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TMI Blog2025 (2) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... authority should not have given his approval after he himself having passed the order under Section 263. Therefore, even on this ground since the issues were subject matter of 263 proceedings, the impugned proceedings are barred by 3rd proviso of Section 147 of the Act. The reasons recorded initially states that there has been no disclosure of material facts necessary in the assessment but, what were the material facts which were not disclosed has not been stated. On perusal of the reasons recorded it is observed that the officer himself has recorded that it is based on the perusal of records and verification of records that reopening proceedings are initiated. In our view, on this ground also the pre-condition required of failure to disclose truly and material facts necessary for the assessment is not satisfied and therefore, the proceedings are bad in law as per the proviso of Section 147 of the Act. In the order rejecting the objections, the officer states that the reopening is permissible if in the original assessment the Assessing Officer has through inadvertence oversight given relief. If that be the case, then, certainly no proceedings could have been initiated by the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Section 143 (3) read with Section 263 assessing income of the petitioner at Rs. 57,06,250/- by making additions on account of notional rent under the head 'income from house property.' Proceedings u/s 148 : 5. On 25 March 2021, a notice under Section 148 of the Act was issued to the petitioner calling upon the petitioner to file his return of income for assessment year 2013-14 since the respondents proposed to reassess the income under Section 147 of the Act. The petitioner on 4 January 2022 filed his return of income in compliance with the said impugned notice. On a request being made by the petitioner, the reasons recorded for reopening the case were furnished on 22 March 2021. The petitioner vide letter dated 2 March 2022 objected to the reasons for reopening on the ground that the issue for which the reopening is sought was subject matter of 263 proceedings and, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 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 Taxman 479 (Bombay) vii. Chandra Global Finance Ltd. Vs ITO (2024) 168 taxmann.com 182 (Delhi) viii. Saravana Stocks Investments (P.) Ltd Vs DCIT (2021) 133 taxmann.com 315 (Madras). ix. Samet Estates (P.) Ltd. Vs CIT (2022) 140 taxmann.com 342 (Bombay). x. Tumkur Minerals (P.) Ltd. Vs JCIT (2022) 145 taxmann.com 397 (Bombay). xi. HDFC Bank Ltd. Vs ACIT (2022) 136 taxmann.com 69 (Bombay). 10. Mr. Sharma, learned counsel for the respondent defended the impugned proceedings by relying upon the reasons recorded and the order rejecting the objections. He submitted and prayed that the petition be dismissed. 11. We have heard learned counsel for the petitioner and respondent and with their assistance have perused the documents on record. 12. Admittedly, the reopening is sought to be done beyond the period of 4 years from the end of the relevant assessment year. The re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 copy of unregistered Development Agreement cum sale dtd.27.02.2008 with Shivshankar CHS Ltd. for development of the said plot, the number of members in the society is mentioned as 31 instead of 30 as per original allotment by CIDCO to 30 PAPS. As per the said agreement the assessee agreed to pay Rs. 2,45,30,000/- to the members for the development rights but has paid only Rs. 1,22,00,000/-. No proof for the said payments is placed on record. Shivshankar CHS Ltd. vide letter dtd. 30.10.2009 sought permission of Jt. Registrar of Co-op. Society for holding Special General Body Meeting for calling tender for sale/transfer of the Plot No. 63, Sector-14, Koparkhairne. Finally, the tender was given to M/s. Orchid Builders & Developers being the highest bidder for a consideration of Rs. 2,50,00,000/-. Vide final transfer order dtd.23.02.2010, CIDCO transferred the plot in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 income from house property during the year. From the Returns of Income for A.Y. 2011-12 and A.Y. 2012-13, it is noticed that assessee has offered income from house property at Rs. 1,15,235/- and Rs. 1,15,290/-. The details of properties (as per Schedule of fixed assets) owned by the assessee are as under - 1. Flat at Vashi Gaon Rs. 11,50,000 2. Flat at Vashi Rs. 31,50,000 3. Flat at Koparkhairane Rs. 7,75,000 4. Flat in Aniket Apartment Rs. 21,71,545 5. Flat in Shraddha Apartment Rs. 8,80,000 In view of the above, the ALV of the property held by the assessee has to be worked out for computing income from house property. The flat at Vashi appearing at Sr. No. 2 of the table, is considered as SOP, as the same is higher in value. The other four properties, therefore, have to be considered as deemed to be let out properties. Since the fair market rent of the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 flats. The date of commencement of the project is shown as 09.05.2010 and the date of receipt of occupation certificate is 19.07.2013. 1. Proportionate disallowance on account of personal use of vehicle The assessee is a proprietor having three cars costing Rs. 1,12,94,027/- against which depreciation is claimed at Rs. 9,12,305/-. The assessee has claimed vehicle expenses at Rs. 13,41,560/- and insurance at Rs. 2,43,870/- in the P&L account. In the assessment order, no proportionate disallowance on account of personal use of vehicles has been made. During the assessment proceedings an amount of Rs. 3,39,61,096/- has escaped assessment for A.Y. 2013-14, due to failure on the part of the assessee to disclose true and correct income. 1. Enquires made by the AO as sequel to information collected/ received :-- On verification of the records, it is verified that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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. Therefore, the original assessment dated 31 December 2015 which is sought to be reopened did not exist on the date of recording the reasons and, therefore, on this ground itself the proceedings are bad in law. The assessing officer glossed over the assessment order passed under Section 143 (3) read with Section 263 of the Act on 14 December 2018 which was the order in existence on the date of recording reasons and sought to reopen the assessment order which was not in existence. 14. In any event, the issues raised in the reasons recorded for reopening are identical to the reasons for which revisional proceedings under Section 263 of the Act were initiated by the PCIT on 29 November 2017. The said revisional order under Section 263 of the Act was passed on 16 March 2018 directing the assessing officer to examine the issues raised in the revisional proceedings and pass a fresh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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