AI Drafter 
TaxTMI 
TaxTMI 
2018 (6) TMI 105
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....een further directed by the Commissioner to initiate penalty proceedings under Section 271(1)(c) of the Act. 2. For better appreciation of the questions involved, it is necessary to briefly advert to the facts of the case. 3. Assessee is a partnership firm run in the name and style M/s.SLV Housing Development Corporation. The partnership firm consists of the assessee - Mr. H.Nagaraja, his wife Smt. Bhagya Nagaraj and his father Mr. Hanumappa as partners. Their business is to purchase agricultural lands, convert them for non-agricultural purpose viz., for formation of a residential layout and thereafter sell them. On 06.01.2009, a search was conducted in the premises of the assessee. Notice under Section 153A of the Act was issued for the assessment year 2008-09 and 2009-10. The assessee filed return of income for the assessment year 2008-09 declaring the total income at Rs. 8,82,13,948/- and for the assessment year 2009-10 at Rs. 3,98,90,396/-. By assessment order dated 28.12.2010, the Assessing Officer made addition of Rs. 2,38,16,700/- in respect of assessment year 2008-09 and as regards assessment year 2009-10, an addition of Rs. 4,25,72,383/- was made by him. 4. The as....
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....itions considering the materials on record which were not considered at time of assessment" 7. Several contentions have been urged on merits. Indeed, Counsel for the respondent has seriously contended that the issue involved in these appeals has been fully covered by the judgment of this Court in the case of DCIT Vs VARMA INDUSTRIAL LTD. - (2001) 250 ITR 472 (KAR) and order dated 17.11.2015 passed in ITA No.699/2009 in the case of SRI SALIL PUNOOSE VS ITO, in as much as, as laid down by this Court, the Revisional Commissioner could not have exercised jurisdiction under Section 263 of the Act to revise the order disallowing the development expenses, labour charges, commission paid and work in progress, as the said items had been considered both by the Assessing Officer as well as the Appellate Commissioner for both the assessment years and the assessment orders had merged with the appellate orders. In fact, based on the aforesaid judgments of this Court and some other authorities cited at the bar, respondent-assessee has filed an application seeking dismissal of the appeals as the matter was fully covered by the pronouncement of this Court. It is in this background, we have heard....
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....sioner could not have conducted an inquiry to take another view. According to them, such approach is not permissible in law as held by this Court in the case of CIT VS M/S. IGATE GLOBAL SOLUTIONS LTD., in ITA No.771/2009 disposed of on 28.11.2014. 10. As regards the third point urged by the Revenue in respect of expenses claimed for payment of commission to agents for purchase and sale of lands, the assessee contends that addresses of agents, details of cheque payments, TDS deductions were placed before the Assessing Officer for scrutiny and based on the said details, the Assessing Officer was satisfied and had dropped further proceedings, and therefore, the Revisional Commissioner was not right and justified in insisting for profiting details for service as the same was not permissible in law. Reliance is placed on the judgment of the Apex Court in the case of CIT VS GREENWORLD CORPORATION - (2009) 314 ITR 81 (SC), CIT VS M/S. IGATE GLOBAL SOLUTIONS LTD., in ITA No.771/2009 disposed of on 28.11.2014, and CIT VS SAP LABS PVT. LTD. in ITA No.842/2008 disposed of on 25.08.2014. 11. We have heard the learned Counsel for both parties at length. 12. Regarding first point urged ....
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....he expenses incurred. The additional income admitted by the assessee in respect of unsubstantiated development expenses have been accepted after examining the details filed by the assessee and the details available on records. The amounts of Rs. 50 lakhs and Rs. 2,00,00,000/- admitted by the assessee for the assessment years 2008- 09 and 2009-10 have been treated as assessee's undisclosed income for the relevant assessment years and brought to tax accordingly. This amount of Rs. 2 crore of undisclosed income is in addition to the amount of Rs. 1,92,72,383/- (as discussed in para 6 above) treated as assessee's undisclosed profit received from the transactions with M/s Brigade Enterprises for the assessment year under consideration (Add.Rs.2,00,00,000/-)." 15. In the two appeals preferred by the assessee challenging the orders passed by the Assessing Officer for both the assessment years before the Commissioner for Income Tax, the assessee urged that there was non- consideration of addresses of parties, PAN numbers, bills and vouchers in support of development expenses. The Appellate Commissioner in his order, under the head development expenses and unexplained investment has proc....
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.... At the time of appellant hearing, the appellant's arguments for relief on this issue were not strong and the appellant had only stated that this amount of inflated expenses, if confirmed, shall be set off against the other addition being unexplained cash added by the A.O. In view off against the other addition being unexplained cash added by the A.O. In view of the same, and in view of the appellant's own admission which is quoted by the A.O. in para 7.0 to 7.5 wherein they had offered Rs. 2,00,00,000/- over and above the income declared in the return of income, this addition is confirmed. However, the setting off of this amount against the unexplained cash is separately considered." 18. The question now is, whether the Commissioner of Income Tax (Appeals) exercising jurisdiction under Section 263 of the Act, could re-consider the claim of development expenses which had been considered by the Assessing Officer and concluded by the Appellate Commissioner after re-consideration. The Revisional Authority holds that labour charges, work in progress, etc., should be disallowed. In our view, when the development expenses as considered by the Assessing Officer were the subject matter ....
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....counted for during the various assessment years. When the Assessing Officer scrutinized the returns for the assessment years 2008-09 and 2009-10, he considered the purchase of lands from villagers and thereafter sale of the same to M/s. Brigade Enterprises. He has dealt with the same in paragraphs 5.2 to 5.6 of the assessment order and has proceeded to arrive at a conclusion that for assessment year 2008-09, there was unexplained income of Rs. 1,25,66,700/- and for the assessment year 2009-1-0, there was unexplained income in a sum of Rs. 1,92,72,383/-. He has thus proceeded to treat these to items as undisclosed profit for the respective assessment years. 20. The assessee challenged this order by filing appeal before the Appellate Commissioner. The Appellate Authority considered both the appeals and in his order dated 28.03.2013, has held after examining the legality and correctness of the order passed by the Assessing Officer that addition made by the Assessing Officer regarding unexplained income was not justified in view of the evidence furnished by the assessee. Hence, the Appellate Commissioner ordered for deletion of the additions made by the Assessing Officer, as a resul....
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....dresses and PAN numbers had been produced. The Commissioner exercised his jurisdiction under Section 263 of the Act to hold that mere furnishing names, addresses, PAN numbers, cheque payment details to the agents for purchase of agricultural lands at Kaggalipura, and thereafter registration of sale deeds after converting and developing into residential sites would not be sufficient evidence for laying claim of expenses under Section 37 of the Act. He has proceeded to hold that assessee had to establish the actual service rendered by each of these agents in the purchase and sale of lands, and therefore, disallowed the claim of the assessee in respect of expenses towards commission. 23. The assessee challenged the order passed by the Revisional Authority before the Tribunal. The Tribunal has found that the assessee had furnished details of the names, addresses, cheque payment details and TDS deduction towards commission. The assessee challenged the order passed by the Revisional Authority before the Tribunal. The Tribunal has found that the assessee had furnished the details of the names, addresses, cheque payments and TDS deduction towards commission; the Assessing Officer took i....