9911796707
TMI Blog2025 (2) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... te and has filed his return of income on 27 September 2013 declaring total income of Rs.54,91,960/-. On 31 December 2015, an assessment order under Section 143 (3) of the Act came to be passed accepting the return income. Proceedings u/s 263 : 4. On 29 November 2017, a notice under Section 263 of the Act came to be issued by the Commissioner of Income Tax on the ground that M/s. Orchid Builders and Developers has sold 6 flats on behalf of the petitioner for Rs. 2,74,94,950/-. However, the same is not reflected in the profit and loss account for the year ending 31 March 2013. The notice further seeks to examine disallowance on account of interest payment and proposes to examine income from house property which was not offered for tax. The petitioner filed his reply to the said show cause notice vide letter dated 1 March 2018. On 16 March 2018, an order under Section 263 was passed by the Commissioner of Income-tax setting aside the assessment order with a direction to conduct proper inquiries, investigation and examine all the issues raised in 263 notice and pass a fresh order. Pursuant to the said direction, Assessing Officer on, 14 December 2018, passed an assessment order under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings were bad-in-law. 8. Ms. Pawar further submitted that the issue for which reopening is sought was subject matter of not only proceedings under Section 263 of the Act but also an order passed pursuant to the directions under Section 263 of the Act and, therefore, the impugned proceedings are based on change of opinion. She further submitted that the reliance placed by the respondent on the Supreme Court's decision in the case of Kalyanji Mavji & Co. (supra) is no more a good law as per the decision of the Supreme Court in the case of Indian & Eastern Newspaper Society Vs. Commissioner of Income-tax (1979) 2 Taxman 197 (SC). Therefore, she submitted that the impugned notice should be quashed. 9. In support of her submissions, she relied upon the following case laws :- i. ACIT, Circle 12(3)(2) Vs Marico Ltd. (2021) 133 taxmann.com 122 (SC). ii. CIT, Delhi Vs Kelvinator of India Ltd. (2010) 187 Taxman 312 (SC). iii. PCIT Vs State Bank of India (2022) 145 taxmann.com 33 (SC) iv. State Bank of India Vs ACIT, Circle 2(2)(1), Mumbai (2019) 103 taxmann.com 164 (Bombay) v. ITO Vs Lakhmani Mewal Das (1976) 103 ITR 437 (SC) vi. Hindustan Lever Ltd. Vs R.B. Wadkar (2004) 137 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny expenses in addition to Rs. 2,30,00,000/- as settlement compensation from Orchid Builders and Developers to assessee. In view of the above, it is clear that assessee did not incur any expenses against the receipt of Rs. 2,74,94,950/- from sale of six flats. The entire income should have been taxed in the hands of the assessee, as out of 38 flats, 6 flats have been sold during the year and the closing stock has been shown at Rs. 1,66,88,066/- from which it can be presumed that out of total 38 flats only a few flats are remaining to be sold which has been shown as closing stock. From the above, it is clear that assessee has already sold out major portion of the flats out of 38 flats owned by him and receipt from remaining flats is not offered by the assessee. Therefore, the receipts of Rs. 2,74,94,950/- should have been fully offered for taxation, since the assessee has not incurred any expenses on the same. It is further observed that CIDCO had allotted plot of land No. 63, Sector-14, Koparkhairne, Navi Mumbai admeasuring 2299 square meters to Shivshankar CHS Ltd. comprising 30 project affected persons of Village Koperkhairane, Navi Mumbai under 12.5% scheme. Assessee vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - against unsecured loan. On perusal of the balance sheet it is seen that an amount of Rs. 5,23,44,852/- has been received by the assessee from customers and the same is lying with the assessee at his disposal whereas assessee has shown unsecured loan of Rs. 2,18,68,679/- against which interest of Rs. 15,69,923/- has been paid. From the above, it is clear that assessee does not require any unsecured loan for the purpose of current ongoing project. The balance sheet also shows an amount of Rs. 2,30,94,340/- as Loans and Advances and no interest from this loan and advances has been earned during the year. The case has been selected for scrutiny under CASS for the reason "large increase of unsecured loan". Assessee's current assets including loans and advances is shown at Rs. 9,30,42,313/-. Accordingly, the interest paid of Rs. 15,69,923/- is not related to the expenses of the project under consideration and no nexus of interest expenses is proved by the assessee. 1. Income from House property income not offered On perusal of the balance sheet, it is seen that the assessee owns five house properties. Inspite of owning five house properties, the assessee has not shown any incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... &L account of Smt. Rajani D. Patil and Shri Rahul D. Patil does not show any such receipts from the assessee in the form of contract, as claimed by the assessee. 1. Office rent claimed in spite of having own premises As per Schedule Á of fixed assets, the assessee owns office valued at Rs. 17,42,000/-. In the P&L account the assessee has debited office rent at Rs. 6,24,100/-. In spite of owning an office, the assessee has debited office rent of Rs. 6,24,100/-, no explanation or proof in respect of the same is on record. 1. Undisclosed income on sale of flat It is observed that the assessee has sold 6 flats during the A.Y. 2013-14. On perusal of the record for A.Y. 2014-15, it is seen that the assessee has sold 5 flats and the closing stock stands at nil which shows that the assessee has sold all the 38 flats which is under his possession, as per the above stated agreement. On perusal of Returns of Income for the A.Y.2011-12 and 2012-13, it is seen that the assessee has shown total income of Rs. 14,17,740/- and Rs. 20,37,169/- respectively. From the above, it can be concluded that the assessee has not offered any income against the consideration from the balance 27 fl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act are reason to believe that income for the F.Y. 2012-13 relevant to A.Y. 2013-14 has escaped assessment because of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for A.Y. 2013-14. It is pertinent to mention here that reasons to believe that income of Rs. 3,39,61,096/- has escaped assessment for A.Y. 2013-14 have been recorded above (para 6 above). I have carefully considered the assessment records containing the submissions made by the assessee in response to various notices issued during assessment proceedings and have noted that the assessee has not fully and truly disclosed the material facts necessary for his assessment for A.Y. 2013-14. 13. At the outset, the reasons recorded seek to reopen the assessment which was made under Section 143 (3) of the Act on 31 December 2015. It is important to note at this stage that, this order of 31 December 2015 was set aside by the PCIT in revisional proceedings under Section 263 of the Act vide order dated 16 March 2018. The assessing officer passed a fresh assessment order pursuant to the direction issued under Section 263 of the Act on 14 December 2018. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent, it is the mistake of the predecessor Officer and, therefore, the issue of any failure to disclose fully and truly all necessary facts for the assessment by the petitioner would not arise. In any case, pursuant to the direction under Section 263 of the Act, the Assessing Officer examined all the issues which are also subject matter of the present proceedings and passed the assessment order on 14 December 2018. Therefore, any attempt now to re-agitate the issues which were already examined while passing the assessment order pursuant to directions in 263 proceedings would be based on change of opinion and review of the earlier order which is not permissible. 17. The learned counsel for the petitioner is justified on relying upon the decision in the case of Samet Estates (P.) Ltd. (Supra) where on very similar ground where 263 proceedings were initiated, reopening was quashed by Co-ordinate bench of this Court. The learned counsel for the petitioner is justified in stating that the decision in the case of Kalyanji Mavji & Co. (Supra) relied upon by the respondent is no more a good law post the decision of the Supreme Court in the case of Indian Express Newspaper (Supra). 18. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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