TaxTMI 
TaxTMI 
TaxTMI 
2014 (2) TMI 944
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....ed by the assessee in the course of search conducted u/s 132(1) of the Act. 4. In the context of controversy before us, the relevant facts can be summarized as follows. The appellant is a partnership firm engaged in construction business which was subject to a search action u/s 132(1) of the Act on 06.10.2009. In the course of search, Shri Rajesh Malpani, partner of the assessee firm in a statement recorded u/s 132(4) of the Act on 03.12.2009 admitted certain undisclosed income in relation to housing project undertaken by the firm i.e. 'The Crest' at Pimple Saudagar, Pune. The assessee duly reflected such additional income in the returns of income filed for the captioned assessment years as the profits from its housing project, and since the said housing project was eligible for deduction u/s 80IB(10) of the Act, it claimed deduction u/s 80IB(10) of the Act even in relation to such additional income. Such claim of the assessee has been denied, which is the subject- matter of dispute before us. 5. As the facts and circumstances pertaining to the aforesaid dispute are common in all the assessment years, the appeal for assessment year 2008-09 is taken as a lead case in order to appr....
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....dly, according to the Assessing Officer, the on-money received by the assessee on sale of flats was not taxable as 'business income' and hence assessee was not eligible for deduction u/s 80IB(10) of the Act. On being denied u/s 80IB(10) of the Act on the component of the on-money declared in the return filed u/s 153A(1)(a) of the Act, assessee carried the matter in appeal before the CIT(A). 7. In appeal, assessee assailed the action of the Assessing Officer in law and on facts. Assessee canvassed that there was no justification for not allowing the claim u/s 80IB(10) of the Act with respect to the impugned income which was ostensibly derived from the execution of the housing project, 'The Crest' at Pimple Saudagar, Pune, which was eligible for deduction u/s 80IB(10) of the Act. On facts, assessee canvassed out that the additional income in question was unaccounted sale consideration received from customers to whom flats were sold and accordingly the same was liable to be assessed as 'business income' and not as 'income from other sources'. The CIT(A) has since disagreed with the stand of the assessee and has affirmed the action of the Assessing Officer in denying the deduction u/s....
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....e u/s 153A(1)(b) of the Act as a consequence of a search action u/s 132(1) of the Act. 11. In the course of search, in a statement deposed u/s 132(4) of the Act, assessee declared certain additional income pertaining to the housing project in question. The additional income declared was on account of on-money received from the customers to whom flats were sold in the said project. At the time of hearing, learned counsel referred to the copy of statement recorded u/s 132(4) of the Act of Shri Rajesh Malpani, a partner of the assessee firm and also copies of some of the seized papers, which indicated receipt of on-money, and the same have placed in the Paper Book at pages 35 to 52. A perusal of the seized material shows that a complete detail of that on-money received is enumerated, viz. name of the customers, amount and the respective flat sold in the project. Even in the deposition made u/s 132(4) of the Act, the partner of the assessee firm made a yearwise detail of additional income declared on account of on-money received on sale of flats in the project. Accordingly, the impugned sum has been declared as unaccounted income from the housing project in question. In the return of ....
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....not accounted for in the account books. In this manner, we are unable to accept the stand of the Assessing Officer or of the CIT(A) that the said income is not liable to be taxed as 'business income'. 12. Now, coming to the point as to whether such 'business income' qualifies to be eligible for deduction u/s 80IB(10) of the Act in the course of an assessment made u/s 153A(1)(b) of the Act. On this aspect, the learned Departmental Representative submitted that the assessment in cases of search action or requisition are made u/s 153A or 153C of the Act in order to assess undeclared incomes and such provisions are for the benefit of the Revenue and therefore a claim u/s 80IB(10) of the Act cannot be considered in such proceedings, especially when such a claim was not made in the return of income originally filed under section 139 of the Act. In this regard, the learned Departmental Representative has referred to the judgment of the Hon'ble Supreme Court in the case of CIT vs. Sun Engineering Works Pvt. Ltd., 198 ITR 297 (SC) to point out that even in the cases of re-assessment u/s 147/148 of the Act fresh claims cannot be raised by the assessee. Secondly, it is pointed out by the lea....
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.... section" in Explanation (i) of section 153A of the Act, it clearly implies that in assessing or reassessing the 'total income' for the assessment years specified in section 153A(1)(b) of the Act, the import of section 80A(1) of the Act comes into play, and there shall be allowed the deductions specified in Chapter VIA of the Act, of course subject to fulfillment of the respective conditions. Therefore, we are unable to subscribe to the stand of the CIT(A) to the effect that the benefits of Chapter VIA of the Act, which inter-alia include section 80IB(10) of the Act, are not applicable to an assessment made under sections 153A to 153C of the Act. In our considered opinion, the phraseology of section 153A r.w. Explanation (i) as noted above, does not support the premise arrived at by the CIT(A) and accordingly, the same is rejected. Therefore, assessee's claim for deduction u/s 80IB(10) of the Act even with regard to the enhanced income was well within the scope and ambit of an assessment u/s 153A(1)(b) of the Act and the Assessing Officer was obligated to consider the same as per law. 15. The other argument of the Ld. CIT-DR to the effect that the return of income was not accompan....
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....assessee from claiming deduction u/s 80IB(10) of the Act on the impugned additional income declared in the return filed in response to notice u/s 153A(1)(a) of the Act. In the present case, the claim of deduction u/s 80IB(10) of the Act was made in the return of income originally filed and in the return filed in pursuance to the notice u/s 153A(1)(a) of the Act, the claim u/s 80IB(10) of the Act is only enhanced and therefore, it is not a fresh claim. Therefore, in our view, the judgment of the Hon'ble Supreme Court in the case of Sun Engineering Works Pvt. Ltd. (supra) does not help the Revenue in the present case. 17. In-fact, the Hon'ble Bombay High Court in the case of Sheth Developers (P) Ltd. (supra) was considering the claim of deduction u/s 80IB(10) of the Act in relation to the undisclosed income declared consequent to the search action. In the case before the Hon'ble High Court, it was factually emerging that undisclosed income was earned by the assessee in the course of carrying on his business activity of a 'builder' and the same was accepted by the Department, but the claim of the deduction u/s 80IB(10) was denied in relation to such income. However, the claim was uph....