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TMI Blog2014 (11) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... n cash - Even the assessee had properly explained and reconciled the figures before the CIT(A) - there was no reason to believe that the income of the assessee had escaped assessment. Revenue could not draw any document on the file which was found during the second survey action from which it can be said that the AO had reasons to believe that the income of the assessee had escaped assessment - the AY in question being 2004-05, the clause ‘d’ was inserted to section 80IB(10) from 01.04.05 had prospective effect and the assessee was even entitled to claim deduction on the commercial area as decided in CIT v. Brahma Associates [2011 (2) TMI 373 - BOMBAY HIGH COURT] - the deduction u/s 80IB(10) is allowable to a housing project approved by the local authority having residential units with commercial user to the extent permitted under the Development Control rules/regulations framed by the respective local authority and that the clause ‘d’ was not applicable to the projects approved before the insertion of the said clause i.e. from 01.04.05 - the assessee itself has not claimed any deduction in respect of the commercial area - so far the reopening of the assessment is concerned, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red at ₹ 1,10,71,502/-. In the second revised return, the deduction u/s.80IB(10) was further reduced by ₹ 48,17,000/-. This reduction was made on account of the profit attributable to non residential area, car parking and deposits received from purchasers of various units / flats in the housing project developed by the assessee by the name Ekta Bhoomi Classic . The assessment was completed by the A.O. on 31.3.06 wherein the total income was determined at ₹ 1,10,71,502/- which was the amount of income declared in the second revised return of income filed by the assessee allowing the deduction u/s.80IB(10) at ₹ 84,81,101/-. 4. Again a survey u/s.133A was carried out on 27.09.2006 by the DDlT (lnv),Unit- IV(3), Mumbai. This survey was carried out in the group cases of the assessee. After receipt of the report of survey action, the case of the assessee was reopened u/s.147. Though it was claimed by the Revenue that the notice u/s.148 was issued on 2/7/2008 by the then A.O, however, the assessee claimed that the same was not served upon it. A letter dated 6/1112009 was written by the AO to the assessee wherein it was further stated that the assessee did not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . was wrong. The view was based on wrong appreciation of facts and evidence. Further that no cash amount of ₹ 10,95,000/- was received by the assessee. The alleged loose papers did not suggest that any cash amount was received. The AR further explained the figure of ₹ 10,95,000/- to the Ld. CIT(A) stating that the agreement value of the flats in question was more than the stamp duty recknor value. Both the figures were written side by side. All the payments were duly accounted for and there was no receipt of any cash payment. After going through the submissions of the Ld. A.R. and the evidences on the file, the Ld. CIT(A) held that the reopening in this case was bad in law and that there was no reason to believe that the income of the assessee had escaped assessment. The relevant part of the findings of the Ld. CIT(A) for the sake of convenience is reproduced as under: 6. I have considered the submissions of the appellant and perused the reassessment order and also gone through the reasons recorded for reopening the assessment. From the perusal of the reasons recorded and the reply of the appellant submitted to the A.O, it is seen that in the original assessment pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ea was considered as non residential area in the original assessment proceedings and the appellant included this area for the purpose of arriving at the profit attributable to non residential area on which the appellant did not claim deduction u/s.80IB(10). The relevant chart of the working of residential and non residential area and profit attributable to non residential area has been placed in the paper book at page 149 which shows that profit attributable to non residential area was worked out at ₹ 62,54,502/- and this is the amount on which no deduction was claimed u/s.80IB(10) in first revised return filed by the appellant on 6/1/2006. Thus the profit attributable to the area of Upasana (Prayer Hall) constructed by the appellant in place of flat No. 105 106 in 'B' wing was included in the profit amount of ₹ 62,54,502/- and this area was considered as non residential area. After filing this revised return of income a survey was conducted on 3/2/2006 and the deduction was further reduced for the car parking, deposits etc. In view of all these facts on record it is clear that the assessee has not claimed deduction on the profit attributable to the area of Up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igation wing has also no substance. The relevant impounded page is page 89, copy of which was furnished in the paper book by the appellant. Perusal of the said page would show that the following notings are there on this page. Rajul Shah 5,05,000 4,00,000 Nirav Modi 1,90,000 10,95,000 This is the amount which was added by the ld. A.O. in the reassessment made and this is one of the reasons for reopening the assessment. Perusal of this further shows that except the above notings, nothing has been written about these figures as to whether the figures are the amount in rupees. It is not clear whether these figures denote any receipt or any payment nor these figures are indicative of any amount received in cash or in cheque. Nowhere on this page above, below or on both sides of these figures it is written that this is the amount received in cash. The word cash is nowhere written on this page. Thus these figures are not indicative of any cash receipt as alleged by the ld. A.O. Thus prima facie, leave aside the explanation submitted by the appellant, it cannot be inferred that the figure of 10,95,000 represents the amount in rupees which was received by the appellant in cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso to section 147 of I.T.Act, 1961 reads as under:- 'Income escaping assessment 147 ......... Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year .. In view of the above discussion and the relevant facts on record I am of the considered opinion that there is no failure on the part of the appellant do disclose fully and truly all material facts necessary for the assessment in the original assessment proceedings completed u/s.143(3). Therefore the case of the appellant squarely falls within the meaning of proviso to section 147 and in my considered view the proceedings initiated u/s 147 for reopening the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r such circumstances, the Ld. CIT(A) held that there was no reason to believe that the income of the assessee had escaped assessment. The ld. D.R could not draw our attention to any document on the file which was found during the second survey action from which it can be said that the AO had reasons to believe that the income of the assessee had escaped assessment. Even the Ld. A.R. has further brought to our notice the flat that the assessment year in question being 2004-05, the clause d was inserted to section 80IB(10) from 01.04.05 had prospective effect and the assessee was even entitled to claim deduction on the commercial area in view of the law laid down by the Hon ble Bombay High Court in the case of CIT v. Brahma Associates (2011) 333 ITR 289 (Bomb.) wherein the Hon ble Bombay High Court has held that the deduction under section 80IB(10) is allowable to a housing project approved by the local authority having residential units with commercial user to the extent permitted under the Development Control rules/regulations framed by the respective local authority and that the clause d was not applicable to the projects approved before the insertion of the said clause i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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