TaxTMI 
TaxTMI 
2018 (12) TMI 452
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....ed on the merits though the learned Assessing Officer on the earlier occasion vide order dated May 30, 2012 passed under section 143(3) read with section 147 of the Act had granted deduction on the very same issue after due consideration. (ii) The learned Assessing Officer in his order passed under section 153A of the Act read with section 143(3) of the Act dated March 31, 2016 has further erred by adjudicating the issue with respect to the claim of deduction under section 54F of the Act when on the very same issue proceedings under section 263 of the Act was initiated and pending on the date of search which cannot be abated under section 153A of the Act. 3. The brief facts of the case are that the assessee is an individual on whose premises a search and seizure operation under section 132 of the Act was carried out on February 18, 2014. During the course of search, it was noticed by the Revenue that the assessee had sold shares of M/s. BGR Energy Systems Limited held by her for a total consideration of Rs. 111,07,20,000. The assessee had computed her long-term capital gain after indexation and deduction of expenditure as Rs. 103,54,38,656. Further the assessee had inve....
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....eterminative factor of legis lative intent." (iv) CIT v. St. Francis Clay Decor Tiles reported in [2016] 385 ITR 624 (Ker) and CIT v. Promy Kuriakose reported in [2016] 386 ITR 597 (Ker) wherein it was held that even in the absence of search material proceed ings under section 153C of the Act can be initiated and the assessee is bound to file return in the scheme of the provision. (v) Canara Housing Developing Company v. Deputy CIT reported in [2015] 274 CTR 122 (Karn) wherein it was held by the hon'ble High Court of Karnataka that the order under section 263 of the Act is infructuous in case where section 153A proceedings are pending. 4. For the sake of convenience, the sequences of events are narrated herein below for easy reference : (i) The assessee had filed her return of income under section 139(1) of the Act for the assessment year 2008-09 on July 30, 2008 declaring a total income of Rs. 36,00,774. The assessee had also declared a long-term capital gain on sale of shares held by her as Rs. 103,54,38,656 and long-term capital loss on sale of other shares Rs. 26,59,929 and claimed deduction, under section 54F of the Act for Rs. 47,44,95,882 an....
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.... passed under section 143(3) read with sections 147 and 148 of the Act. 5. Before us the learned authorised representative narrating the above sequence of events argued by stating that the learned Assessing Officer in his order passed under section 143(3) read with section 153A of the Act dated March 31, 2016 has ventured in the issue with respect to the claim of deduction under section 54F of the Act when there was no incriminating material found during the course of the search or requisition of documents. Reliance was placed on the decision of the hon'ble Rajasthan High Court in the case Jai Steels (India) Jodhpur Ltd. v. Joint CIT (2014) in I. T. A. No. 53 of 2011. The learned authorised representative further submitted that on the very same issue the learned Commissioner of Income-tax had initiated proceedings under section 263 of the Act and thereafter search was conducted on the business premises and residence of the assessee and notice under section 153A of the Act was issued. In such circumstances, the Memorandum of Explanation issued by the Central Board of Direct Taxes vide Circular No. 7 of 2003 dated September 5, 2003 in paragraph No. 65 reported in 263 ITR 107 (....
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....assessment under section 143(3) read with sections 147 and 148 of the Act was completed on May 30, 2012 and the claim of deduction under section 54F of the Act was allowed after due consideration. The gist of the decision is extracted hereinbelow for reference : "3. On scrutiny it is found that the assessee sold her shares of BGR Energy Systems Limited in ITP (23,14,000 shares at Rs. 480 each) for a total sale consideration of Rs. 111.07 crores. The long-term capital gain for the year is returned by the assessee as follows : Total consideration received : Rs. 111,07,20,000 Long-term capital gains on the sale of BGR shares : Rs. 103,54,38,656 Less : long term capital loss on sale of other shares : Rs. 26,59,929 Rs. 103,27,78,727 Less : amount invested in Mahabalipuram property : Rs. 47,44,05.882 Less : amount invested in capital gains account scheme : Rs. 55,82,82,845 Net capital gain offered to tax during the year : Rs. Nil 4. The main issue involved in the above claim of the assessee is that the assessee has bought 43.56 acres of the land at Mahabalipu ram for Rs. 47,44,95,882 and constructed a....
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....ar No. 7 of 2003 dated September 5, 2003 in paragraph No. 65.5 states as follows (see [2003] 263 ITR (St.) 61, 107) : "65.5 The Assessing Officer shall assess or reassess the total income of each of these six assessment years. Assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under section 132 or requisition under section 132A, as the case may be, shall abate. It is clarified that the appeal, revision or rectification proceedings pending on the date of initiation of search under section 132 or requisition shall not abate. Save as otherwise provided in the proposed section 153A, section 153B and section 153C, all other provisions of this Act shall apply to the assessment or reassessment made under section 153A. It is also clarified that assess ment or reassessment made under section 153A shall be subject to interest, penalty and prosecution, if applicable. In the assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year." 6.1 Since it is c....
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....sessment year 1975-76, the assessee sold his property situated at Thiruvanmiyur for a sum of Rs. 2,70,000. The extent of the property is 10 grounds and 29 square feet The building occupies an area of 4,500 square feet. There is a pathway leading from the main road to the building. The pathway occupies an area of 6,750 sqaure feet. There are sit outs, servant quarters, cow sheds etc. Apart from the area occupied by the main building, pathway, sit out, servant quarters and cow sheds etc. there is vacant land. The above said constructions are scattered over the area of 10 grounds and 29 square ft. Therefore, it cannot be said that apart from the main building in which the assessee is residing, the assessee is not using or utilising the rest of the open ground. The Income-tax Officer relied upon the Urban Land Ceiling Act and considered that two grounds and 580 square feet. would form appurtenant to the main building and the rest of the land would be considered as separate unit. Accordingly he bifurcated the sale consideration of Rs. 2,70,000 into Rs. 1,10,000 for the value of the building and appurtenant land and the balance of Rs. 1,69,000 was taken as sale price relating to the valu....
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.... (ii) Asst. CIT v. Kores (India) Ltd. in I. T. A. No. 5074/Mum/2009 vide order dated September 9, 2010, wherein it was held that once an issue is settled in the assessment prior to search, the same item cannot be revis ited in the assessment under section 153A of the Act because only a pend ing assessment shall abate on initiation of search and not a concluded assessment. (iii) Asst. CIT v. Mrs. Uttara S. Shorewala (2011) in I. T. A. Nos. 5506 and 5507/Mum/2009 wherein it was held that once an assessment has been concluded and addition has been deleted, the Department cannot re-agitate the same issue in an assessment under section 153A of the Act. 6.3 To sum up, in the case of the assessee, action under section 263 of the Act was initiated and dropped stating it to be infructuous since proceedings were initiated under section 153A of the Act. It is obvious from the clarification made by the Central Board of Direct Taxes that revision or rectification proceedings pending on the date of initiation of search under section 132 of the Act shall not abate. Therefore in the proceedings under section 153A of the Act, the issues racked up in the proceedings under section....