TaxTMI 
TaxTMI 
2016 (8) TMI 208
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....ompleted u/s. 153A r.w.s. 143(3) of the A ct. 2. The action of the learned CIT (A) is contrary to the procedure contemplated by the CBDT. 3. The learned Commissioner of Income Tax(Appeals) ought to have held the notice issued u/s. 153A of the Act, is illegal since return is called without granting statute recognised period for compliance and there is no reasons either recorded or communicated to know how the learned Assessing authority has exercised his discretion for compliance to the notice u/s. 1534A of the Act. 4. The appellant respectfully submits a period of clear 30 days to 45 days was considered reasonable for compliances with regard to filing of return in response to notices. 5. The learned Commissioner of Income Tax (Appeals) ought to have held the notice issued u / s . 143(2) of the Act, relates to the original return filed u/ s. 139 of the Act and not to the proceedings initiated u/s 153A of the Act, since the learned Assessing Authority has considered the income returned in the original return. 6. The learned Commissioner of Income Tax (Appeals) erred in holding the sum of Rs.ll,97,996/- the income earned on sale of Agri.Lan....
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....fore there is no error or illegality in the order of the assessment. 6. We have considered the rival submissions as well as the relevant material on record. The assessee has challenged the validity of assessment order passed under Section 153A on the ground that the assessee was not given an opportunity of hearing prior to grant of approval by the Joint Commissioner for framing the assessment under Section 153A of the Act. The learned Authorised Representative has placed reliance on the provisions of section 153D of the Act as well as the decision in the case of Akhil Ghulamali Somji Vs. ITO (supra). For ready reference we quote the Sectin153D as under : "153D. No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of sub-section (1) of section 153A or the assessment year referred to in clause (b) of sub- section (1) of section 153B, except with the prior approval of the Joint Commissioner: Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by t....
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....he draft order without forwarding the same to the Inspecting Assistant Commissioner along with the objections and without obtaining the directions of the Inspecting Assistant Commissioner. An assessment made by the Income-tax Officer in violation of the provisions of section 144B of the Act would be an assessment without jurisdiction. In the instant case, the admitted position is that on receipt of the draft order of assessment, the assessee did file objections and the Income-tax Officer completed the assessment himself on the basis of the draft order without forwarding the draft order and the objections to the Inspecting Assistant Commissioner and obtaining directions from him. Such an order, on the face of it, is beyond the powers of the Income-tax Officer under section 143 read with section 144B of the Act and, hence, without jurisdiction. The Tribunal, in our opinion, was, therefore, justified in its conclusion that the assessment was liable to be annulled. It was right in holding that the assessment order passed by the Income- tax Officer the instant case without reference to the Inspecting Assistant Commissioner had rightly been annulled by the Commissioner of Income-tax (App....
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....scribed for filing the return shall not be less than 15 days but not more than 45 days. Therefore the notice issued under Section 153A of the Act is invalid as the assessee was not given the minimum period of 15 days and further when there is no reason recorded by the Assessing Officer for providing the period less than 30 days renders the notice issued under Section 153A of the Act is invalid and consequently the assessment is liable to be quashed. 9. On the other hand, the learned Departmental Representative has submitted that there is no such minimum time period is provided under Section 153A rather the return of income is required to be filed within a period as provided in the notice itself issued under Section 153A of the Act. He has referred to the provisions of section 153A and submitted that the provisions itself is simple and clear and therefore no such condition can be imported in the provision when nothing is provided of giving the minimum period of 15 days for filing the return of income. He has further contended that even otherwise the assessee has filed the return of income after about 5 months from the date of notice issued under Section 153A of the Act which was ....
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....otice under Section 153A(1)(a) was issued on 24.9.2009 wherein the Assessing Officer has given time period for furnishing the return as 30 days from the date of service of notice. Even otherwise the period of 30 days provided by the Assessing Officer for furnishing the return of income is a reasonable period. Further the assessee furnished its return of income in response to the said notice under Section 153A only on 3.2.2010 which is more than 4 months after the date of issue of notice under Section 153A. In view of the facts and circumstances when the Assessing Officer has granted 30 days to furnish the return in response to the notice under Section 153A and thereafter the assessee furnished the return only after more than 4 months which was accepted by the Assessing Officer, the objection raised by the assessee is devoid of any merit or substance and therefore rejected. 11. Ground No.5 is regarding invalid notice issued under Section 143(2) of the Act. 12. The learned Authorised Representative of the assessee has submitted that the Assessing Officer issued a notice under Section 143(2) after filing the return in response to notice under Section 153A of the Act however, the....
