Wp-1072-2014.Odt v. Commissioner Of Income Tax-5& Anr

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1072 OF 2014 M/s Anjis Developers Pvt. Ltd.….Petitioner. Vs. Commissioner of Income Tax-5& Anr....Respondents. --------- Mr.S.C. Tiwari a/w Ms Rutuja Pawar for petitioner.Mr. Suresh Kumar a/w Ms Sumandevi Yadav for respondents. --------- CORAM : K.R. SHRIRAM & N.R.BORKAR, JJ. DATE : 29[th] APRIL, 2022. P.C.: 1.Petitioner is impugning notice dated 30.3.2013 issued under Section148 of the Income Tax, 1961 (hereinafter to be referred to as the ‘said Act’)on the ground that the petitioner’s income in respect of which it wasassessable to tax for the Assessment Year 2008-2009, has escapedassessment within the meaning of Section 147 of the said Act. Petitionerhas been provided reasons for re-opening with letter dated 26.4.2013. Wehave perused the reasons recorded and we are satisfied that it is a clearcase of change of opinion. It is settled law that reopening can not be basedon change of opinion. Change of opinion does not constitute justificationand/or reasons to believe that income chargeable to tax has escaped Chitra Sonawane assessment. Assessing Officer admits that petitioner’s return of incomehas been processed under Section 143(3) of the said Act. According to theAssessing Officer by an Agreement dated 5.3.1994 petitioner agreed withthe promoters of the Company to finance and to manage development/ re-development project by financing a sum of Rs.159,306,256/-. Thepromoters of petitioner also took deposit of Rs.183,155,710/- from 7parties and agreed to allot premises in proposed building. However, videagreement dated 19.12.2002 alongwith supplemental agreement dated2.1.2003, the promoters transferred development rights to petitioner forconsideration of Rs.34,24,61,966/- and during assessment year underconsideration, petitioner cancelled the respective allotment with 7 partieson condition of refunding the deposit paid by them. Entire amountpayable of Rs.18,31,55,710/- is debited to project account as compensationpayable. According to Respondent No.2, assessee has refunded the deposit/advance to those 7 persons and showed the amount of Rs.18,31,55,710/-as expenditure whereas, it should have been shown as capital payment.Hence, there is escapement of income in the sum of Rs.18,31,55,710/-which is assessable to tax. 2.Admittedly, in this case, there was even survey operation underSection 133-A on 31.1.2008 and in the survey report it was specificallycommented to examine in detail genuineness of claim of assessee company Chitra Sonawane about compensation payable amounting to Rs. 18,31,55,710/-. It is alsoadmitted that the Assessing Officer in his order dated 31.12.2010 hasaccepted submissions of petitioner and allowed expenditure ofRs.183155710/-. According to Respondent No.2, the Assessing Officerwho passed the original assessment order should not have accepted thepayment as expenditure but should have treated it as ‘capital payment’. In the reasons the Assessing Officer writes as under: “While passing the order u/s 143(3) of the Act,the assessing officer accepted the abovesubmission and allowed the expenditure. In thisconnection it is pointed out that the assesseecompany has refunded the deposit/advancereceived from the prospective buyers andrepayment thereof constitute the capitalpayment as such allowance of expenditure ofRs.18,31,55,710/- is not in order. As the sameis capex in nature. 3.In the circumstances, it is clear case of change of opinion. Therefore, petition is allowed in terms of prayer clause (a) which reads as under : “(a) That the Hon’ble Court may be pleased toissue a writ of certiorari or a writ in the nature ofcertiorari or any appropriate writ, order ordirection after calling for the records andproceedings of the respondents and quash andset aside notice u/s 148 dated 30[th] March, 2013 i.e. Exhibit-H to the petition.” 4.Petition disposed with no order as to costs. (N.R. BORKAR, J.) 3.In the circumstances, it is clear case of change of opinion. Therefore, petition is allowed in terms of prayer clause (a) which reads as under : “(a) That the Hon’ble Court may be pleased toissue a writ of certiorari or a writ in the nature ofcertiorari or any appropriate writ, order ordirection after calling for the records andproceedings of the respondents and quash andset aside notice u/s 148 dated 30[th] March, 2013 i.e. Exhibit-H to the petition.” 4.Petition disposed with no order as to costs. (N.R. BORKAR, J.) (K.R.SHRIRAM, J.) Chitra Sonawane Chitra Sonawane