TaxTMI 
TaxTMI 
2021 (8) TMI 235
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.... make additions in completed assessment u/s. 153A r.w.s. 153C of the Act; in the absence of any incriminating documents or evidence found during search proceedings. 1. Addition u/s. 69 on land block No. 127 Rs. 11,00,000/- 2. Unexplained investment u/s. 69 on protective basis Rs. 2,97,59,230/ 3. Addition u/s. 69 on land block No. 141 Khajod Rs. 11,00,000/ 4. Unexplained investment u/s. 69 on protective basis Rs. 2,50,00,000/- 5. Unexplained investment made u/s. 69 Rs. 3,00,00,000/- 6. Unexplained investment u/s. 69 on protective basis Rs. 2,94,94,997/- 2. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in allowing the additional grounds of appeal raised by the assessee ignoring the Proviso of clause (b) of section 153A of the Act which empowers the AO to assess or reassess the total income in respect of each assessment year falling within such six assessment years. The section 153A does not preclude the AO to look beyond the incriminating material and restrict the assessment to the incriminating evidences found and seized during the course of search. 3. On the facts and i....
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....searched nor covered in the search, the notice is served after 21 months from the date of search. The time limit prescribed under section 153B for completing assessment under section 153C, was up to 31.03.2016. The objection of assessee was not accepted by the Assessing Officer. The Assessing Officer issued show cause notice under section 144. The assessee raised objection for completing assessment under section 144. The Assessing Officer after rejecting the objection of assessee proceeded for assessment. The Assessing Officer while passing the assessment order made following additions: 1. Addition u/s. 69 on land block No. 127 Rs. 11,00,000/- 2. Unexplained investment u/s. 69 on protective basis Rs. 2,97,59,230/ 3. Addition u/s. 69 on land block No. 141 Khajod Rs. 11,00,000/ 4. Unexplained investment u/s. 69 on protective basis Rs. 2,50,00,000/- 5. Unexplained investment made u/s. 69 Rs. 3,00,00,000/- 6. Unexplained investment u/s. 69 on protective basis Rs. 2,94,94,997/- 4. The Assessing Officer also withdrew the long term capital gain (LTCG) offered / shown by the assessee in AY 2011-12. The assessee offered capital gain o....
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....l and deleted the additions. 7. Before the Ld. CIT(A), the assessee also made submission for objecting the additions on merits. All the submission of the assessee with regard to the various additions are recorded by Ld. CIT(A) in para 7 at page No. 8 to 38. However, the Ld. CIT(A) on the merits of the additions held that the addition are not based on any incriminating material. Therefore, discussion on merit of the addition had become academic. 8. On the issue of withdrawal of long term capital gain, the assessee also made separate written submission as recorded in para 8 at page No. 38 to 51 of the order of ld. CIT(A). The assessee submitted that the assessee M/s DRB Ravani Developers is a partnership firm, engaged in the business of residential project, namely "Callestrial Dreams". The assessee along with other nineteen partners is partner in M/s DRB Ravani Developers. The assessee along with his seven co-owners were having agricultural land bearing a plot No. 4 & 5 TPS file (Vesu Bhimrad) known as 'Vesu Land', each were having 12.5% share in the land. The total sellable area of Vesu land was 32064 sq. mts, (as per Revenue record 34100 sq. mts), out of the total area 173....
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....ee also stated that the addition is not based on incriminating material found at the time of search on 27.12.2012 on land and builders group. The incriminating documents related to assessee seized from the premises were asked vide notice dated 11.09.2014 i.e. before issuance of notice under section 153C on 16.09.2014, which nowhere contain any query or material with regard to land in dispute. The assessee also relied on certain case law, 10. The Ld. CIT(A) after considering the submission held that the capital gain of the impugned land is taxable in the AY 2011-12 and directed to delete the additions in AY 2013-14. The Ld. CIT(A) also held that as per section 2(47) any transaction involving allowing possession to be taken or retained in part performance of a contract of the nature referred in section 53A of Transfer of Property Act would come within the ambit of section 2(47). In order to attract section 53A, the conditions is that the contract is in writing , it should be signed by the transferor and pertains to immovable property and the transferee should have taken possession of the property and he is ready and willing to perform his part of contract. The Ld. CIT(A) held that....