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....sued under Section 143(2) was in relation to the original return when the time period for issuing notice was already expired. Therefore there cannot be any correlation between the total income computation and notice issued under Section 143(2) so claimed by the assessee. The Assessing Officer has discussed this issue in para 6 and pointed out that in the return filed in response to the notice under Section 153A the assessee has declared les income than income declared in the original return filed under Section 139 of the Act and therefore the Assessing Officer took the total income returned by the assessee as declared in the original return while computing the total income. When the notice under Section 143(2) was issued after the return of income filed by the assessee in response to notice under Section 153A and further there was no time available to the Assessing Officer to issue notice on the original return of income then in the facts and circumstances of the case we find that the notice in question was issued only in respect of the return filed by the assessee under Section 153A of the Act. Hence this ground of the assessee is rejected. 15. Ground Nos.6 to 8 are regarding t....
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....139 and submitted that the original return was filed on 29.10.2005 and therefore the time limit for issuing notice under Section 143(2) was already expired on the date of search on 13.2.2009. Hence the assessment was not abated and in the absence of any fresh material, no addition can be made by the Assessing Officer. He has relied upon the decision dt.15.6.2014 of Delhi Bench of this Tribunal in the case of Sanjay Agarwal in ITA No.3184/Del/2013 and submitted that the scope of determining the total income in the reassessment famed under Section 153A is only addition of amounts those flow from the incriminating material found during the course of search. 17. On the other hand, the learned Departmental Representative has submitted that the assessee has claimed the exemption under Section 54B in the return filed in response to the notice issued under Section 153A therefore this is a fresh claim made by the assessee in the return filed under Section 153A and further the assessee has offered himself as income of STCG from sale of agriculture land. He has relied upon the orders of the authorities below and submitted that when the assessee has shown this property in question as busine....
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.... notices. 5. The learned Commissioner of Income Tax (Appeals) ought to have held the notice issued vi] s 143(2) of the Act, relates to the original return flied u/ s. 139 of the Act and not to the proceedings initiated u / s . 153A of the Act, since the learned Assessing Authority has considered the income returned in the original return. 6. The learned Commissioner of Income Tax (Appeals) erred in upholding the adoption of income under head "POOJA" at Rs. 35,00,000/- as against Rs. 3,22,553/-admitted by appellant, rejecting the appellant's contention that the offer is Gross receipt and not net income. 7. The Learned Commissioner of Income Tax (Appeals) erred in holding the loan from Mr. Sunil Patil is assessable as unexplained Credit for the assessment year 2006-07. 8. The learned Commissioner of' Income tax (Appeals) ought to have deleted the addition made on account of Cash Credit since the said transaction was considered while framing the assessment ujs.143(3) of the Act made on 21- 11-2008 and there is no material to suggest that the loan is not genuine. 9. The learned Commissioner of Income Tax (Appeals) ought to have held ....
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....he total income from Pooja for three assessment years at Rs. 75 lakhs. Vide letter dt.6.4.2009 the assessee retracted his admitted income from Pooja and submitted that the actual income from Pooja is only Rs. 10,12,800 on the gross receipts of Rs. 50,64,000 for the Assessment Years 2006-07 to 2008-09. Hence the assessee retracted its earlier statement recorded on 13.2.2009. The Assessing Officer again recorded the statement of assessee on 13.4.2009 wherein the assessee has took a stand that after reducing the expenses from the admitted Pooja income for the Assessment Year 2006-07 is only of Rs. 18,29,800. The Assessing Officer did not accept the contention of the assessee and made the addition of Rs. 35,00,000 as disclosed by the assessee in the statement recorded on 23.2.2009. The assessee challenged the action of the Assessing Officer before the CIT (Appeals) but could not succeed. 25. Before us, the learned Authorised Representative of the assessee has submitted that the original return under Section 143(3) was concluded and therefore, in the absence of any incriminating material, no addition can be made on the basis of the statement recorded during the search. He has further....
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....(4) of the Act. It is pertinent to note that the assessee in the statement had estimated the undisclosed income of Rs. 75 lakhs for 3 assessment years under consideration which matches the figures and amounts shown in the seized document relating to Pooja income of Rs. 35 lakhs, Rs. 20 lakhs and Rs. 20 lakhs for the Assessment Year 2006-07 to 2008-09 respectively. We find that there is no ambiguity in the statement of assessee regarding the Pooja income which has been clearly corroborated by the seized material. Thus when there is a sufficient evidence being seized material which corroborates the statement of the assessee recorded under Section 132(4) on 23.2.2009 then the subsequent retraction of the statement by the assessee withut any corroborating evidence cannot be accepted as the assessee has not explained the facts and circumstances under which he had admitted a wrong income in the statement and how the income shown in the seized material is not correct. Therefore mere retraction of statement without explaining the circumstances as well as corroborating evidence, it cannot be accepted being an after thought. Accordingly, we do not find any substance in this ground of the ass....
