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Judgment
Per Satbeer Singh Godara, Judicial Member:
This assessee’s appeal for Assessment Year 2005-06 arises against the CIT(A)-XXVII, New Delhi’s dated 27.11.2014, in case No. 407/13-14/CIT(A)-XXVII/2014-15, in proceedings u/s 143(3)/147 of the Inco me Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
The asse ssee’s main as we ll as additional/revised grounds raised in the instant appeal seeks to reverse both the lower authorities’ respective findings in assessment order dated 30.03.2013 as well as in the lower appellate discussion inter alia initiating section 148 proceedings culminating in the addition of undisclosed income of Rs.3,84,86,000/- in question.
Learned CIT(A)’s lower appellate discussion appears to have upheld the assessment findings to this effect as under:
“2.The brie f facts of the case are that the appellant company during the year under conside ration was engaged in the construction o f project namely AEZ Project Vaishali. T he appellant filed its re tur n o f inco me originally with the ACIT, Central Circle-08 on 29.10.2005 vide ackno wledgm ent no .96 declar ing a total income of Rs.62,910/-. Later on, the case o f the appe llant was decentralized to ITO Ward-5(2) , New Delhi. A search and seizure o peration u/s 132 was conducte d by the department in the Aerens group of cases on 17.08.2011. Subsequently, search action was also carrie d out on 10.02.2012 o n certain investors who had inve sted substantial unaccounte d money in the projects of AEZ group, an associate of the Aerens group. From the details contained in the seized mate rial, it was found that the AEZ group had received substantial unaccounte d money against the sale of its projects. I t was also found that the project AEZ V aishali of AEZ gro up was co nstructed by the appellant. The seized material also co ntaine d hard disks which were seized from the registe red offi ce of the company situated at Nehru Place, New Delhi . In these har d disks some excel files were fo und which showed that the appell ant company re ceived a sum of Rs.3,84,86,000/- in cash. O n the basis of this info rmation, the Assessing Officer, Ward-5(2), New Delhi afte r recording the reaso ns, issued a notice u/s 148 on 19.03.2012 to the appe llant company, in response to which the appellant filed a letter stating that the original return file d u/s 139(1) be treated as retur n filed u/s 148. Thereafter, the case of the appellant was centralize d with the present Assessing Officer, Central Circle-9, New De lhi and therefo re, a fresh notice u/s 143(2) was issued to the appellant company. In response to the same, the AR of the appellant attended the assessment proceedings on various dates and filed the wr itte n submissio ns which were place d on re cord. There upon, the Assessing Officer completed the assessment wherein the income of Rs.62,910/- originally assessed vide orde r u/s 143(3) date d 19.12.2007 was again re-assessed in terms of an order dated 30.03.2013 u/s 143(3)/147 of the IT Act, 1961, which is no w in appeal.
While completing the impugned assessment the Assessing Office r observed as under :
"The AR o f assessee submitte d the copy o f Accounting Standard- 9, issue d by the Institute of Chartered Accountant o f India. The assessee had adopted contr act completio n method "CCM”, and its income can be recognized in his hands in the assessment year in which the project was completed.
The assessee requested that the assessee has regularly adopted the "CCM’ and the last assessment was done on the "CCM" Method.
Even if we adopte d the Perce ntage completio n metho d "PCM" the minimum thresh hold limit fo r minimum completion o f project is 25% as per theAS- 9 whereas the assessee had completed on 24.24% which is lo wer than the prescribed limit.
It is undisputed that the assessee had received cash amounting to Rs.3,84,86,000/- as advances from the customers during the F .Y, 2004-05. The main ques tion is that in which A.Y. the revenue will be recognize d. The assessee has stated that this year was the first year of bookings.
Keeping in the view the facts and submission of the assessee, it is seen that e ven if the CCM or PCM Method is applied, no revenue was recognize d in F.Y. 2004-05 i.e . A.Y. 2005-06. With t hese remarks the income of the assessee originally assessed u/s 143( 3) at Rs. 62,910/- dated 19.12.2007 is being assessed u/s 143( 3)/147 o f the Income Tax Act, 1961. T he amount of undisclosed income of Rs.3,84,86,000/- will be taxe d in the ye ar when the project was completed."
In response to the notice issued u/ s 250 of the IT Act, 1961 Sh. R aj eshwar Prasad Painuly, CA atte nded the proceedings and filed a paper book containing the written submissions, copy of the notice u/ s 148, co py of the reasons reco rde d by the Assessing Office r, copy o f the objectio ns file d on the reasons recorded by the Assessing Office r and the copies of the submissions made during the course of assessment proceedings through various replies. On going thro ugh the submissions of the appe llant, I find that the appe llant has challenged the issue o f no tice u/ s 148 o f the IT A ct, 1961 as null and void for the reaso ns stated in the grounds of appeal and in the writte n submissions filed. The appe llant is also aggrieved with the finding of the Assessing Officer that the appe llant had receive d an unaccounted cash of Rs.3,84,86,000/- from AEZ group of companies as per details contained in the exce l file of har d disks found and seized during the course of search proceedings in Aerens group of cases. However, on going thro ugh the assessment o rde r, I find that the re is no cause fo r any grie vance fo r the appellant so far as the present assessment unde r appe al is concerned. In the re-assessment proce edings u/s 147 re ad with section 148, the Income Tax Office r acce pted the return o f i nco me filed in response to notice u/s 148 as it is on the basis of which the assessment of the appellant was ear lier completed in term s of order u/s 143(3) date d 19.12.2007 at the re turned income, except for the observation with regard to the cash received by the appe llant as advance from the customers. S ince, no addition was made in the assessment o f the appe llant for the assessment year under consideratio n and the issue of cash amounting to Rs.3,84,86,000/- r eceived by the appellant was left to be conside red for taxation in the year when the proj ect would be completed, the re is no reason to inter fere with the present assessment or der o f the Assessing Officer as no grievance arises out of such an order passed by the Assessing Officer. It is pertinent to mentio n that when the returned inco me was accepte d, all the othe r actions of the Assessing officer relating to re-assessment proceedings u/s 147 re ad with section 148 beco mes infructuous and therefore , there sho uld not be any cause of grie vance on this count also .
4.In view of the above discussion, the appeal is dismisse d.”
This is what leaves the assessee aggrieved.
Learned counsel’s first and foremost argument seeks to s t invoke violation of se ction 147 1 proviso that the reopening herein had been set into motion beyond four year s from the end of the relevant assessment year which is not sustainable in law. Learned counsel fairly submits that he does not even have reopening reasons in the case records. We are of the considered view that the impugned reopening could not be disturbed in abse nce of such reopening reaso ns. Reje cted accordingly.
Learned counsel’s second argument before us is that both the lower authorities ought to have invoked section 153 of the Act than reopening se ction 148 which is not sustainable in law since involving the search actio n herein on 17.08.2011. We find no merit in the assessee’s instant second substantive ground as well in light o f CIT Vs. Naveen Kumar Gupta (2025) 479 ITR 586 (Del.) settling the issue in the departme nt’s favour that section 148 proceedings could indeed be initiated even in an instance involving section 132 search action. Reje cted accordingly.
Learned counsel’s third argument is that the impugned addition of the asse ssee’s alleged undisclosed income of Rs.3,84,86,000/- is merely based on some loose excel sheet than followed by due corroboration thereof by the departmental authorities herein. We notice herein as well that the assessee has not been bothered to place on record the said alleged loose shee t in support of it’s arguments. We thus see no reason to inter fere with the impugned addition on merits as well.
No other ground or argument has been pressed before us.
This assessee’s appeal is dismissed.