PRINCIPAL COMMISSIONER OF INCOME TAX, MAHATMA GANDHI ROAD Vs. SANTECH SOLUTIONS PVT LTD LLOYDS ROAD, ROYAPETTAH

JUDGEMENT

(1.) This appeal is against an order dated 7.12.2017 passed by the Income Tax Appellate Tribunal, 'B' Bench, Chennai, allowing the appeal, being I.T.A.No.1036/Mds/2016, filed by the respondent assessee against an order dated 22.1.2016 passed by the Commissioner of Income Tax (Appeals)-15, partly allowing I.T.A.No.11/CIT(A)-15/14-15 against an impugned order of reassessment dated 12.3.2014.

(2.) The respondent assessee filed return of income on 30.9.2008 for the assessment year 2008-2009 showing Nil income. The case was selected for scrutiny and assessment was completed under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the IT Act"), accepting the returned income.

(3.) It was later noticed that an advance of Rs. 1,05,93,698/-received by the respondent assessee had not been credited to the profit and loss account, but to the software development account. It was also noticed that income on software development had not been offered on accrual basis. Having reason to believe that income had escaped assessment, notice was issued under Section 148 of the IT Act, to which the respondent assessee filed an e-return on 22.4.201 Thereafter, income was reassessed and reassessment completed under Section 143(3) read with Section 147 of the IT Act on 12.2014, assessing the income of the respondent assessee at Rs. 1,34,63,304/-.