skn 1 2164.19-wp.doc IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 2164 OF 2019 Belazio Construction Private Limited. Petitioner. V/s. Income-tax Officer, Ward-12(1)(3). Respondent. Mr.S.C.Tiwari with Ms.Rutuja Pawar for Petitioner. Mr.Sham Walve with Mr.Pritish Chatterjee for Respondent. CORAM : M.S. SANKLECHA AND NITIN JAMDAR, JJ. DATE : 23 August 2019. P.C. : This petition under Article 226 of Constitution challenges notice dated 15 March 2019 issued under section 148 of Income Tax Act, 1961 (Act). impugned notice dated 15 March 2019 seeks to reopen assessment for assessment year 2017-18. 2. reasons recorded in support of impugned notice as communicated to petitioner read as under: Reasons for reopening assessment recorded u/s. 147 of I.T.Act, 1961: ::: Uploaded on - 03/09/2019 ::: Downloaded on - 04/09/2019 09:22:25 ::: skn 2 2164.19-wp.doc Assessee is domestic company engaged in business of 'builder' as per Audit Report u/s. 44AB of I.T.Act. Return of Income for Asst. Year 2017-18 declaring total income of Rs.12,08,820/- was filed on 01- 11-2017. Return of Income was processed u/s. 143(1) of Act. From perusal of Profit and Loss Account it is noticed that assessee has shown sales turnover of Rs.7,64,57,100/- and net profit of Rs.2,42,014/-. assessee has debited s.5,20,04,334/- being cost of plot and farm development expenses of in addition to various other expenses. During course of assessment proceedings for Asst. Year 2015-16 it is notice that assessee has escalated land cost to Rs.25 crores through sham agreements whereas market value of land was Rs.1,32,46,000/-. enquiries made during course of assessment proceeding for A.Y. 2015-16 by obtaining sale instances of same area it is noticed prevailing market value of property is Rs.1,32,46,000/-. In view of these facts market value of property i.e. Rs.1,32,46,000/- was taken as cost of land as against Rs.25 crores claimed by assessee in assessment order for A.Y. 2015-16. Subsequently, assessment for A.Y. 2016-17 on identical issue and disallowance of excess claims of land cost made. In current assessment year assessee has shown proportionate land cost at Rs.25 crores. assessee is entitled to proportionate land cost on market value of Rs.1,32,46,000/- and proportionate farm development expenses. In view of above facts, undersigned has reasons to believe that income chargeable to tax has escaped assessment for year under consideration within meaning of Sect. 147 of I.T. Act. Therefore, I am ::: Uploaded on - 03/09/2019 ::: Downloaded on - 04/09/2019 09:22:25 ::: skn 3 2164.19-wp.doc satisfied that this is fit case to issue notice u/s. 148 r.w.s. 147 of I.T.Act. 3. On 1 November 2017, petitioner filed its return of income for subject assessment year 2017-18. return of income was processed by intimation under section 143(1) of Act. Thereafter as recorded in reasons in support of impugned notice, for earlier assessment year 2015-16, Assessing Officer in assessment order under section 143(3) of Act had held that cost of land had been inflated to Rs.25 crore when, in fact, value was 1.32 crore. It is on basis of this information obtained in support of earlier assessment proceeding that impugned notice was issued. 4. Mr.Tiwari, learned counsel appearing in support of petition submits that there is no power in Assessing Officer to substitute value of land which was based on consideration paid for purchase of land. Further there is no material on record on basis of which Assessing Officer can come to conclusion that value of land as declared by petitioner was not correct. 5. We find that reopening notice has been issued on basis of information obtained during course of assessment of earlier assessment year under section 143(3) of Act. Such ::: Uploaded on - 03/09/2019 ::: Downloaded on - 04/09/2019 09:22:25 ::: skn 4 2164.19-wp.doc information can form valid basis for issuing reopening notice. In facts of present case, assessment for subject assessment year was by virtue of intimation under section 143(1) of Act. Therefore Assessing Officer had no occasion to examine claim of Petitioner. It is on basis of tangible information now received that impugned reopening notice has been issued, as is evident from reasons recorded. Therefore reasons do make out prima facie case that income chargeable to tax for subject assessment year has escaped assessment. This of-course is subject to Petitioner's pointing out in re-assessment proceeding that on merits such addition as proposed is not permissible in law. 6. We see no merit in petition. Accordingly, petition is dismissed. NITIN JAMDAR, J. M.S. SANKLECHA, J. ::: Uploaded on - 03/09/2019 ::: Downloaded on - 04/09/2019 09:22:25 ::: Belazio Construction Private Limited v. Income-tax Officer, Ward-12(1)(3)