AI Drafter 
TaxTMI 
TaxTMI 
2015 (7) TMI 992
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.... u/s 80IB(10) of the Act of Rs. 8,59,151/-. The same may please be directed to be allowed such claimed. Ground No.3 On the facts and in the circumstances of the case, the ld. CIT(A)-1, Ahmedabad has grossly erred in confirming the charging interest u/s 234A, 234B, 234C & 234D of the Act. He may be directed to withdraw the same. Ground No.4 On the facts and in the circumstances of the case, the ld. CIT(A)-1, Ahmedabad has grossly erred in confirming the initiation of penalty proceedings u/s 271(1)(c) & 271AAA ri.w.s. 274 of the Act. He may be directed to withdraw the same. 2.2 IT(SS) A No.381/Ahd/2014 Asst. Year 2007-08 Ground No.1. In law, on the facts and in the circumstances of the case, the ld. CIT(A)-1, Ahmedabad has grossly erred in not considering the appellant's submissions made before him as such the order is against principle of natural justice, bad in law and deserves to be cancelled. Ground No.2 On the facts and in the circumstances of the case, the ld. CIT(A)-1, Ahmedabad has grossly erred in confirming the legitimate deduction u/s 80IB(10) of the Act of Rs. 53,57,814/-. The same may kindly be directed to be allowed such claimed. Ground No.....
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.... 3. The facts of the case are that the assessee firm carries on the business of development and construction of residential houses. During the year under consideration, the assessee has undertaken the construction work of a housing project known as ''Madhav Park''. On 21/07/2011 a search operation was conducted at the business premises of the assessee firm and partners residence premises. During the course of search proceedings certain incriminating materials were found and seized by the department. The assessee firm was issued notice under section 153A(1)(a) of the Income-tax Act, 1961 to file block return of income. In response thereto, the assessee firm has filed return for the block period showing total income at Rs.NIL after claiming deduction u/s 80IB(10) of Rs. 5,65,48,683/- for A.Y. 2008-09 incorporating the income generated out of the regular books of account as well as income appearing in the incriminating materials. The assessee firm's claim of deduction u/s 80IB(10) of the Act was rejected by the Assessing Officer in his order under section 143(3) r.w.s. 153A of the Act considering the assessee firm as a ''contractor'' and not as a ''developer'' as the land was not owne....
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....he claim was rejected and as stated above same was confirmed by CIT(A). 4.3 We find that the original development permission was obtained on 01/05/2004 as detailed on page No.143 of P.B. The revised development permission dated 10/07/2006 was obtained as mentioned at page No.145/192 of P.B. Subsequently BU permission dated 22/09/2008 was for 74 residential tenements + 1 electric sub-station + 1 room and over head tank as detailed at page No.191 of paper book. Further revised development permission dated 16.07.2012 was obtained for 18 shops + 54 residential flats as detailed on Paper Book page No.147. BU permission dated 16.06.2012 is for 54 residential flats + 18 shops as detailed at page no.366 of P.B. Originally total area owned by the society was of 16,815 sq.mtrs. out of which 14,843.27 sq. mts. of land was entrusted to the assessee firm to develop 74 residential tenements + 1 electric sub-station + 1 room and over head tank by an agreement in writing English translation of same annexed at P.B.page Nos.75 to 79 of the Stay Petition Nos.117 to 119 of 2014 which has also been filed before us as well. Balance land of 1971.73 sq. mtrs. was entrusted for development to Panchamrut....
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....on 80IB(10) has to be looked vis-à-vis this piece of land measuring 14.843.27 sq.mts. on which the activity of construction fulfilled the conditions of section 80IB(10) as discussed above. The claim of the assessee cannot be negated on the ground that some portion was constructed by other firm assigned by the society which does not fulfill the condition of section 80IB(10). The claim of section 80IB(10) of non-allowable area is separate altogether which should not be mixed and confused with assessee's claim. In fact same has to be looked in its facts and circumstances altogether. Thus, coming to the issue of ownership, this is covered in favour of assessee by the decision in the case of Radhe Developers wherein it has been held that domain of assessee has to be look in the light of dominant role in the building project carried out be assesseee as entrepreneur. Under facts and circumstances, assessee has worked as developer so, it is entitled for deduction as claimed under the provision of 80IB(10) of Act. This take cares claim of assessee u/s 80IB(10) of the Act for all three years as discussed above. The assessee fulfills all the conditions laid down in section 80IB(10). As....
