AI Drafter 
TaxTMI 
TaxTMI 
2016 (9) TMI 1001
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee company is engaged in the business of building and developing real estate. The assessee had developed a housing project named 'Siddhamuni Residential Complex' at Ganeshbaba Nagar, Off Pune Road, Nashik on which deduction u/s. 80IB(10) was claimed. The assessee filed its return of income for the impugned assessment year on 05-08-2008 declaring total income as Nil. The assessee claimed deduction of Rs. 2,01,88,958/- u/s. 80IB(10) of the Act in the aforesaid return of income. Thereafter, the assessee filed revised return of income on 25-10-2008 declaring total income as Nil. However, in the revised return of income the assessee claimed deduction of Rs. 1,91,25,340/- u/s. 80IB(10) of the Act, after claiming set off of losses of earlier years Rs. 10,00,978/- brought forward from assessment year 2007-08. A survey u/s. 133A of the Act was conducted at the business premises of assessee on 09-11-2009. During the course of survey certain papers were impounded which revealed that the assessee had taken Rs. 26,15,085/- over and above the price mentioned in the sale deed in respect of sale of flats in the housing project. The assessee admitted Rs. 19,77,000/- as extra sale consideration....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... u/s. 271(1)(c) before the Commissioner of Income Tax (Appeals) on 26-09-2013. 2.3 The Commissioner of Income Tax (Appeals) dismissed the former appeal of the assessee against levy of penalty Rs. 1,95,248/- u/s. 271(1)(c). The Commissioner of Income Tax (Appeals) while dismissing the appeal of the assessee observed that the Tribunal has enhanced the addition to Rs. 19,77,000/- and the Assessing Officer subsequently passed penalty order on 21-08-2013 in line with the order of Tribunal. The Commissioner of Income Tax (Appeals) dismissed the appeal of the assessee as infructuous. In the latter appeal of the assessee against the levy of penalty Rs. 6,10,893/- u/s. 271(1)(c), the Commissioner of Income Tax (Appeals) confirmed the levy of penalty on merits. Now, the assessee has filed appeal against both the orders of Commissioner of Income Tax (Appeals). ITA No. 1848/PN/2014 3. In appeal the assessee has assailed the order of Commissioner of Income Tax (Appeals)-I, Nashik dated 23-04-2014 on the ground that there cannot be two penalty orders for same offence for the same assessment year. The order levying penalty u/s. 271(1)(c) dated 21-03-2013 was passed by the Assessing Offic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n appeal before the Commissioner of Income Tax (Appeals) against the findings of Assessing Officer for making addition under the head 'Income from other sources'. The Commissioner of Income Tax (Appeals) upheld the findings of Assessing Officer in treating the extra sale consideration as 'Income from other sources'. In second appeal the Tribunal confirmed the findings of authorities below. The ld. AR submitted that it is an undisputed fact that the undisclosed amount of Rs. 19,77,000/- received by assessee is an account of additional work executed by the assessee in certain flats. The ld. AR contended that additional income declared during the course of survey is from the housing project which is eligible for deduction u/s. 80IB(10). Thus, the said additional income is also eligible for deduction u/s. 80IB(10). In support of his contentions the ld. AR placed reliance on the decision of Pune Bench of the Tribunal in the case of Malpani Estates Vs. Assistant Commissioner of Income Tax reported as 164 TTJ 803 (Pune) and Ahmedabad Bench of the Tribunal in the case of Madhav Corporation Vs. ACIT in IT(SS)A Nos. 380 to 382/Ahd/2014 for assessment years 2006-07 to 2008-09 decided on 28-07....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ible to claim deduction u/s. 80IB(10) on the additional income declared i.e. Rs. 19,77,000/-. The ld. DR further contended that the assessee has not filed any appeal against the findings of Commissioner of Income Tax (Appeals) holding extra sale consideration as not eligible for deduction u/s. 80IB(10) of the Act. 6. The ld. AR of the assessee vehemently rebutted the submissions made by the ld. DR with respect to the issue raised by assessee in appeal before the Tribunal challenging the eligibility of additional amount declared for claiming deduction u/s. 80IB(10) of the Act. In support of his submissions the ld. AR referred to para 12 of the order of Tribunal in ITA No. 1135/PN/2011 and ITA No. 1051/PN/2011 (supra). The ld. AR submitted that the document found and seized during survey clearly shows that the additional income declared by the assessee is on account of