Re-Assessment cannot be made without fresh information regarding Escapement of Income so was held by Income Tax Appellate Tribunal (ITAT), Mumbai.
The assessee, Bombay Real Estate Development Co. P. Ltd. is engaged in the business of real estate. For the year under consideration, assessee filed its return of income declaring total loss of Rs. 33,85,526. The assessee is engaged in the activity of development of one ongoing project at Kandivali i.e., Evershine Millennium Paradise and has unsold flats in two projects known as Hillview Park and Viceroy Court, wherein no flat was sold during the year. Further, no construction activity during the year was undertaken as the entire area of Kandivali has been notified as private forest by the Government of Maharashtra, who have issued stop work notices and the matter is sub-judice before the Supreme Court.
The return filed by the assessee was selected for scrutiny and notice under section 143 (2) of the Act was served on the assessee, which was replied and information as sought by the Assessing Officer (AO) was furnished by the assessee on various occasions. The Assessing Officer, passed order under section 143(3) of the Act, assessed the income of the assessee under section 115JB of the Act at Rs. 7,08,40,966, after making addition under section 14A read with Rule 8D, and disallowance of expenditure under section 40(a)(ia) of the Act.
The Assessing Officer initiated the reassessment proceedings in the case of assessee and in response assessee submitted that the return of income filed earlier be treated as return filed in response to notice issued under section 148 of the Act and also requested for copy of reasons recorded for reopening the assessment. The Assessing Officer provided copy of reasons recorded while reopening the assessment in the case of assessee. The Assessing Officer also issued notices under section 142(1) of the Act and directed the assessee to produce the documents in support of its claim. The said notices were responded by the assessee. The Assessing Officer passed oreder under section 143(3) and 147 of the Act computed the total income of the assessee under section 115 JB of the Act. In further appeal, Commissioner of Income Tax (CIT) partly allowed the appeal filed by the assessee on merits. Being aggrieved, assessee is in appeal before the Tribunal.
Pramod Kumar, Vice President and Sandeep Singh Karhail, Judicial Member observed “As is evident from the facts available on record, no new information was received by the Assessing Officer at the time of initiation of reassessment proceedings, and it was merely a fresh application of mind to the same set of facts as were available at the time of original scrutiny assessment proceedings. Thus, in view of the above, we are of the considered opinion that the reopening of assessment under section 147 of the Act, in the present case, is bad in law and therefore is set aside.”
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