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TMI Blog2022 (5) TMI 1144X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction qua the charges received by the assessee for provision of various facilities, i.e., pipelines, electricity and stilt parking facilities - We are of the considered view, that as observed by the CIT(Appeals), and rightly so, now when the provision of the aforesaid facilities forms part and parcel of the approval of Nagar Niyojan Avam Vikas Raipur vide Anugya , dated 23.01.2004, of the housing project in question and, the assessee in terms of the approval of his project was obligated to provide such services, therefore, the same would be eligible for deduction u/s. 80IB(10) - Decided in favour of assessee. - ITA Nos. 08 & 09/RPR/2017 - - - Dated:- 9-5-2022 - Shri Ravish Sood, Judicial Member And Shri Jamlappa D Battull, Accountant Member For the Assessee : Shri G.S. Agarwal, AR For the Revenue : Shri G.N Singh, DR ORDER PER RAVISH SOOD, JM: The captioned appeals filed by the revenue are directed against the consolidated order passed by the CIT (Appeals)-1, Raipur dated 14.08.2016, which in turn arises from the respective orders passed by the A.O under Sec.143(3)/147 of the Income-tax Act, 1961 (in short the Act ) dated 09.03.2015 for assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basis of his aforesaid observation, the A.O vide his order u/ss. 143(3)/147, dated 09.03.2015 determined the income of the assessee at Rs.1,42,31,990/-. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals). Before the CIT(Appeals), the assessee assailed the validity of jurisdiction that was assumed by the A.O for reopening of its concluded assessment u/s.147 of the Act, as well as challenged the addition qua the merits of the case. After giving a thoughtful consideration, the CIT(Appeals) found favour with the claim of the assessee that the A.O had wrongly assumed jurisdiction by reopening its concluded assessment on the basis of a mere change of opinion . It was noticed by the CIT(Appeals) that the reopening of the assessee s case was not on the basis of any new material coming to the notice of the A.O, but on the basis of the same set of facts that were available on record at the time of framing of assessment by him. It was further observed by the CIT(A) that the genesis of the reopening of the concluded assessment could be traced in an audit objection that was raised by the ITRAP-1, Raipur. Accordingly, the CIT (Appeals) relying on certain ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a substitution of a view as that of a predecessor by a successor A.O cannot form a justifiable basis for reopening the case of an assessee. In fact, we find that the Hon'ble Supreme Court in its landmark judgment in the case of CIT Vs. Kelvinator of India (2010) 320 ITR 561 (SC) had held, that merely on the basis of a change of opinion the case of an assessee cannot be reopened, observing as under:- On going through the changes, quoted above, made to s. 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, reopening could be done under above two conditions and fulfilment of the said conditions alone conferred jurisdiction on the AO to make a back assessment, but in s. 147 of the Act (w.e.f. 1st April, 1989), they are given a go by and only one condition has remained, viz., that where the AO has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post 1st April, 1989, power to reopen is much wider. However, one needs to ITA No.1212/Mum/2019 A.Y. 2012- 13 M/s Medley Pharmaceuticals Ltd. Vs. DCIT-10(2)(2) give a schematic interpretation to the words reason to believe failing which, we are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ull bench of the Hon ble High Court of Delhi in the case of Kelvinator of India (supra), which as observed by us hereinabove had been upheld by the Hon ble Apex Court, the Hon'ble High Court of Bombay in the case of Asteroids Trading Investment P. Ltd. Vs. DCIT (2009) 308 ITR 190 (Bom), had held, that an A.O is precluded from assuming jurisdiction to initiate reassessment proceedings on the basis of a change of opinion , observing as under: 8. Perusal of the record shows that the petitioner had made full disclosure necessary for claiming deduction under s. 80M. The AO after applying his mind to the relevant records had made a specific order allowing the deduction. A perusal of the record shows that now respondent No. 1 proposes to reopen the assessment because according to him deduction under s. 80M was wrongly allowed, and, therefore, he was of the opinion that the income has ITA No.1212/Mum/2019 A.Y. 2012-13 M/s Medley Pharmaceuticals Ltd. Vs. DCIT-10(2)(2) escaped assessment. Though, in the notice respondent No. 1 has used the phrase reason to believe , admittedly between the date of the order of assessment sought to be reopened and the date of forming of opinion by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n cannot be allowed. In our opinion, therefore, in the present case also, it was not permissible for respondent No. 1 to issue notice under s. 148 . Further, the Hon'ble High Court of Bombay in the case of ICICI Prudential Life Insurance Co. Ltd. Vs. ACIT (2010) 325 ITR 471 (Bom), relying on the judgment of the Hon ble Supreme Court in the case of Kelvinator of India (supra), had held as under: 23. Though the power to reopen an assessment within a period of four years of the expiry of the relevant assessment year is wide, it is still structured by the existence of a reason to believe that income chargeable to tax has escaped assessment. The Supreme Court, in a recent judgment in Kelvinator of India Ltd. (supra) while drawing upon the legislative history of s. 147 held that the expression reason to believe needs to be given a schematic interpretation in order to ensure against an arbitrary exercise of power by the AO. The judgment of the Supreme Court emphasises that the power to reopen an assessment is not akin to a power to review the order of assessment and a mere change of opinion would not justify a recourse to the power under s. 147. Unless the AO has tangible mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ettled position of law is impermissible. No tangible material is shown on the basis of which the assessment is sought to be ITA No.1212/Mum/2019 A.Y. 2012-13 M/s Medley Pharmaceuticals Ltd. Vs. DCIT-10(2)(2) reopened. In the absence of tangible material, what the AO has done while reopening the assessment is only to change the opinion which was formed earlier on the allowability of the deduction. The power to reopen an assessment is conditional on the formation of a reason to believe that income chargeable to tax has escaped assessment. The power is not akin to a review. The existence of tangible material is necessary to ensure against an arbitrary exercise of power. There is no tangible material in the present case. 8. At this stage, we may herein observe, that as per the mandate of law, even where a concluded assessment is sought to be reopened by the A.O within a period of 4 years from the end of the relevant assessment year, it is must that the A.O has fresh material or information with him, that had led to the formation of belief on his part that the income of the assessee chargeable to tax has escaped assessment. Our aforesaid view is fortified by the judgments of the Hon& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lities which need to be provided by the builder. The builder is under obligation as per agreement/memorandum entered into with customers or assurance given through advertisements/broachers to provide various kinds of facilities which may be basic facilities of electric supply, substation, maintenance etc. or more modern facilities such as parking lots, recreation areas, centralized air conditions etc. These are part and parcel of the housing project and without which the project would not be complete and would not sell. Builder received not only the cost of the houses but also charge towards these facilities and various other charges such as development charges, legal charges, society formation charges etc. these are all very much related to the project. It may be noted that Section 80Ib910) speaks of a building project and not just buildings. Therefore, the charges received by the builder are very much part of the project and eligible for deduction u/s.80IB(10). Accordingly, ground taken by the appellant are allowed and addition made by the AO are deleted. After giving a thoughtful consideration to the aforesaid observations of the CIT(Appeal), we concur with the view taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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