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....Assessing Officer accepted the credit in the name of Mr. Sunil Patil of Rs. 42 lakhs and there is no evidence or seized material found during the search to support the undisclosed income. However from the record produced before us, we find that the assessee has filed a return of income on 3.2.2010 along with the Balance Sheet wherein this amount of unsecured loan in the name of Mr. Sunil Patil has been shown and it is not clear whether this record was filed by the assessee along with the return of income filed on 24.11.2006 on which the assessment was completed for the year under consideration. Accordingly, we direct the Assessing Officer to verify whether this unsecured loan in the name of Mr. Sunil Patil was duly disclosed in the return filed on 24.11.2006 or during the assessment proceedings completed vide order dt.21.11.2008. This issue is set aside to the record of Assessing Officer for proper verification and re- adjudication. 33. For the Assessment Year 2007-08, the assessee has raised the following grounds : " 1. The learned Commissioner of income Tax (appeals) erred in holding that non issue of an opportunity of being heard by the Additional Commissioner before....
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....provisions of section 69B of the Act. 11. The Learned CIT(A) ought to considered the repayment of loan to Mr. Sunil Patil as available for set of, having held the loan borrowed from Mr. Sunil Patil is not genuine. 12. The learned Commissioner of Income tax (Appeals) erred in upholding the levy of interest u / s . 234 B as consequential. The appellant crave leave of the Hon'ble Tribunal to raise such other ground or grounds at the time of hearing." 34. Ground Nos.1 & 2 are regarding validity of assessment under Section 153A on the ground of non-grant of opportunity of hearing to the assessee for granting approval by the Joint Commissioner. This issue is identical to the issue involved in Ground Nos.1 & 2 of the Assessment Year 2005-06. In view of our finding on this issue for the Assessment Year 2005-06, these grounds of the assessee's appeal stand dismissed. 35. Ground Nos.3 & 4 are regarding the validity of notice issued under Section 153A on the ground that the assessee was not given a clear 30 days notice. This issue is identical to the issue involved in Ground Nos.1 & 2 of the Assessment Year 2005-06. In view of our finding on this issue for....
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....essing Officer took the figures from the ledger account however, the assessee claimed that the amount was not claimed as a business expenditure therefore it cannot be disallowed. Further the assessee also claimed that this is a double addition of the same amount of Rs. 3 lakhs in the name of Smt. Vani Mahesh as the Assessing Officer has made an addition on additional investment under Section 69B of Rs. 3 lakhs. Since the relevant record has not been examined by the Assessing Officer and also not available before us therefore in the facts and circumstances of the case, we set aside this issue to the record of Assessing Officer for proper examination of the relevant record as well as the details to be filed by the assessee and then decide the same after affording an opportunity of hearing to the assessee. 44. The assessee has also raised an additional ground which reads as under : "1. The learned CIT (Appeals) erred in holding that the addition of Rs. 39,00,000 has been made on seized material and payments have been made to Mr. Hiren Kumar Patel. Order of the learned CIT (Appeals) is opposed to law." 45. We have heard the learned Authorised Representative as well as le....
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....Representative has submitted that the payments made during the year under consideration were only Rs. 82.50 lakhs and the same is recorded in the books of account. There is no material on record to say that the assessee has taken the said sum of Rs. 58 lakhs from Mr. Hirenkumar Patel. The learned Authorised Representative has further submitted that it is only an allegation and assumption of the Assessing Officer and not a real transaction of payment made by the assessee. 48. On the other hand, the learned Departmental Representative has submitted that the Assessing Officer has analysed the entries at page No.75 of the seized material as reproduced by the Assessing Officer at page 30 of the assessment order from which it is clear that the assessee has paid a sum of Rs. 18 lkahs on 7.8.2006 and again paid Rs. 1 lakh on 18.8.2006, total amounting to Rs. 19 lakhs which has been written in the margin as a figure of 19. Therefore the remaining amount written in the margin in the abbreviated form represents the amounts in lakhs and not in thousands as claimed by the assessee. He has relied upon the orders of the authorities below. 49. We have considered the rival submissions as well....
