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2018 (4) TMI 458 - HC - Income TaxReopening of assessment - completion of project Sai Swar - assessment year - Held that - Finding of fact by the Tribunal in its order dated 2nd August, 2013 for the Assessment Year 2009-10 has not been challenged by the Revenue. This, in spite of the fact that the Revenue has preferred an Appeal from the order of the Tribunal dated 2nd August, 2012 in respect of Assessment Year 2009-10 to this Court being Income Tax Appeal No.385 of 2014. In fact, in its above appeal, no grievance was made by the Revenue in respect of the finding of the Tribunal that project Sai Swar was being completed in the Assessment Year 201011. This finding of fact by the Tribunal that the project Sai Swar was completed in the Assessment Year 201011 having being accepted by the Revenue in its order for the Assessment Year 2009-10, it is not now open to challenge the finding in the earlier order by way of the present proceedings. This is a concluded issue. In view of the aforesaid finding of fact in order dated 2nd August, 2012 (accepted on the above issue by the Revenue) ,the entire basis of reasons for reopening the Assessment for Assessment Year 2008-09 falls to the ground.
Issues involved:
1. Reopening of assessment under Section 147 of the Income Tax Act. 2. Deletion of addition on account of profit from a project. 3. Deletion of disallowance of loss under a project. Analysis: Issue 1: The Respondent-Assessee, a builder and developer, filed its return of income for Assessment Year 2008-09, which was accepted and processed by intimation under Section 143(1) of the Act. Subsequently, the Assessing Officer issued a notice under Section 147 read with Section 148 of the Act to reopen the assessment for the same year. The reasons for reopening included discrepancies in the completion status of a project and the income declared by the Assessee. The Assessing Officer sought to tax the entire income from the project in the Assessment Year 2008-09. The Respondent objected to this, but the Assessing Officer proceeded to assess the income. The CIT(A) upheld the assessment, but the Tribunal, relying on a previous order for a different assessment year, allowed the appeal, stating that the reasons for reopening the assessment were unfounded. The Tribunal's finding was based on a concluded issue accepted by the Revenue in a previous appeal. Therefore, the Tribunal's decision to set aside the reopening of the assessment was upheld. Issue 2: The Tribunal also deleted the addition on account of profit from a project, stating that the reopening notice was without jurisdiction. Since the reopening notice was found to be invalid, the issues related to the addition of profit could not be sustained. The Court referred to a previous case law to support this conclusion. As a result, the questions regarding the addition of profit did not give rise to any substantial questions of law and were not entertained. Issue 3: Similarly, the questions related to the disallowance of loss under a project were not considered as the reopening notice was deemed invalid. The Court held that since the basis for the reassessment was found to be flawed, the issues regarding the disallowance of loss could not be upheld. Citing relevant case law, the Court dismissed these questions as they did not raise any substantial questions of law. In conclusion, the appeal challenging the order of the Income Tax Appellate Tribunal was dismissed, and no costs were awarded. The Court upheld the Tribunal's decision to set aside the reopening of the assessment and to delete the additions on account of profit and loss under the project due to the invalidity of the reopening notice.
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