THE INCOME TAX OFFICER, WARD-3, PANVEL vs. SHRI ARUN TULSIDAS SHETH, RAIGAD

This appeal by the Revenue is directed against the order dated 27-01-2023 passed by the CIT(A) in National Faceless Appeal Centre (NFAC) u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2008-09.

Succinctly, the facts of the case are that the assessee is engaged in the business as an estate agent. Without entering into any formal agreement, the assessee started procuring lands from farmers on commission basis for Reliance Industries Ltd, which started acquiring lands for its SEZ project from Pen Taluka. Survey took place at the premises of the assessee on 10-03-2010. The survey team enquired about expenditure under the head “Land, Development and Commission” amounting to Rs.3,48,89,228/-. The assessee explained that a sum of Rs.1.00 crore was given as commission; and the balance amount was incurred towards owners of land as incentive. Since tax was not deducted at source from commission of Rs.1.00 crore, the assessee surrendered additional income to that extent. Out of the remaining expenses, a further amount of Rs.20.00 lakh was surrendered towards unverifiable expenses. Thus, out of total Rs.3.48 crore, a sum of Rs.2.28 crore was allowed as deduction in the assessment u/s.143(3) of the Act. Thereafter, proceedings u/s.147 were taken by means of notice u/s.148 towards the balance amount of Rs.2.28 crore. In the order passed u/s.143(3) r.w.s.147, the AO made further disallowance of Rs.2.28 crore.

We have heard the ld. DR and perused the relevant material on record. There is no appearance from the side of the assessee despite notice. Original assessment in this case was completed u/s.143(3) on 03-12-2010. Notice u/s.148 was issued on 24-03-2015, i.e., after a period of four years from the end of the relevant assessment year. First proviso to section 147 provides that where an assessment has been completed u/s.143(3), no action can be taken u/s.147 after expiry of four years from the end of the relevant assessment year unless an income chargeable to tax escaped the assessment by reason of failure on the part of the assessee, inter alia, to make full and true disclosure of all material facts. The case under consideration involves assessment year 2008-09. Original assessment in this was completed u/s.143(3). Notice u/s.148 was issued on 24-03-2015, which is after a period of four years from the end of the relevant assessment year. It is apparent from the reasons for re-assessment and the resultant addition that the AO wanted to re-verify the expenses of Rs.2.28 crore, which were duly examined in the course of original assessment u/s.143(3) of the Act. In view of the foregoing legal position, tested on the touchstone of the factual matrix of the case, we are satisfied that the decision taken by the ld. CIT(A) does not require any interference. The same is, therefore, upheld.

In the result, the appeal is dismissed. Order pronounced in the Open Court on 01st June, 2023.