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....ere was no performance of sale of the land in AY 2011-12. The transfer of the land, on the sale proceed of which the assessee claimed LTCG was in fact transfer during AY 2013-14, by way of sale deed dated 09.11.2012 and the correct year of taxation of such long term capital gain in the year when the asset was actually transferred. The assessee cannot choose the year of taxability as per his convenience. 13. On the other hand the Ld. Sr. counsel of the assessee while opposing the grounds of appeal for AY 2011-12, supported the order of the ld CIT(A). The learned Sr Counsel for the assessee submits that the assessee field his return of income on 27.03.2012. The notice under section 153C dated 16.09.2014 was served up on the assessee. When the notice under section 153C was served, the time limit for issuing the notice under section 143(2) had already expired. Thus, no assessment for that year was pending at the time of service of notice under section 153C. The assessing officer while recording the satisfaction under section 153C, referred about the documents related to the cancellation of sale deeds of and sadakat of different lands founds during the survey action on A Sai Leela....
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....nd contribution by or twenty partners became 17307 sq.mts, on which project of "Callestrial Dreams" was started. All the co-owners had duly paid tax on the sale of land in A.Y 2011-12. 16. The learned senior counsel submits that the assessee had shown Long Term Capital Gains of Rs. 1.45 Crores in AY 2011-12. It was submitted that on introduction of land by all partners to the firm, possession of land was given on 01.11.2010 and construction was started by firm in AY 2011-12. The firm DRB Ravani Developers had shown the land as stock-in-trade in the balance-sheet in A.Y. 2011-12. It was argued that one of the family members of assessee filed a Civil Suit and obtained a Stay order from Civil Court, against the transfer of land and due to injunction order on sale of the portion of land, sale deed could not be executed in AY 2011-12, the copy of stay order is placed on record. The Civil dispute was cleared in AY 2012-13 and the sale deed was executed on 09.11.2012 at stamp duty applicable on that day at Rs. 6.06 crore. Copy of sale deed was also furnished. The learned Senior counsel further submitted that the assessee and all other seven co-owners shown capital gains in A.Y. 2011-12....
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....No additional income was offered by the assessee in the return filed in response to the notice under section 153C. The assessment order was passed within eleven days of filing return of income and service of notice under section 143(2) dated 16.03.2015. The assessing officer made various additions while passing the assessment order including certain additions on substantive as well as protective basis in the assessment order passed under section 143(3) rws 153C on 27.03.2015. Before ld CIT(A), the assessee besides challenging the additions on factual basis also raised additional ground of appeal that the additions made in the assessment is not based on any incriminating evidence found during the search on the Ravani Group. On filing additional ground of appeal, the assessing officer was directed to file his reply. The assessing officer filed his reply dated 24.102016 before ld CIT(A). The learned CIT(A) after considering the reply of assessing officer admitted the additional grounds of appeal. 19. The ld CIT(A) after considering the detailed submissions of the assessee on various additions held that the time limit for issuance of notice under section 143(2) had also expired when....
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....tions is that the contract is in writing , it should be signed by the transferor, pertains to immovable property and the transferee should have taken possession of the property and he is ready and willing to perform his part of contract. The Ld. CIT(A) held that main agreement and evidence for binding the parties is the partnership deed, which contains the signature of all the parties of seller and purchaser and consideration is clearly discernible. The possession of the land is with the Firm is also evidenced by the partnership deed dated 01.11.2010 and initial payment as per the sale deed is in October 2010. 22. Before us the ld CIT-DR for the revenue vehemently submitted that no performance of transfer of land in AY 2011-12 and that the sale deed of the impugned land was executed during the period falls in AY 2013-13. However, the learned Senior Counsel for the assessee while explaining the fact submitted that assessee along with his seven co-owners of land during the assessment year 2011-12 by mutual agreement to Rajkumar Karamshibhai Ravani and eleven other parties on 25.10.2010 for consideration of Rs. 6.05 Crores. Raj Kumar Karamshibhai Ravani and other co-owner of said l....