TaxTMI 
TaxTMI 
2019 (9) TMI 296
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....-143, Shivaji Nagar, Nevta, Jaipur ignoring the following facts: (ii) That Rs. 13,73,372/- is the value adopted by Sub- registrar for re-allotment of both the plots to the assessee herself through JDA (Jaipur Development Authority) that too at nominal registration charges for the reason that both these plots were already owned by the assessee but as per prescribed procedure, she had to surrender them in favour of JDA for conversion in urban/residential plots. (iii) During the course of action u/s. 132 of IT Act at the residence of assessee and other relatives, no incriminating material or other documents evidencing any payment over and above the purchase price of both the society plots was found and therefore there was no justification in sustaining the addition; (iv) That the both the above referred plots of Society were sold after conversion for Rs. 3,75,000 each on 06.10.2016 (DLC rate Rs. 3,18,825/- for each plot of land). (v) That without prejudice to above sub-grounds, ld. CIT (A) was not justified in not allowing benefit under section 48 of IT Act on account of cost inflation." 4. Rival contentions have been heard and record perused. Fa....
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.... the purpose of taxability of this undisclosed investment, the registered value of these plots as per the JDA patta and the Sub-Registrar, Jaipur-IV, needs to be taken. Just as in the case of other assesses of the Tomar family, even in the case of the assessee, the said property appeared for the first time in the balance sheet of AY 2013-14. Also, it was found that the assessee got married to Shri Anurag Tomar later than 1997, whereas she claimed the purchase of plot nos. B-142 and B-143, just adjacent to plot nos. B-140 and B-141 of Shri Anurag Tomar, way back in 1997. 5. After referring various enquiries made with reference to the Pattas of plot No. B-142 and B-143, the A.O. observed as under: "The registered value of Rs. 6,86,686/- of plot no. B-142 and Rs. 6,86,686/-of plot no. B-143 is being taken for the reason that the purchase cost has been claimed by the assessee at a miniscule Rs. 20,116/- and Rs. 18,855/- for plot nos. B-142 and 143 respectively. There is no way in which it can be ascertained that only this cost was paid by the assessee for the purchase of the said plots. It was only to deflate the purchase cost of this plot that the assessee obtained the bac....
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.... fixed by JDA for re-allotment of the same plots in assessee's name, through Sub-registrar in March 2014 at nominal registration amount) was made/sustained by both lower authorities as unexplained payments by assessee in purchasing both plots in A.Y. 2013-14. 9. The ld AR has further submitted that Rs. 13,73,372/- is the value adopted by Sub-registrar for re-allotment of both the plots to assessee himself through JDS (Jaipur Development Authority) that too at nominal registration charges for the reason that both these plots were already owned by the assessee but as per prescribed procedure, he had to surrender them in favour of JDA for conversion in urban/residential plots. 10. As per the ld AR, two unapproved society plots of land (plot No. B-142 & Plot No. B-143) were purchased by the assessee in the year 201213 (with backdated pattas of 1997). On both the plots, assessee had incurred following expenses/ payments in getting them converted into urban plot of land: Plot No. B-142 (293.33 Sq. yards) S.No. Date/year Head of payment Amount P.B. page 1. 2012-13 Cost of plot (to Housing Society) 20,116 6 2. 28.02.2014 Regularizat....
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....0.2016 3,75,000 3,18,825 6,86,686 B-143 75,930 06.10.2016 3,75,000 3,18,825 6,86,686 Total 1,53,121 - 7,50,000 6,37,650 13,73,372 Both the lower authorities had neither considered the cost of plots paid by the assessee nor payments made to JDA (cost of improvement) for re-allotment in assessee's name through the office of Sub-registrar. Even ld. AO nowhere admitted or confirmed finding of any incriminating material or other evidence during course of search which could justify such addition. 14. The ld AR has also contended that the issue is covered by the decision of the Coordinate Bench in the case of Smt. Pallavi Tomar Vs ACIT in ITA No. 1028/JP/2017 order dated 24/07/2018 wherein similar addition was deleted on the plea that no incriminating material was found during the course of search. 15. On the other hand, the ld DR has contended that the incriminating document in the form of pattas of plot No. B-142 and B-143 were found during the course of search on the basis of which, the A.O. made detailed enquiry. In terms of the enquiry so made, the A.O. has correctly made addition of Rs. 13,73,372/-. He has further relied on t....
