JAMMU DEVELOPMENT AUTHORITY Vs. UNION OF INDIA

JUDGEMENT

(1.) EXERCISING power under Section 142 (2A) of the Income Tax Act, 1961, hereinafter to be referred as the 'Act, the Assistant Commissioner of Income Tax, Circle -1, Jammu, vide his order No.ACIT/Cir -1/JMU/590 dated 26 -12 -2008, directed Special Audit of the accounts of the petitioner -Jammu Development Authority, by M/s Gupta -Gupta and Associates, 142/3, Trikuta Nagar Jammu, nominated as such, by the Commissioner of Income Tax, Jammu and Kashmir, Jammu.

(2.) BEFORE passing aforementioned order, the Assistant Commissioner had issued a show cause notice to the Petitioner -Authority, inter alia, indicating that on the Asset side of the Balance Sheet of the petitioner -Authority, it had been shown that the work in respect of Division nos -1 and 2 amounting to Rs.65,03,39,219/ - was in progress, but neither the nature of the Asset had been explained nor had it been shown as to how this asset had been brought up. The sources of the funds utilized for the construction of the asset, too, had not been disclosed by the Authority. The notice further indicated that on the asset side of the Balance Sheet, the Petitioner -Authority had shown total Fixed Asset of the value of Rs.11,29,30,536/ - on which the depreciation had been claimed at Rs.40,64,004/ -, but as per the Schedule of Fixed asset, filed by the Jammu Development Authority on 15 -12 -2008, through its counsel, the total value had been shown at Rs.108,34,82,381/ - which figure would not tally with the figures given in the Balance Sheet. The Balance Sheet and the Schedule of Fixed Asset filed by the petitioners counsel indicated that none of the plots of land available with the Authority, had been accounted for, in the Balance Sheet.

(3.) THE accounts furnished by the Petitioner -Authority along with the return of Income Tax, including the Tax Audit Report, had been found incomplete and unreliable by the Assistant Commissioner of Income Tax which, according to him, had disabled determination of the correct taxable income/loss of the Jammu Development Authority for the accounting year 2006 -2007. The Authority had been further informed, by the show cause notice aforementioned, that it had failed to justify as to how had it shown Bahu Plaza Shopping Complex in the Schedule of its Fixed Assets whereas premium was shown to have been received for it from different persons to whom it had been leased out as per the lease Agreements executed with the Authority.