Tax Amendment Alters Interpretation, Pre-2015 Searches Affected; Case Remanded for Reconsideration.

The HC set aside the ITAT's order under Section 260A of the Income Tax Act, 1961, due to the legislative amendment by the Finance Act, 2015, which altered the interpretation of "belongs to" to "pertains to." The amendment was deemed applicable to pre-1-6-2015 searches. The appeals were remanded to ITAT for reconsideration of unresolved grounds raised by the assessee, with both parties agreeing to the Revenue's favor. The appeals were allowed without costs.

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Issues:
1. Appeal against the order of the Income Tax Appellate Tribunal under Section 260A of the Income Tax Act, 1961.
2. Interpretation of the terms "belongs to" and "pertains to" in Section 153C of the Act.
3. Applicability of the Finance Act, 2015 amendment to searches conducted before 1-6-2015.
4. Request for remand of the matter to the Tribunal for consideration of remaining grounds raised by the assessee.

Analysis:
1. The Revenue filed appeals under Section 260A of the Income Tax Act challenging the order of the Income Tax Appellate Tribunal for assessment years 2007-08 and 2008-09. The questions framed for consideration pertained to the interpretation of the Land Aggregation Agreement in relation to the respondent-assessee and the Ramprastha Group of companies.

2. The Supreme Court's decision in Income-tax Officer v. Vikram Sujitkumar Bhatia highlighted the restrictive view taken by the Court in Pepsico India Holdings (P.) Ltd. v. ACIT and Anr regarding the terms "belongs to." The Finance Act, 2015 amended the Act, substituting "belongs or belongs to" with "pertains or pertains to." The Tribunal's restrictive interpretation of "belongs to" was deemed invalid post the legislative amendment.

3. The Tribunal's decision was overturned based on the legislative amendment and the Supreme Court's ruling, which held that the amendment applies to searches conducted even before its enactment. The judgment emphasized the applicability of the Finance Act, 2015 to searches conducted under section 132 of the Act before 1-6-2015. Consequently, the impugned order was set aside, and the appeals were restored before the Tribunal for consideration of remaining grounds raised by the assessee.

4. Both parties agreed that the questions raised were resolved in favor of the Revenue. The remaining grounds raised by the assessee were to be reconsidered by the Tribunal. Hence, the matter was remanded to the Tribunal for further consideration. The judgment disposed of the present appeal in these terms, allowing the appeals but with no order as to costs.

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