January 2019

Section 147 : Reassessment – Beyond period of 4 years –Findings in case of another assessee - No failure to disclose material facts - Reassessment was held to be not valid. [Sections 80IB(10) ,148]

Ajay R. Singh
Advocate

12.  Pr.CIT vs. Vaman Estate [ Income tax Appeal no 678 of 2016, Dated: 27th November, 2018 (Bombay High Court)]. 

 

[ACIT-21(2) vs. Vaman Estate; dated 15/07/2015 ; ITA. No 5584/Mum/2012, AY: 2004-05 , Bench: F, Mum.  ITAT ]

 

Section 147 : Reassessment – Beyond period of 4 years –Findings in case of another assessee - No failure to disclose material facts - Reassessment was held to be not valid. [Sections 80IB(10) ,148]

 

The assessee filed on 31.10.2004 declaring total income at Rs. Nil. In the return of income filed by the assessee for the said assessment year, the principal claim was of deduction u/s. 80IB(10) of the Act arising out of income from development of a housing project. In the assessment carried out by the A.O, he disallowed a part of the claim after detailed scrutiny. Such assessment was reopened by the A.O by issuance of notice, which was done beyond the period of four years from the end of relevant assessment year. In order to issue such notice, the A.O had recorded the detailed reasons. The gist of his reason was that a similar claim was lodged by one  Abode Builders for the same housing project. In the course of examination of such claim of the said assessee, the A.O had detected certain defects. The A.O had rejected the claim inter alia on the ground that the development and construction of housing project had commenced prior to 01.10.1998 (which was the crucial date for claiming the benefits u/s. 80IB(10) of the Act). The A.O of the present assessee, therefore, found that the assessee was not entitled to the deduction since one of the essential requirements of the provision was breached. He noted that these facts were not disclosed by the assessee and not brought to the notice of the A.O during the assessment. Therefore, there was failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment.


The CIT(A) observed that during the scrutiny assessment, there was no failure on the part of the assessee to disclose

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