TaxTMI 
TaxTMI 
2014 (6) TMI 807
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....residential premises of Shri K.M. Nassaruddin and Shri C. A Latheef, who are partners of M/s NL Properties & Developers. A consequential search was also conducted at the premises of the assessee on 22-01-2008. On the basis of the material found during the course of search operations, the assessing officer issued notice u/s 158BC of the Act. According to the ld.DR, the assessee acted as an aggregator of land for ETL Infrastructure Services Ltd. As per the Memorandum of Understanding executed between the assessee and M/s ETL Infrastructure Services Ltd, the assessee agreed to arrange sale of 3,000 acres of land at Mulanthuruthy and Poothotta. The ld.representative further submitted that upto the financial year 2007-08, around 800 acres of land was transferred to M/s ETL Infrastructure Services Ltd either by executing the sale deed or by executing the power of attorney by the respective owners after receiving the full sale consideration. According to the ld.DR, during the financial year 2006-07 relevant to assessment year 2007-08 the assessee has received Rs.67,40,93,530 from M/s ETL Infrastructure Services Ltd as advance for purchasing the land. The assessee claimed certain expenditu....
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....n of road, construction of bride, etc. Therefore, the role of the assessee is not broker alone. The assessee acted as a civil contractor on behalf of M/s Jain Housing & Construction Pvt Ltd. Hence, according to the ld.DR, the assessing officer has rightly estimated the profit at 10% of the total receipt. 7. On the contrary, Shri CBM Warrier, the ld.representative submitted that the assessing officer passed the assessment order u/s 153BC r.w.s. 143(3) of the Act. According to the ld.representative, no material was found during the course of search operation. In the absence of any seized material, according to the ld.representative, proceedings initiated u/s 153C is illegal and void. The ld.representative further submitted that there was a search at the residential premises of the assessee and no evidence was found with regard to earning of income. In the case of Jain Housing and Construction Co Pvt Ltd, according to the ld.representative, there was a survey u/s 133A of the Act on 06-08-2009. According to the ld.representative, the material found during the course of survey operations in the hands of Jain Housing & Construction Co Pvt Ltd cannot be a basis for framing the assessme....
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....n 153C of the Act which reads as follows: "153C (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A: Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to subsection (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other p....
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....of the Act since the assessee is not the searched person. Therefore, the contention of the assessee that no material was found during the course of search operation is not correct. 9. Now coming to the question of satisfaction of the assessing officer, the Kerala High Court, time and again, after referring to the judgment of the Apex Court in the case of Manish Maheshwari held that if the assessing officer is the same for the searched person and the person other than searched, then the question of transfer of records may not arise, therefore, the non recording of satisfaction may not vitiate the assessment proceedings. In view of this judgment of the Kerala High Court which is binding on this Tribunal, the contention of the assessee that the assessing officer has not recorded any satisfaction, has no merit at all. 10. The next contention of the assessee is that the assessing officer issued notice u/s 153C on 13-02-2009 asking the assessee to file return of income within 30 days, herefore, the return filed on 19-08-2009 cannot be acted upon. We are unable to accept the contention of the ld.representative for the assessee. The officer who is empowered to issue notice fixing a t....
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....case of ETL Infrastructure Services Ltd the assessee arranged purchase of 800 acres of land during the financial year 2007-08 and received around Rs.67,40,93,530 from them. The assessee is not maintaining any books of account for real estate business. But the fact that the assessee is acting as a broker for ETL Infrastructure Services Ltd and Jain Housing & Construction Co Pvt Ltd is not in dispute. Therefore, the entire money received by the assessee cannot be treated as his income. What is to be taken as income is only the profit element embedded in this transaction. The assessing officer has estimated 5% of the total receipt as profit in the case of ETL Infrastructure Services Ltd. However, the same was reduced to 2.5% by the CIT(A). It is common knowledge that in real estate transaction the percentage of commission for acting as a broker / facilitator between the vendor and the vendee ranges from 0.5% to 3% depending upon the transactions. The assessing officer in this case has estimated 5% as commission. Therefore, this Tribunal is of the considered opinion that estimation of profit at 5% is on the higher side. Even though the CIT(A) has modified the profit at 2.5% on the tota....