extra sale consideration or 'on-money' received on sale of flats. In both the events the additional amount declared is eligible for deduction u/s. 80IB(10). The ld. AR reiterated his reliance placed on decision rendered in the case of Malpani Estates Vs. Assistant Commissioner of Income Tax (supra) and the decision ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ible for deduction u/s. 80IB(10). In the said case the assessee was engaged in construction business and was subject to search action u/s. 132 of the Act. In the course of search, one of the partners of the assessee firm in statement recorded u/s. 132(4) admitted certain undisclosed income in relation to housing project developed by the assessee. The assessee disclosed the additional income in its return of income filed in pursuance to notice issued u/s. 153A of the Act. Since, the housing project was eligible for deduction u/s. 80IB(10), the assessee claimed deduction u/s. 80IB(10) of the Act on the additional income declared. The Assessing Officer disallowed the same and held the additional income received as 'on-money' as 'income from other sources'. The Commissioner of Income Tax (Appeals) upheld the action of Assessing Officer. The assessee carried the matter in appeal to the Tribunal. The Tribunal reversed the findings of lower authorities and held the onmoney received by the assessee as 'business income', eligible for deduction u/s. 80IB(10) of the Act. The relevant extract of the findings of the Tribunal are as under : "11. In the course of search, in a statement d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s it may, factually speaking, it cannot be denied that the additional income in question relates to the housing project, 'The Crest' at Pimple Saudagar, Pune undertaken by the assessee. The material seized in the course of search; the deposition made by the assessee's partner during search u/s 132(4) of the Act; and, also the return of income filed in response to notice issued u/s 153A(1)(a) of the Act after the search, clearly show that the source of impugned additional income is the housing project, 'The Crest' at Pimple Saudagar, Pune. The aforesaid material on record depicts that the impugned income is nothing but unaccounted money received by the assessee from customers on account of sale of flats of its housing project, 'The Crest' at Pimple Saudagar, Pune. Clearly, the source of the additional income is the sale of flats in the housing project, 'The Crest'. Therefore, once the source of income is established the assessability thereof has to follow. The nature of income, thus on facts, has to be treated as 'business income' albeit, the same was 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) t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ply to an assessment made u/s 153A of the Act save as otherwise provided in the said section, or in section 153B or section 153C of the Act. In the background of the expression "all other provisions of this Act shall apply" contained in Explanation (i) below section 153A of the Act, and in the context of the controversy before us, the moot point to be examined is as to whether or not deductions enumerated in Chapter VIA of the Act are to be considered in making an assessment made u/s 153A(1)(b) of the Act. Section 153A(1)(b) of the Act requires the Assessing Officer to assess or reassess the 'total income' of the assessment years specified therein. Ostensibly, section 80A(1) of the Act prescribes that in computing the 'total income' of an assessee, there shall be allowed from his 'total income' the deductions specified in Chapter VIA of the Act. The moot point is as to whether the aforestated position prevails in an assessment made u/s 153A(1)(b) or not? In our considered opinion, having regard to the expression "all other provisions of this Act shall apply to the assessment made under this section" in Explanation (i) of section 153A of the Act, it clearly implies that in assessing....
X X X X Extracts X X X X
X X X X Extracts X X X X
....egular 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. 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 accounts are duly audited and supported by the requisite audit report u/s. 80IB in form No. 10CCB dated 25/01/2012. It is an undisputed fact that the business activity of the firm is that of developing the housing projects under the name and style "Madhav Park (Nikol)" and there was no other business activity of assessee as certified by the auditor in the above said report in form No. 10CCB. 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. 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). Similar view has been taken by Hon'ble Bombay High Court in ....