Law: Income Tax Act, 1961

Section: 145,234

Section 145, read with sections 234A and 234B, of the Income-tax Act, 1961 - Method of accounts - Project completion method (Parking charges) - Assessment year 2000-01 - Assessee was engaged in business as builder and developer and was following project completion method for payment of taxes - Assessee received parking charges collected on vacant land belonged to him - However, he did not file return on ground that income earned on parking charges would be taxed when project would be complete - Whether since parking charges had nothing to do with assessee's project and was assessable to tax, assessee was obliged to pay advance tax - Held, yes - Whether therefore, non-payment of same would levy interest under section 234A and 234B - Held, yes [Para 10] [In favour of revenue] FACTS â–  The assessee was engaged in business as builder and developer. The assessee was following project completion method for purposes of paying its taxes. â–  During the course of the assessment proceedings for assessment year 2003-04, it was found that an amount of Rs. 15.48 lakhs was income chargeable to tax in assessment year 2000-01 being income generated on account of parking charges collected on the vacant land available with the assessee and had nothing to do with any of the projects being executed by the assessee. â–  As the assessee had not filed his return of income for the assessment year 2000-01, a notice under section 148 was issued. Consequent thereto, the income received from parking charges was assessed to tax for the assessment year 2000-01. â–  On appeal, the Commissioner (Appeals) set aside the order of the Assessing Officer on the ground that the amount earned by assessee by exploiting vacant land was an amount relatable to costs of the project and therefore, property was offered to tax in the assessment year 2003-04. â–  On appeal, the Tribunal set aside the order of the Commissioner (Appeals) by holding that the amount received on account of parking charges was not a part of any project and was business income and chargeable to tax for the assessment year 2000-01. â–  Thereafter while giving effect to the order of the Tribunal in…

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