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TMI Blog2024 (4) TMI 752X X X X Extracts X X X X X X X X Extracts X X X X ..... y a letter dated 13th March 2015 further details were submitted to the Assessing Officer. This was followed by a show cause notice dated 24th March 2015 to petitioner calling upon petitioner to show cause as to why, (i) profit on the percentage completion method should not be brought to tax in hands of petitioner; (ii) transfer of proportionate undivided rights in the land in favour of the buyers should not be brought to tax as profit from the project constructed by petitioner; (iii) profits from the project should not be brought to tax as profit from the project constructed by petitioner; and (iv) the right on the property as per agreement dated October 2009 should not be treated as extinguished in favour of the buyers as per the agreements entered with them and gains from such extinguishment should not be brought to tax. 2. Petitioner replied to the show cause notice. In short, it was petitioner's case that no income arose to petitioner from the project "Lodha Supremus" as petitioner had only constructed the project on behalf of its shareholders, i.e., SNCML, with shareholders' funds. 3. An assessment order dated 31st March 2015 came to be passed under Section 143(3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeals for Assessment Years 2011-2012, 2013-2014 and 2014-2015 were pending before the ITAT and as the assessment was getting time barred and to safeguard the interest of the Revenue, the assessment was reopened. 6. By a letter dated 15th October 2019 petitioner filed its objections to the proposed reopening which came to be rejected by an order dated 20th November 2019. This order of rejection and the notice under Section 148 of the Act was challenged by filing a Writ Petition No. 3585 of 2019. During the pendency of the said petition, the ITAT, by an order dated 2nd December 2020, was pleased to dismiss the appeals filed by respondent no. 1 for Assessment Years 2011-2012, 2013-2014 and 2014-2015. By the said order, the ITAT decided the three issues raised for reason to believe escapement of income in favour of petitioner. Therefore, this Court, by an order dated 25th January 2022, disposed the writ petition by directing the Assessing Officer, who had proposed to reopen due to the pendency of the appeals before the ITAT, to pass a fresh order on objections after considering the objections already filed alongwith further objections to be filed by which he could consider the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable to petitioner vide letter dated 30th September 2019. We are satisfied that not only does the reason not specifically state that there was any failure on the part of assessee to disclose fully and truly all material facts, reading the entire reasons there is no cogent and clear indication that infact there was failure on the part of assessee to disclose fully and truly all material facts necessary for its assessment. 10. The three notices dated 17th July 2014, 29th October 2014 and 3rd March 2015 under Section 142(1) of the Act were issued to petitioner calling upon petitioner to furnish various details. By its letters dated 2nd February 2015, 16th February 2015, 16th February 2015, 9th February 2015 and 23rd February 2015 and 13th March 2015 petitioner provided all the details. Petitioner was even served with a show cause notice dated 24th March 2015 to which also petitioner replied. The issues raised in the reasons to believe were certainly subject matter of consideration during the assessment proceedings. Infact in the reasons it is admitted that these three issues were subject matter of assessment proceedings. 11. On the first item relating to 8% profit treating assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a specific query made by the Assessing Officer, the petitioner has disclosed in detail as to why its profit on sale of investments should not be taxed as business profits but charged to tax under the head capital gain. In support of its contention the petitioner had also relied upon CBDT Circular No. 4/2007 dated 15 June 2007. (The reasons for reopening furnished by the Assessing Officer also places reliance upon CBDT Circular dated 15 June 2007). It would therefore, be noticed that the very ground on which the notice dated 28 March 2013 seeks to reopen the assessment for assessment year 2008-09 was considered by the Assessing Officer while originally passing assessment order dated 12 October 2010. This by itself demonstrates the fact that notice dated 28 March 2013 under Section 148 of the Act seeking to reopen assessment for A.Y. 2008-09 is based on mere change of opinion. However, according to Mr. Chhotaray, learned Counsel for the revenue the aforesaid issue now raised has not been considered earlier as the same is not referred to in the assessment order dated 12 October 2010 passed for A.Y. 2008-09. We are of the view that once a query is raised during the assessment proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng additions : (1) 8% profit treating contractor. (2) Addition as per A.Y. 2012-13. (3) Proportionate income. (4) Loss claimed. (5) Capital gain Assessee preferred an appeal before the CIT(A) and the CIT(A) deleted the following additions : (1) 8% profit treating contractor. (2) Addition as per A.Y. 2012-13. (3) Proportionate income. (4) Capital gain The Revenue preferred an appeal for Assessment Years 2011-2012, 2013-2014 and 2014-2015 before the ITAT and the same were pending. Since the issues were involved in this year also, i.e., Assessment Year 2012-2013, and the case was getting barred by limitation for reopening under Section 147 of the Act, to safeguard the interest of Revenue, this case is being proposed for reopening on the following issues : (1) 8% profit treating contractor. (2) Proportionate income. (3) Capital gain 13. Admittedly, the ITAT has now held against the Revenue. Therefore, the entire basis for reopening has collapsed. The Revenue's case that an appeal has been filed in this Court challenging the orders passed by the ITAT for Assessment Years 2011-2012, 2013-2014 and 2014-2015 will not be of any help because admittedly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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