Tax Act. Issue-wise Detailed Analysis: 1. Deduction under Section 80IB(10) of the Income Tax Act: The primary issue in the Revenue's appeal was the CIT(Appeals)' decision to allow the assessee's claim for deduction under section 80IB(10) to the extent of the gross total income of ?71,99,25,721/- and not restricting it to ?68,18,56,583/-, which is the income under the head 'business and profession'. The assessee, a company engaged in construction and property development, had its total income determined at ?10,59,17,950/- in an initial assessment, which included a relief under section 80IB(10) amounting to ?71,99,25,721/-. The Assessing Officer (AO) later reassessed the income at ?14,36,67,009/- and restricted the relief under section 80IB(10) to ?68,18,56,583/-. The AO's stand was that the deduction under section 80IB(10) should be restricted to the income under the head 'business or profession'. However, the assessee contended that the deduction should be allowed to the extent of the gross total income. The CIT(Appeals) upheld the assessee's claim, leading to the Revenue's appeal. The Tribunal examined the provisions of section 80IB(10) and the scheme of deductions under Chapter VI-A of the Act. It noted that section 80A(1) prescribes that deductions should be allowed from the gross total income, and section 80A(2) limits the aggregate deductions to the gross total income. The definition of 'gross total income' in section 80B(5) further supports this interpretation. The Tribunal concluded that the CIT(Appeals) was correct in allowing the deduction to the extent of the gross total income, as the provisions do not restrict it to the income under the head 'business or profession'. The Tribunal also referenced the Hon'ble Bombay High Court's decision in the case of M/s. J.B. Boda & Co. P. Ltd., which supported the view that deductions under Chapter VI-A should be allowed to the extent of the gross total income. Thus, the Tribunal upheld the CIT(Appeals)' decision and dismissed the Revenue's appeal. 2. Validity of Proceedings Initiated under Section 147/148 of the Income Tax Act: The assessee's cross-objection challenged the validity of the proceedings initiated by the AO under section 147/148. The original assessment had allowed the deduction under section 80IB(10) as claimed by the assessee. The AO later issued a notice under section 148, reopening the assessment on the grounds that the deduction should have been restricted to the income under the head 'business or profession'. The assessee argued that the reopening was based on material already on record and amounted to a mere change of opinion, which is not permissible. The Tribunal examined the reasons recorded by the AO, which suggested a misconception in law regarding the deduction under section 80IB(10). The Tribunal noted that the AO's belief of escapement of income was not well-founded and was contrary to the legal position approved by the Hon'ble Bombay High Court. The Tribunal concluded that the reasons recorded by the AO were misconceived in law, rendering the initiation of proceedings under section 147/148 invalid. Consequently, the reassessment order dated 6.12.2012 was set aside, and the assessee's cross-objection was allowed. Conclusion: The Tribunal dismissed the Revenue's appeal and allowed the assessee's cross-objection, holding that the deduction under section 80IB(10) should be allowed to the extent of the gross total income and that the initiation of proceedings under section 147/148 was invalid.
|
