ACIT-24(1), MUMBAI, PIRAMAL CHAMBERS vs. AJMERA HOUSING CORPORATION BANGALORE, MUMBAI

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: A BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA 794/MUM/2026 िनधा�रणवष�/AssessmentYear:2014-15) ACIT-24(1), MUMBAI AJMERA HOUSING CORPORATION BANGALORE Room No.601, 6th Floor, Piramal Chambers, Lalbaug, Parel, 2nd Floor Citimall, Link Road Mumbai - 400012, Mumbai- Vs. Andheri West Mumbai, 400012, Maharashtra 400053 Mumbai-400053, Maharashtra अपीलाथ� Appellant ��थ� Respondent CO 146/MUM/2026 िनधा�रणवष�/Assessment Year: 2014-15) AJMERA HOUSING ACIT-24(1), MUMBAI CORPORATION BANGALORE Room No.601, 6th Floor, Vs. 2nd Floor Citimall, Link Road Piramal Chambers, Lalbaug, Andheri West Mumbai, 400053 Parel, Mumbai - 400012, Mumbai-400053, Maharashtra Mumbai-400012, Maharashtra अपीलाथ� Appellant ��थ� Respondent Permanent Account Number of AAKFA5386R Assessee:

अपीलाथ��ारा/Appellant represented by: Shri Prakash Jotwani, Adv. ��थ��ारा/Revenue represented by: Shri Surendra Mohan (Sr. DR) सुनवाईकीतारीख/Date of conclusion of hearing: 07-Jul-2026 घोषणाकीतारीख/Date of pronouncement: 09-Jul-2026

ITA 794/MUM/2026 AJMERA HOUSING CORPORATION BANGALORE आदेश / ORDER

PER: ANIKESH BANERJEE, (JM): The instant appeal of the revenue and cross- objection of the assessee filed against the order of the National Faceless Assessment Centre, Delhi [for brevity “Ld. CIT(A)”], order passed under Section 250 of the Income Tax Act, 1961 (for brevity ‘the Act’), for Assessment Year 2014-15., date of order 17.11.2025. The impugned order emanated from the order of the National Faceless Assessment Centre, Delhi (for brevity ‘Ld. AO’), order passed under Section 147 r.w.s. 144B of the Act date of order 23.03.2022. 2. The Registry informed that the cross-objection had been filed with a delay of 20 days. The assessee filed a notarized affidavit, duly sworn on 15.04.2026, explaining the reasons for the delay. The Ld. DR did not raise any serious objection to the assessee's submissions. Upon consideration of the material on record, we are satisfied that the assessee has demonstrated sufficient cause for the minor delay of 20 days. Accordingly, the delay in filing the cross-objection is condoned, and the cross-objection is admitted for adjudication on merits. 3. The brief facts of the case are that the assessee filed its return of income on 30.09.2014, declaring a total income of Rs.17,04,57,010/-. Subsequently, the case was selected for scrutiny. During the course of the assessment proceedings, the assessee furnished all the requisite details before the Ld.AO. The assessment was completed under Section 143(3) of the Act vide order dated 19.12.2016, accepting the returned income of Rs.17,04,57,010/-. A copy of the assessment order is placed at pages 20 to 23 of the Assessee's Paper Book (APB). Thereafter, the assessment was reopened by issuance of a notice

ITA 794/MUM/2026 AJMERA HOUSING CORPORATION BANGALORE under Section 148 of the Act dated 31.03.2021. In response to the said notice, the assessee filed its return of income on 22.04.2021, again declaring the total income at Rs.17,04,57,010/-. During the reassessment proceedings, the assessee furnished various documents, which had already been submitted during the original assessment proceedings under Section 143(3) of the Act. The Ld. AR contended that all relevant details had been furnished during the original assessment proceedings through a letter dated 14.12.2016, copies of which are placed at pages 8 to 19 of the APB. The Ld. AR further submitted that the reasons recorded for reopening the assessment under Section 147 of the Act were not based on any fresh tangible material and merely sought to re- examine issues that had already been scrutinized during the original assessment proceedings. Ultimately, the reassessment was completed by making an addition of Rs.86,22,862/- towards deemed rental income under Section 23(1)(a) of the Act and by disallowing labour charges amounting to Rs.7,29,02,140/- debited to the Profit & Loss Account. Aggrieved by the reassessment order, the assessee preferred an appeal before the Ld. CIT(A), challenging the additions both on merits and on legal grounds. The Ld. CIT(A) deleted the additions on merits; however, the legal grounds raised by the assessee were not adjudicated in the impugned appellate order. Aggrieved by the relief granted on merits, the revenue has preferred the present appeal, whereas the assessee has filed a cross-objection before the Tribunal challenging the non-adjudication of the legal grounds by the Ld. CIT(A). CO 146/Mum/2026 4. The Ld. AR argued filed a paper book comprising pages 1 to 315 which has been placed on record. The Ld. AR contended that the reassessment was