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....he original return of income for the assessment year was filed u/s 139(1) on 23.01.2014 and the last day of issuing notice section 143(2) had expired on 30.09.2014 before the date of search i.e. 30.10.2014. Thus, it is clear assessment proceedings were not pending on 30.10.2014 i.e. the date of search. As per section 153A of the Act, once a search and seizure action is carried out, the AO has to assess or reassess the total income of the assessee in respect of 6 years immediately preceding the assessment year relevant to the previous year in which a search is conducted or requisition is made. In case the assessment is pending on the date of search the same shall be abated as per proviso to section 153A(1) of the Act and the AO is free to assess the income of the assessee as regular assessment. However, in case of completed assessment and not abated due to initiation of search u/s 132 or making of requisition u/s 132A the AO has to reassess the total income of the assessee and therefore, the assessment already completed can be tinkered with or distrusted until and unless incriminating material is found and seized during the course of search or requisition as case may be indicating u....
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....o tax". iv Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material. " v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be ....
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....ns for each assessment year falling within the six assessment years immediately preceding the assessment year relevant to the previous year in which the search or requisition was made. Another significant feature of this Section is that the Assessing Officer is empowered to assess or reassess the "total income" of the aforesaid years. This is a significant departure from the earlier block assessment scheme in which the block assessment roped in only the undisclosed income and the regular assessment proceedings were preserved, resulting in multiple assessments. Under Section 153A, however, the Assessing Officer has been given the power to assess or reassess the 'total income' of the six assessment years in question in separate assessment orders. This means that there can be only one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. 20. A question may arise as to how this is sought to be achieved where an assessment order had already been passed in respect of all or any of those six assessment years, either under Section 143(1)(a) or Section 143(3) of the Act. If such an or....
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....n of the total income, it has been provided in the second proviso of sub-Section (1) of Section 153A that any proceedings for assessment or reassessment of the assessee which are pending on the date of initiation of the search or making requisition "shall abate". Once those proceedings abate, the decks are cleared, for the Assessing Officer to pass assessment orders for each of those six years determining the total income of the assessee which would include both the income declared in the returns, if any, furnished by the assessee as well as the undisclosed income, if any, unearthed during the search or requisition. The position thus emerging is that the search is initiated or requisition is made, they will abate making way for the Assessing Officer to determine the total income of the assessee in which the undisclosed income would also be included, but in case where the assessment or reassessment proceedings have already been completed and assessment orders have been passed determining the assessee's total income and such orders subsisting at the time when the search or the requisition is made, there is no question of any abatement since no proceedings are pending. In this lat....
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....me), 139(5) (revised return of income), 147 (income escaping assessment) and 263 (revision of orders) of the Act. 26. The plea raised on behalf of the assessee that as the first proviso provides for assessment or reassessment of the total income in respect of each assessment year falling within the six assessment years, is merely reading the said provision in isolation and not in the context of the entire section. The words 'assess' or 'reassess' have been used at more than one place in the Section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word 'assess' has been used in the context of an abated proceedings and reassess has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search or making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only based on the incriminating material found during the course of search or requisition of documents. 27. The Allahabad High Court in Smt. Shaila Agarwal's (supra) has held as und....
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....ction or claim expenditure which has not been claimed in the original assessment, which assessment already stands completed, only because a assessment under Section 153A of the Act in pursuance of search or requisition is required to be made. " 8. Accordingly, in the facts and circumstances of the case when the assessment has been completed u/s153A without any reference to the incriminating material evidencing any investment over and above disclosed in the financial statements and in light of the binding precedents as cited above, the addition made by the AO is not sustainable, the same is deleted. In the result, the appeal filed by the assessee is allowed." 19. Thus, it is clear from the above decision of the Coordinate Bench that the addition was deleted on the plea of assessment being not pending on the date of search and no incriminating material was found during the course of search. However, in both the cases before us i.e. Dr. Swati Tomar and Dr. Anurag Tomar, assessments were pending. In so far as in case of Dr. Swati Tomar is concerned, the return for the relevant assessment year was filed on 04/6/2014 and six months for the issue of notice U/s 143(2) ....