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....in the case of CIT vs. Suman Paper & Boards Ltd. (2009) 221 CTR 0781 wherein it was held that in view of amendment on the provisions of section 158BB by the Finance Act, 2002 with retrospective effect from 1st July, 1995 the assessee was entitled to claim deduction under sec. 80-I or section 80-IA in block assessment of the block period. The Revenue has acknowledged the benefit of deduction with regard to undisclosed income of the block period. 6.3 In the case before us the issue is with regards to the benefit of exemption under section 54B with regard to the on money. Both are beneficial provisions in their own spheres so drawing the same analogy, we are of the view that assessee is entitled for getting benefit of exemption u/s. 54B with regard to the 'On money'. This view is fortified by decision of Hon'ble Bombay High Court in the case of CIT vs. Sheth Developers (P) LTD. in ITA No. 3724 of 2010, wherein it was held that assessee was entitled to the benefit of Sec. 80IB and accordingly directed the A.O. to recompute the tax payable for the block period 1.4.1995 to 21.2.2002 u/s. 185BB after giving benefit of Sec. 80IB." In this background, it was held that for ....
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....portive documentary evidence that it is eligible for the claim of deduction u/s. 80IB(10) of the Act and the same is allowable not only on the profit disclosed in the pre-search returns of income filed u/s. 139(1) but also on the entire profit including the one disclosed additionally subsequent to the search proceeding u/s. 132 of the Act and disclosed in the return of income filed u/s. 153A of the Act. Even otherwise based on the rule of consistency if the eligible project undertaken remains the same and the conditions are satisfied and if deduction is allowable in the first assessment year (which is A.Y. 2006-07 in the assessee's case) then the same has to be allowed in the subsequent assessment years. We find that coordinate "D" bench of Tribunal in ITA no. 496/Ahd/2011 A.Y. 2007- 08 in the case of Golden Developers Vs. ITO (OSD), Range-9, Ahmedabad dated 13/11/2014, it was held that in case the appellant is entitled for claim of deduction u/s. 80IB(10) in A.Y.2006-07 then the appellant is also eligible for the said deduction in A.Ys.2007-08 & 2008-09. Following same reasoning, we hold that the assessee on this additional income of Rs. 85,66,228/- for A.Y. 2008-09 is entitle....
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....nd choose approach while interpreting the notings of seized document. In view of above, the CIT (Appeals) has grossly erred in viewing the 'on money' component, as unrecorded in the regular books of accounts which was in fact offered as income during the course of recording of statement u/s. 132(4) of the Act during the course of search proceedings carried out u/s. 132 of the Act will not be entitled to claim of deduction u/s.80IB(10) because same was also disclosed in return of income as per law. As stated in the assessment order, the assessee in view of the provisions of section 139(1) of the Act, has filed his original return for pre-search period. Subsequently, pursuant to a notice U/S.153A of the Act, the assessee has filed a return u/s.153A of the Act. The Assessing Officer has proceeded to make assessment on such Return of Income only. In this return of income, the assessee has shown income as per books of accounts including "On money" receipt recorded in the books of accounts giving effect to the above document seized as a result of search. The return of income filed in pursuance of notice u/s. 153A is the return of income u/s. 139 of the Act only. The said books of....
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....ite in tune with the ratio laid down in the above cases. In view of above, it is settled legal position that even when un-recorded sales and income therefrom are considered while making assessment for the relevant period, the corresponding unaccounted expenditure has to be allowed as held by Hon'ble Gujarat High Court in case of CIT V. Hindustan Marbles Ltd. [2010] 327 ITR 312 (Guj)]. In the same analogy, unrecorded (on-money) income being part of sale consideration, it is eligible for computation of taxable capital gains u/s 54B of the Act. 6.2 In the light of above factual and legal discussion, we are of the view that assessee is entitled for claim of deduction in respect of additional income detected consequent to search is entitled to claim of deduction u/s. 80IB(10) of Act which is part of sale proceeds of flats of the project in question including cost of land totaling to Rs. 2.75 crore detected as result of search. This view is fortified by decision of Hon'ble Gujarat High Court in case of CIT Vs. Suman Paper Boards Ltd. [2009] 221 CTR 781 (Guj), wherein the assessee claimed deduction u/s. 80I or 80IA of the Act in relation to the total undisclosed income of block peri....
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....ted 19/12/2014 by ITAT 'C' Bench, Ahmedabad, wherein ITAT while disposing of the appeal, the Hon'ble Tribunal vide para 12 observed as under:- "12. We find that this Bench of the Tribunal in the case of CIT v. M/s. Shree Padmavati Developers (Supra) has held as under:- "7. We have heard both the sides. We have also perused the impugned statement of Mr. Mahendra Kataria recorded on 27/28.12.2006. In reply to a question, it was categorically stated, quote "(i) Rs. 50,000/- sales proceeds of flat not recorded in books." Unquote. Consequent thereupon, the said amount of Rs. 50 lacs was duly disclosed in the Profit & Loss account drawn on 31.3.2007. In the case of the CIT vs. Suman Paper and Board Ltd. [2009] 314 ITR 119(Guj.) an observation has been made that manufacturing and sale of Board paper and craft paper happened to be the only source of income of the assessee, therefore the amount disclosed consequence upon the search partakes the character of business income and eligible for the deduction u/s. 80IB/80IA of the I.T. Act. In the present case, the assessee has admitted that the impugned amount was part of the sale consideration received in cash at the time of booking of fl....