ITA 794/MUM/2026 AJMERA HOUSING CORPORATION BANGALORE initiated by the Ld. AO by recording reason dated 09.11.2021 u/sec. 147 of the Act. The said recorded reason is annexed in APB page 29 to 33 which is reproduced as below:

“Subject: Reasons for re-opening is 147 One of the reason for selecting the case for scrutiny to examine "Real Estate business with high closing stock. On perusal of the Schedule D pertaining to Closing Stock It is seen that the assessee has under the head Finished Goods declared inventories worth Ra 24,63,67,474/-. It is perused from the return of income that the assessee has not offered any deemed rent with respect to the properties under Section 23(1)(a) of the IT Act, 1961, following the ratio laid down by the decision of the Hon'ble Delhi High Court in the case of Ansul Housing Finance & Leading Co Ltd VS CHC 354 TTR OLBI The Hon'ble Delhi High Court in the case of Ansul Housing Finance & Leasing Co. Led. Vs CAT 354 ITR 0160) held hot ALV of flats, built by assessee engaged in construction business, lying unsold, Is assessable as income from house property. The same ratio was followed by the Hon'ble Delhi High Court in the case of New Delhi Hotels Ltd, Vs ACIT (2014) 360 ETR 187 (Del). The ALV of the said flats/shops will have to be taxed as income from House property. For the purpose of Section 22, the annual value of any property shall be deemed to be the sum for which the property might reasonably be expected to let from year to year, In the case of Radha Devi Daimiya vs CIT 1980) 125 ITA 134 and the decision of the Gujarat High Court, in the case of Bipin Vocal Family Trust Vs. CIT (1994) 208 ITR 1005, 5% of the cost of the house property is treated as the value at win the property might reasonably be expected to be let out during the year as per Sec 23(1)(a) of the I.T. Act The words the sum for which the property reasonably be expected to let out from your to year clearly indicated that the annual value of any property has to be computed according to annual rent which could be received in respect of the property, Thus the annual value of the House property in the instant case is calculated as under- Cost of the property 24,63,67.474/ (unsold units as per record) 1,23,18,374/- Net ALV. (5% of 24,63,67,474) Less Deduction as 24(a) 30% 36,95,512/- Deemed came from House Property Rs. 85,22,852

ITA 794/MUM/2026 AJMERA HOUSING CORPORATION BANGALORE Thus non-taxation of Rs. 86,22,81- under the head House Property has caused under Assessment to that extent Thus in aggregate there is shot Navy of tax to the tune of Rs.26,64,465. (IT R. 25,86,899-EC Rs 51,737 Secondary and Higher Education R 25,869) Further, On perusal of the sales details it is seen that uses assessee has sold 91 units during the year of project Ajmera willows project Ajmera Avenue and project Ajmera Infinity. On perusal of the details on record it is seen that the answer has stated that the turnover we the declined during the year 2013-14 pertains to Ajmera Avenue and Ajmera Willos and untold stock of Ajmerainfinity. Since the assessee had shown closing WIP of Rs. 34,71,22,937/-) hence to verify the details of the thing we and the cared forward balances of the unsecured loans the case records for AY 2013-14 and AY 2012 13 were called for. However, only case record for A 2013 14 wore forwarded till date, On going through the case records of AY 2013- 14 was e that the assessee had claimed deduction u/s. 80IB on its project Ajmera Infinity which was sanctioned by the Bangalore Development Authority Part OF for the first phase consisting of Wings G to N was given to the assessee, and Occupancy Certificate Phase 2 consting of wings A,B,C,D,E,F, P,Q,R was given on 20.03.2012. The assessee has accordingly sold the fiats in wings A,B,C,D,E,F.P,Q,R during AY 2012-13 onwards and has claimed deduction u/s. 80IB from AY 2012-13 for these wings. For Phase-l consisting of Wings G to N the assessee has claimed deduction u/s. 801B in the years prior to AY 2012-13. Perusal of records for AY 2013-14 shows that the assessee had 7 unsold lats of project Avenue Infinity which were carried forward to AY 2014-15 and these flats have been sold during AY 2014-15. On going through the details of sales of AY 2014-15 it is seen that the assessee has made the following sales which pertained to project Infinity, Avenue giving the name of the purchase the areaand the amount, which is reflected as under- PROJECT AVENUE INFINITY PHASE 1 BUILDING L-wing Area N-wing Area L-1802 1767 No-1301 1512 L-1902 1088 No-1401 1095 No-1501 1512 No-1601 1095

