TaxTMI 
TaxTMI 
TaxTMI 
2018 (4) TMI 558
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....se, the Ld. CIT-25 has erred in facts and in law in directing the Assessing Officer to consider the entire onmoney of Rs. 1,65,62,330/- as income of the assessee as against Rs. 60,31,047/- assessed by the Assessing Officer as additional income out of the on-money component. 3. At the outset, it was noted that there was a delay of four days in filing the appeal. The reasonable cause for the delay has been attributed to be misplacement of the document in the office. 4. Upon hearing both counsel and perusing the records, we are inclined to condone the delay in filing the appeal and the same is condoned as such. 5. In this case, the show cause notice u/s. 263 of the Act was issued by the ld. Commissioner of Income Tax (Appeals) which reads as under: 2 The original return of income in this case for A. Y. 2004-05 was died on 01-11-2004 declaring total income of Rs. 3.31.391/:. The return was processed under section 143(1) of the income Tax Act, 1961 3. The assessing officer completed She assessment u/s. 143(3) r.w.s 147 determining total income of Rs. 63,62,840/- on 28-11-2011 intot-alia waking addition of Rs. 60,31,047/- which was disclosed by the assessee before the Settlement C....
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....45E of I. T. Act for accepting the disclosed additional income On the basis of the disclosure before the Settlement Commission, the Assessing Officer initiated proceeding u/s 147 of f T. Act for reassessment of income for A.Y. 2004-05 and issued notice u/s 148 of IT Act on 17.03.2011. During the course of reassessment proceeding, the assessee offered the same amount of additional income of Rs. 60.31,047/-, which was declared before the Settlement Commission Vide reassessment order u/s 143(3) /147 of I.T, Act dated 28,11.2011, the Assessing Officer has accepted this additional income of Rs. 60.31.047/- and has completed the reassessment determining the total! income at Rs. 63,62,840/-. The assessee begs to submit that there is no case for invoking the provision of 263 of I. T. Act in the facts and circumstances of these case, because of the following reasons'- i. in this case although the on-money component was calculated at Rs. 1,65,62,330/-. the net profit was calculated @ 12% of total sale proceeds of Rs. 4,96,86,990/- including the disclosed agreement value of Rs. 3,31,24,660/- and on-money component of Rs. 1,65,62,330/-. The net profit @ 12% of total sale value was calcul....
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....rious case laws. However, the ld. Commissioner of Income Tax was not convinced. He held as under: 5. I have carefully considered the reply filed by the assessee and gone through the assessment records of the assesses it is an admitted fact that the assessee had received on-money of Rs. 1,65,62,330/- during the year winch has also disclosed before the Settlement Commission u/s, 245E of the IT Act 1961 The Assessing Officer during the assessment proceedings has not verified the correctness and adequacy of income disclosed before the Settlement Commission. The authenticity of the 'income declared by the assessee has also not been examined by the Assessing Officer in the assessment order passed u/s. 143(3) r.w s. 147 of the I T. Act, 1961 on 28-11-201 1. Thus, the order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of revenue as the entire onmoney received was the income of the assessee which it has failed to disclose in the return of income and the Assessing Officer has accepted only 12% of turnover as undisclosed income without making necessary enquiry and without referring the impounded material during survey. 5.1 The assessee ha....
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.... 1,65,62,330/- disclosed by the assessee before the Settlement Commission. 5.3 The assessee has further pointed out that the order passed by me T is not erroneous as the same has been passed on the basis of the Hon'ble Settlement Commission in the Assessment Year 2005-the assessee and it may be prejudicial to the interest of revenue but conditions are fulfilled section 263 cannot be invoked by the Commissioner of Income tax. This contentions of the assessee is not acceptable as the order of the Assessing Officer was not only erroneous but prejudicial to the interest of the revenue also as nothing has been brought on record and discussed in the assessment order while accepting the undisclosed income at Rs. 6031047/- against the on-money received at Rs. 1,65,62,330/- The assessee has further cited case law of CIT Vs. Gabriel India Ltd., 203 ITR 108 (Bom) in which the Assessing Officer had made enquires in regard to nature of expenditure incurred by the assessee in which the assessee had given detailed explanation with regard of the expenditure in writing and being satisfied by the explanation of the assessee. The Assessing Officer had accepted the expenditure as genuine. The Ho....
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....ment Commission's order. Furthermore, the ld. Departmental Representative submitted that there cannot be any such presumption on this account also due to the fact that the percentage accepted by the Settlement Commission for the assessment year 2005-06 was different from the percentage offered for this year. Hence, he submitted that the Assessing Officer's order is even not in accordance with the Settlement Commission order for the assessment year 2005-06. As regards the ITAT decision, in group cases on merits, the ld. Departmental Representative submitted that these are to be considered when the merits are being considered and not when the revision u/s.263 is in challenge, where the ld. Commissioner of Income Tax (Appeals) has asked the Assessing Officer to examine the issue afresh after affording a reasonable opportunity of being heard to the assessee. 11. We have carefully considered the submissions and perused the records. We note that identical sum as offered for taxation before the Assessing Officer was offered before the Settlement Commission. But the assessee did not press the matter before the Settlement Commission. Hence, the Settlement Commission did not make any order ....
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....ed amount of Rs. 60,31,047/- for taxation which is declared before the Settlement Commission u/s.245E of the Act. Penalty proceedings u/s.271(1)(c) of the Act are initiated separately for furnishing inaccurate particulars of income and concealing the particulars of its income. 8. Subject to the above remarks, the total income is computed as under: (Rs.) (Rs.) Total Income (as per Return of Income) 3,31,391 Add : Disallowance (as above): i) Income from undisclosed sources 60,31,047 Total Income : 63,62,840 Rounded off to 63,62,840 14. From the above, it is apparent that the Assessing Officer has not done any enquiry whatsoever. There is no material on record to show that the settlement commission's order was there before him. The Assessing Officer has not enquired as to how the sum of Rs. 60,31,047/- was offered as against the larger amount offered at the time of survey. Moreover, as rightly been pointed out by the ld. Departmental Representative, for assessment year 2005-06, the Settlement Commission has accepted the plea that income out of on-money, should be considered @ 20.14% which is totally different from ....