9911796707
TMI Blog2024 (1) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... of the loan. This was not an issue that was raised before the aforesaid AO dated 27.11.2019 was passed. There was only disclosure in the Financial Statements that were filed by the petitioner before the Assessing Officer before the Assessment Order was passed on 27.11.2019. Notice issued u/s 148 is dated 30.03.2021. It is before the expiry of 4 years. If the income has escaped assessment, invocation of Section 148 of the Income Tax Act, 1961 cannot be interfered. There is no final determination of the tax liability in the impugned order dated 04.02.2022 seeking to reopen the assessment that was completed vide Assessment Order dated 27.11.2019. It is open for the petitioner to urge that the deductions claimed by the petitioner were perfectly in order and therefore question of adding the amounts back to the taxable income of the petitioner would not arise. Therefore, this writ petition is liable to be dismissed. Accordingly, this writ petition is dismissed. Liberty is however given to the petitioner to raise all objections before the Assessing Officer under Section 143(3) r/w 147 148 of the Income Tax Act, 1961 as it stood prior to 01.04.2021. - Honourable Mr. Justice C. Saravanan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and sought adjustment thereof against revenue receipt. Vide present proceedings, the revenue intends to assess these expenses as capital followed by capitalization as WIP. The assessee has objected to the reopening of the assessment on this issue. The assessee has filed written submission giving details about the expenses incurred on marketing and sales office and claimed that these expenses were in the nature of revenue expenditure in respect of the ongoing project. On this issue, it is replied that the expenses as discussed here in above were incurred in respect of the project in respect of which no income was offered in the Financial Year relevant to Assessment Year 2017-18 and as such these expenses should have been capitalized. It is further noted that these expenses were in the nature of Marketing and Sales and having enduring advantage. As such, the classification of such expenses as Capital Expenditure is proposed. Considering the facts of the case, it is recorded that the classification of such expenses as revenue expenses was improper. In view of these reasoning, objections raised not acceptable on this issue. Issue No.2: Capitalisation of Rs. 2,81,66,380/- towards Loan P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. It is therefore submitted that there is no scope for reopening the assessment completed on 27.11.2019 and therefore there is jurisdictional error. 5. It is submitted that the Assessing Officer considered all the issues threadbare before passing Scrutiny Assessment Order on 27.11.2019 under Section 143(30) of the Income Tax Act, 1961. It is therefore submitted that the question of re-opening the assessment under Section 148 of the Income Tax Act, 1961 cannot be countenanced. 6. The petitioner has incidentally filed an appeal before the Appellate Commissioner in I.T.A.No.10138 of 2019-2020 against the Assessment order dated 27.11.2019 which has now been transferred to the National Faceless Assessment Appeal Centre and is yet to be adjudicated. 7. The learned counsel for the petitioner would submit that out of two issues which were flagged vide notice issued under Section 143(2) read with Section 147 of the Income Tax Act, 1961 on 30.04.2021, the first issue related to expenses incurred by the petitioner towards Model Flat and New Sales Office Express Exclusive. 8. The learned counsel for the petitioner would submit that the expenses claimed as deduction was partly disallowed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment Year (relevant financial year 2016- 2017) and therefore the question of claiming expenses did not arise as it is contrary to the accounting standards. 16. It is submitted that at the time of scrutiny assessment on 27.11.2019, the Assessing Officer was merely examining the amounts shown as expenses incurred towards Model Flat advertising, Marketing Expenses and New Sales office etc. 17. It is further submitted that the petitioner has not disclosed the income that the petitioner would have generated immediately after the project was launched during the financial year 2016-2017. 18. The learned Senior Standing Counsel for the respondents further submits that under proviso to Section 147 of the Income Tax Act, 1961 as it stood prior to 01.04.2021, it is clear that in terms of Explanation 2 to sub clause (c) to the third proviso to Section 147 as it stood then, it shall be deemed that where an assessment has been made but the income chargeable to tax has been under assessed, it shall deemed to be a case where income chargeable to tax had escaped assessment. It is therefore submitted that even in case where four years had lapsed the respondents were entitled to reopen the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of Financial statement that the company has debited the finance cost of Rs. 12,34,07,931/- (Express Exclusive Project) in the P L account and the same was transferred to WIP of Express Exclusive project. However, it is seen that a sum of Rs. 2,81,66,330/- towards Loan processing charges is omitted to be capitalised (i.e.) transferred to WIP of Express Exclusive Project. Further, it is found from the P L account that a sum of Rs. 25,23,569/- is debited as Corporate Social Responsibility in the FY relevant to the AY 2017-18. However, it is observed from the computation statement that a sum of Rs. 9,42,569/- towards CSR expenses is only added back to total income. Hence, the balance amount of Rs. 15,81,000/- [Rs. 25,23,569 Rs 9,42,569] is required to be added back to total income. 23. In the assessment, that was completed on 27.11.2019, one of the issue related to deduction claimed by the petitioner for a sum of Rs. 6,13,52,886/- towards advertising and marketing expenditure for Model Flat measuring an extent of 5372 sq.ft. at Rs. 11,420 per sq.ft. 24. While passing the Assessment Order dated 27.11.2019, the Assessing Officer held that the cost per sq.ft. arrived Rs. 11,420/- per ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