ITA 794/MUM/2026 AJMERA HOUSING CORPORATION BANGALORE

PROJECT AVENUE INFINITY PHASE 2 A-Wing Area C Wing Area D Wing Area P Wing Area Q wing Area Sq. Ft. Sq. Ft. Sq. Ft. Sq. Ft. Sq. Ft. A-1001 1726 C-1702 1707 D-1702 1769 P-1802 1767 Q-1402 1697 A-1101 1095 C-1802 1087 D-1801 1088 P-1803 1707 1726 D-1802 1242 P-1902 1088 D-1804 1166 P-1903 1087

From the above chart it is evident that some of the flats of project Avenue Infinityare above the built-up area O 1500 sq. feet which is above the prescribed limits for availing deduction u/s 80IB. Hence, as the assessee has exceeded the limits prescribed under the Act for availing deduction u/s 80I8, the assessee is not eligible for availing deduction u/s. 8OIB of the Act for the project Infinity Avenue Phase 1 and Phase 2, as these phases are part of the same project. In the light of the above facts, the above issue should be examined as it is seen that the assessee has claimed deduction u/s 80IB as under:- 1. AY 2011-12 Rs. 14.45.61.256/ 2. AY 2012-13 Rs, 28,72,94,000/- 3. AY 2013-14 Rs 9,36,25,662/- 2. Perusal of details on record for AY 2013-14 it is seen that the assessee has been receiving rent and interest income, which have been included for computing profits eligible for deduction u/s. 8OID. As the incomes are not derived from the housing project, hence are not eligible for being included for claiming deduction u/s. 80IB. 3. One of the reason for selecting the case in scrutiny for AY 2014-15 "Unsecured can loan from persons who are not filed the return of income It is perused from the details pertaining to unsecured loans, Part B column in 3CD Report shows a Negative figure of (-) Rs. 21,90,82,226/-), whereas ROI (Part B column 2(b)(ii)(B) shows loan from others at 08 the

ITA 794/MUM/2026 AJMERA HOUSING CORPORATION BANGALORE submission dated 09/09/2016 shows a credit balance of Rs. 75,16,02,968/-. From the records forwarded to this office it is seen that this discrepancy has not been examined and reconciled. 4. As per Part B of 3CD Report for AY 2014-15 it is seen that assessee has received Interest of Rs. 6,43,514/, however on perusing P/L Account as well as Computation of Income no such amount is reflected. That is no interest income has been offered for taxation. Also TRACES details reveals that under section 194A, the interest credited amounts to Rs. 23,82,776/- Whether this interest income not been offered for taxation has not been examined. 5. Labour charges incurred during AY 2014-15 for the project are of Rs.28,24,81,108/-out of which Rs 26,94,16,351/- have been debited to PAL A/C and Rs. 1,30,64,747- has been taken to the closing WIP. 6. Perusal of the details of labour charges shows an amount of Rs.7,29,02,146/ as "Contractors Control A/c. No details regarding the above sum are on record nor any explanation regarding the same is on record nor any details whether TDS was deducted on this amount of Rs.7,29,02,146/ is on record The Case was selected for complete scrutiny with one of the reasons being large other expenses claimed in the P&L A/c. Thus the above expenses have remained to be examined. Similarly, for AY 2014-15 amount Rs.3,20,09,220/- has been claimed as work contract tax (composition) paid under the head Administrative Expenses. However, no supporting evidences regarding the same are on record. The case was selected for complete scrutiny with one of the reasons being large other expenses claimed in the P & L Alc. Thus the above expenses have remained to be examined. 7. On perusal of the details for AY 2014-15 with spect to purchases it is soon that the assessee has shown Apartment Purchase Rs. 10,77,42,026/ and has charged the same to the profit and loss account. No details regarding this purchase are on record nor is this apartment shown as sale nor is there any unit wise breakup of the closing stock from which can be verified whether the same is part of the closing stock or whether this apartment is part of the fixed assets.” 5. The Ld. AR submitted that, through the cross-objection, the assessee has challenged the jurisdiction assumed by the Ld. Assessing Officer for reopening the assessment, contending that the reasons recorded under Section 147 of the Act were not based on any fresh tangible material. According to the Ld. AR, the reopening was founded merely on a change of opinion, which is impermissible in law. The Ld. AR further submitted that the original assessment had been

