TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 1108
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....cer examined the investment made in the purchase of flat and considered the entire amount of Rs. 4,52,000/- invested by assessee as un-explained. The Ld.CIT(A) after considering the additional evidence filed and remanding the documents to Assessing Officer, deleted the addition as the sources are explained. However, while considering the same, Ld.CIT(A) also held that proceedings u/s.153C are invalid and consequently, the assessment made in pursuance of the same was also invalid. 3. Coming to AYs.2008-09, 2009-10 and 2010-11, the facts of the case are that assessee entered into development agreement on certain lands being developed by M/s. Sree Constructions at the ratio of 40:60 of the built up area between the land owners and developers. As a part of the agreement, assessee received two flats measuring 2,460 sq. ft., which were sold in semi-finished stage in the months of August and September, 2008. Assessee offered Long Term Capital Gains in AY.2010-11 after claiming exemption u/s.54F on investment a flat for Rs. 21 lakhs. The Assessing Officer did not agree with the claim of assessee that Long Term Capital Gains arose in AY.2010-11. According to him, since land was given on de....
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.....2008-09 are extracted as under for the sake of record: 5.6 It is a common feature of searches conducted u/s 132 of the I.T.Act that they contain details of unaccounted transactions of the persons searched and, hence, have implication of unaccounted income for the persons searched as well as for other parties with whom the transactions had been entered into. The language of the section 153C of the I.T. Act, is clear that it is not permissible for the AO to treat such documents as belonging to the person searched while making assessment u/s 153A of the I.T Act and also record the satisfaction that the same belonged to some other person (so that proceeding u/s153C of the I.T.Act could be initiated against the latter). It is also not the requirement of law that, in such cases, the assessment has to be somehow made u/s 153C of the I.T.Act only. The provision of section 153C is a special one and comes into play only when the objective conditions leading to the satisfaction that the seized valuables/documents belonged to a person other than the person searched exist. No doubt, this provision overrides the normal provisions relating to assessment of income i.e. section 143, 147, etc. But....
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....invalid and, consequently, the assessment made in pursuance of the same was also invalid. The appropriate course of action for the AO in the given facts and circumstances of the case was to treat the copy of the impugned documents as a source of information and initiate proceedings u/s 147 of the I.T.Act on the basis of the same. Since the assessment made u/s 153C has been annulled, the AO is free to initiate proceeding u/s 147 of the I.T.Act by following the prescribed procedural requirements. 6. Since no incriminating material pertaining to assessee was found in the course of search and the transaction which was entered by assessee for development was already on record, we are of the opinion that there is no merit in the Revenue contentions. In fact as seen from the order in AY.2004-05, Assessing Officer did not even have any documents pertaining to that year and the only addition made was about assessee's investment in purchase of a flat, which has no connection to the search at all. In view of this, we do not find any reason interfere with the orders of CIT(A) on the issue of jurisdiction u/s.153C. Accordingly, Revenue's appeals in AYs.2004-05, 2008-09, 2009-10 are dis....
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....computation of capital gain on the properties sold at Jubilee Hills, Hyderabad on 10-11-2004. In this case, the proceedings of 153C were initiated on the reason that certain documents were seized and are related/belonging to assessee. However, in the assessment proceedings u/s 153C, the Assessing Officer denied the claim of deduction u/s.54F. On the objection raised by assessee with reference to proceedings u/s.153C, Ld.CIT(A) examined the seizing material and documents and held as under: 4.5 It is a common feature of searches conducted u/s 132 of the I.T.Act that they contain details of unaccounted transactions of the persons searched and, hence, have implication of unaccounted income for the persons searched as well as for other parties with whom the transactions had been entered into. The language of the section 153C of the I.T. Act, is clear that it is not permissible for the AO to treat such documents as belonging to the person searched while making assessment u/s 153A of the I.T Act and also record the satisfaction that the same belonged to some other person (so that proceeding u/s153C of the I.T.Act could be initiated against the latter). It is also not the requirement of l....
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.... additional tax liability of B and the documents are not found to be belonging to B, such information forms a valid reason to believe that income in the case of B has escaped assessment and such reason is a valid genesis for initiating proceeding u/s 147 of the I.T.Act against B. 4.7 In view of the foregoing discussion, it is held that the primary requirement of invoking the provisions of section 153C of the I.T.Act was absent in this case. The requirement of recording the satisfaction that the impugned documents belonged to a person other than the person searched was not met in form and in substance. Consequently, the proceeding initiated by the AO u/s 153C in this case was void ab initio and the assessment made by him in pursuance of the same was also invalid. The appropriate course of action in the given facts and circumstances of the case was for him to treat the copy of the impugned documents as a source of information and initiate proceedings u/s 147 of the I.T.Act on the basis of the same. Since assessment under appeal is annulled. 11. However, while holding that proceedings u/s.153C are void ab initio, the Ld.CIT(A) opined that proceedings u/s.147 could be initiated. Whil....