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.... " 1. The learned Commissioner of income Tax (appeals) erred in holding that non issue of an opportunity of being heard by the Additional Commissioner before approving an order of assessment u/s 153A r.w.s. 143(3) of the Act will not vitiate assessment proceedings completed u/s 153A r.w.s. 143(3) of the act. 2. The action of the learned CIT (A) is contrary to the procedure contemplatedby the CBDT. 3. The learned Commissioner of Income Tax(Appeals) ought to have held the notice issued u/s 153A of the Act, is illegal since return is called without granting statute recognised period for compliance and there is no reasons either recorded or communicated to know how the learned Assessing authority has exercised his discretion for compliance to the notice u / s 1534A of the Act. 4. The appellant respectfully submits a period of clear 30 days to 45 days was considered reasonable for compliances with regard to filing of return in response to notices. 5. The ld. Commissioner of Income Tax (Appeals) ought to have held the notice issued u/s 143(2) of the Act, relates to the original return filed u/s 139 of the Act and not to the proceedings initiated u/s ....
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.... for Rs. 33 lakhs as per the sale agreement dt.13.2.2009. The document was impounded during the search and seizure action. However the sale consideration is shown only at Rs. 15 lakhs. In the statement recorded under Section 132(4) on 13.4.2009, the assessee stated that the Flat was in incomplete state and the owners did not complete the construction and because of this he paid to the owner only Rs. 15 lakhs and he himself spent Rs. 18 lakhs for completion work. However he has accounted only Rs. 3 lakhs out of the above additional work and the balance of Rs. 15 lakhs was spent out of his unaccounted income. Thus the assessee admitted the unaccounted income of Rs. 15 lakhs being investment in the Flat. The Assessing Officer accordingly made an addition of the said amount of Rs. 15 lakhs under Section 69B of the Act. The assessee challenged the action of the Assessing Officer before the CIT (Appeals) but could not succeed. 53. Before us, the learned Authorised Representative of the assessee has submitted that when there is an addition on account of Pooja income of Rs. 20 lakhs then the benefit of telescoping against the addition of unexplained investment could have been given. ....
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....hen it is only a capital asset and sale of its results in capital gain and not business income. 59. On the other hand, the learned D. R. has submitted that the assessee has claimed the interest expenditure against the business income and has not capitalized the same in the cost of the asset and therefore it was a business asset. He has relied upon the orders of the authorities below. 60. We have considered the rival submissions as well as the relevant material on record. There is no dispute that this land was purchased in the year 2004 and was sold in the year 2007 therefore the assessee retained this land for more than 3 years. It is not the case of the revenue that the land was shown as stock in trade. Therefore even if the land was shown as business asset and it was sold prior to the completion of construction work. It would not partake the character of business undertaking or asset on which depreciation is allowed. Therefore this land was sold as an individual asset and not as a particular unit of business of the assessee. Accordingly, we are of the view that the gain arisen from the sale of land will be assessed as 'Long Term Capital Gain' (LTCG). However if any gain is ....
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....assessee has submitted that the Assessing Officer has already made an addition of Rs. 2,22,444 under Section 41(1) being the amount standing to the credit as on 31.3.2006. Therefore this amount of Rs. 22,444 has already been added as income for the Assessment Year 2006-07 and a such no further separate addition is called for. 68. On the other hand, the learned Departmental Representative has relied upon the orders of the authorities below. 69. Having considered the rival submission as well as relevant record, we are of the view that if this amount of Rs. 22,444 is part of sum of Rs. 2,22,444 being an addition made by the Assessing Officer under Section 41(1) of the Act for the Assessment Year 2006-07 then this addition cannot be made for the year under consideration. Hence, we direct the Assessing Officer to verify the fact as pointed out by the assessee and then decide the same accordingly. 70. For the Assessment Year 2009-10, the assessee has raised the following grounds : " 1. The learned Commissioner of Income Tax (Appeals) erred in upholding the adoption of income under head "POOJA" Rs. 30,00,000j- as against RsA,09,165j- admitted by the appellant, rejecting ....
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.... or illegality in the orders of the authorities below. 74. Ground No.5 is regarding the setting off of the income estimated by the Assessing Officer on percentage completion method for the Assessment Year 2008-09 against the income offered during the year on completion of the project. 75. We have heard the learned Authorised Representative as well as learned Departmental Representative and considered the relevant material on record. While dealing with an identical issue for the Assessment Year 2008-09, we have directed the Assessing Officer to set off the income assessed in the said assessment year based on the percentage of uncompleted project against the income of the project offered by the assessee on completion during the year under consideration. Accordingly this ground stand disposed off. 76. The assessee has raised an additional ground which reads as under : "1. The learned CIT (Appeals) erred in holding that the deposits inthenames of the family members of the appellant are assessable in the hands of the appellant for the Assessment Year 2009-10. Order of the learned CIT (Appeals) is opposed to law." Though this issue was raised by the assessee before t....