ITA 794/MUM/2026 AJMERA HOUSING CORPORATION BANGALORE completed under Section 143(3) of the Act after a detailed scrutiny, during which the assessee had furnished all the relevant documents and the Ld. AO had examined and test-checked the books of account before accepting the returned income. However, while exercising jurisdiction to reopen the assessment, the Ld. AO failed to refer to or rely upon any fresh tangible material in the reasons recorded, and merely sought to review the issues that had already been examined in the original assessment proceedings. The Ld. AR contended that the issue is squarely covered by the decision of the Coordinate Bench of the ITAT, Mumbai, in K.A. Investments Consultancy LLP v. ITO, ITA No. 6592/Mum/2025, order dated 25.03.2026. The relevant observations of the Coordinate Bench contained in paragraphs 19 to 21 are reproduced below:

“19. The legal position in this regard is no longer res integra The Hon'ble Supreme Court in the case of CIT v. Kelvinator India Ltd. (2010)312/320 ITR 561 (SC) has held that though the Assessing Officer has the power to reassess, he has no power to review, and the concept of change of opinion must be treated as an in-built test to check abuse of power. The Hon'ble Jurisdictional High Court in Bajaj Energy Ltd. v. ACIT (2024) 464 ITR 569 (Bom)(HC) has held that where information regarding investments and common expenditure was already provided during original assessment proceedings and the Assessing Officer had applied his mind thereto, reopening on the same issue is unjustified. Similarly, in D.K. Realty India (P.) Ltd. v. ACIT (2023)148 taxmann.com 468 (Bom)(HC), it was held that where the issue had been specifically gone into in the scrutiny assessment and queries were raised and replied, reopening on the same subject matter would be a change of opinion and would not satisfy the jurisdictional condition for reopening under section 147. Even more tellingly, on similar facts involving the same scrip, namely Shreenath, the Hon'ble Bombay High Court in Jainam Investments v. ACIT (2021) 131 taxmann.com 327 (Bom)(HC) held that where reopening was based on a general and bald statement of the Investigation Wing without disclosing any tangible material, the reopening was unjustified. These authorities apply with full vigour to the facts before us.

ITA 794/MUM/2026 AJMERA HOUSING CORPORATION BANGALORE 20. On an overall conspectus of the entire record, therefore, we are left with no manner of doubt that the reopening in the present case is bad in law. It is not merely a case where the material is insufficient; it is a case where the very material relied upon for reopening had already been specifically examined in the original assessment proceedings. The survey conducted on 09.06.2015, the statement of Shri Amit Kesari recorded on 09.06.2015 and 10.06.2015, the Kolkata Investigation Wing report dated 27.04.2015, the details of purchase and sale of Shree Nath Commercial and Financial Ltd., the brokers' ledgers, contract notes, demat statements bank statements, explanations regarding low profits and losses, and the CBDT penny stock information were all part of the original assessment record. The original assessment was completed only thereafter and after detailed enquiry. Consequently, the subsequent issuance of notice under section 148 on the basis of the very same material is clearly case of change of opinion and, therefore, the assumption of jurisdiction under section 147 is vitiated. 21. Once we hold that the reopening is invalid and the notice under section 148 is bad in law, the entire reassessment order collapses. The additions made therein on account of disallowance of business loss, disallowance under section 14A, and alleged bogus commission do not survive for adjudication. They are rendered academic and need not be gone into on merits.” 6. The Ld. AR further respectfully relied that the identical issue was duly considered by the Coordinate Bench of ITAT Mumbai ‘A’ Bench in the case of Mohammed Iqbal Khan vs ACIT ITA No.5384/Mum/2025, date of pronouncement 09.04.2026. The relevant observations of the Bench in para no.9 is reproduced as below:

