Law:

Section:

Section 147 of the Income-tax Act, 1961 - Income escaping assessment - Non-disclosure of primary facts - Assessment year 2007-08 - In its return of income, assessee computed its business income after deducting certain amount which was its share of profit from an AOP doing business of real estate developers and was exempt under section 167B(2) - Assessing Officer, after considering all relevant documents, passed assessment order - However, thereafter, Assessing Officer issued notice for reopening assessment on ground that documents seized during survey at assessee's business revealed that assessee had received its share from gross sale proceeds and not from share of profits against surrender of development rights in land - Whether when revenue had evidently treated AOP as a valid entity in law and had brought it to tax in order of assessment for assessment year 2007-08 and material relied upon by Assessing Officer for reopening assessment had been submitted during original assessment proceeding, reopening of assessment was unjustified - Held, yes [In favour of assessee] FACTS The assessee-company filed return of income for relevant assessment year. The income from business was computed after deducting an amount of Rs. 3.49 crores which was the profit from an AOP exempt under section 167B(2). A note was appended to the return of income stating that the assessee was a member of an AOP doing business of real estate developers and that since the tax on the AOP was payable in the case of the AOP itself under section 167B(2), no tax was payable by the assessee in respect of its share of income from the AOP. The Assessing Officer called upon the assessee to disclose information, inter alia, relating to the ledger extract of the assessee's capital account with the AOP and the objects for which the assessee had used the fund drawn from the account. In response, the assessee enclosed copies of (i) a joint venture agreement between the assessee and a developer 'R' executed on 26-8-2002; and (ii) an agreement pertaining to the AOP. The assessee disclosed that it had contributed land by way of capital to the AOP. Thereafter, the Assessing Officer passed assessment order. The…

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