“9. We have heard the rival submissions and perused the material available on record. The core issue raised by the assessee pertains to the validity of reopening under section 148 of the Act. From the facts on record, it is evident that during the original assessment proceedings conducted under section 143(3), the Ld. AO had specifically called for details of the assessee's bank accounts vide notice issued under section 142(1) dated 01.09.2014. In response, the assessee had duly furnished complete details of the bank account in question, including the transactions therein, which were examined by the Ld. AO before passing the assessment order dated 20.03.2015. Thus, the primary facts relating to the impugned bank account were already on record and had been subject to scrutiny. Subsequently, the reopening has been initiated on the basis of information received from the Investigation Wing, which essentially pertains to the very same bank account and transactions that were already disclosed and examined during the original assessment proceedings. On a careful perusal of the reasons recorded, we find that no new tangible material has been brought on

ITA 794/MUM/2026 AJMERA HOUSING CORPORATION BANGALORE record by the Ld. AO to justify the reopening of assessment. The reasons recorded merely seek to re-examine / verify the same set of facts, which, in our considered view, amounts to a mere change of opinion. It is a settled position of law, as laid down by the Hon'ble Supreme Court in CIT vs. Kelvinator of India Ltd. (SC) reported in (2010) 320 ITR 561 and consistently followed by the Hon'ble jurisdictional High Courts, including in Kalpataru Land Pvt. Ltd. (supra), that reopening of assessment on the basis of change of opinion is impermissible. The Assessing Officer must possess fresh tangible material to form a belief that income has escaped assessment, which is absent in the present Case. Further, we note that the Ld. CIT(A) has failed to adjudicate the jurisdictional ground raised by the assessee and proceeded to decide the appeal only on merits, which is not in accordance with settled legal principles. In view of the above factual matrix and respectfully following the judicial precedents cited, we hold that the reopening of assessment under section 147/148 of the Act is invalid in law and liable to be quashed. Accordingly, the reassessment order passed by the Ld. AO is set aside and the addition was deleted. Since we have quashed the reassessment on the legal ground, the adjudication on merits becomes purely academic in nature and is, therefore, not being adjudicated.” 7. The Ld. DR strongly supported the orders of the revenue authorities. The Ld. DR submitted that during the original assessment proceedings, the Ld. AO was unable to fully verify the entire issue; however, in the course of reassessment proceedings, the Ld. AO thoroughly examined the assessee's bank statements and other related details. However, the Ld. DR was unable to place on record any judicial precedent contrary to the submissions advanced by the Ld. AR.

ITA 794/MUM/2026 AJMERA HOUSING CORPORATION BANGALORE AO has not referred to any fresh tangible material which came into his possession subsequent to the completion of the original assessment. The reasons recorded merely seek to re-examine the very same issues that had already been scrutinized during the assessment under Section 143(3) of the Act. Such an exercise amounts to a mere change of opinion, which is impermissible in law. We find that the facts of the present case are squarely covered by the decisions of the Coordinate Benches in K.A. Investments Consultancy LLP (supra) and Mohammed Iqbal Khan (supra), wherein it has been held that, in the absence of any fresh tangible material, the assumption of jurisdiction under Sections 147/148 of the Act is invalid. The Ld. DR, despite strongly supporting the orders of the revenue authorities, was unable to distinguish the aforesaid judicial precedents or place on record any contrary binding decision. Respectfully following the aforesaid judicial precedents and applying the settled principle laid down by the Hon'ble Supreme Court in Kelvinator of India Ltd.(supra), we hold that the reopening of the assessment is based merely on a change of opinion and is therefore without jurisdiction. Consequently, the notice issued under Section 148 and the reassessment order passed pursuant thereto are liable to be quashed and are accordingly set aside. 9. Since the reassessment order itself has been quashed on the legal issue, the additions made therein do not survive for consideration. Accordingly, the appeal filed by the revenue challenging the relief granted on merits is dismissed, and the cross-objection filed by the assessee is allowed. In view of our decision on the jurisdictional issue, the grounds raised on the merits of the additions have become purely academic and, therefore, require no adjudication.

ITA 794/MUM/2026 AJMERA HOUSING CORPORATION BANGALORE 10. In the result, the Cross Objection of the assessee CO No.146/Mum/2026 is allowed and appeal of the revenue bearing ITA No.794/Mum/2026 is dismissed. Order pronounced in the open court on 09th day July 2026.

Sd/- Sd/- (BIJAYANANDA PRUSETH) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 09/07/2026 SAUMYA Sr.PS Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 5. गाड�फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI