TaxTMI 
TaxTMI 
2021 (12) TMI 537
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....me in regular course. Subsequently, on 31-07- 2014, a search and seizure operation under section 132 of the Act, 1961 was carried out in case of Ameya group. Based on information / material found during search and seizure operation, proceedings under section 153C of the Act were initiated against the assessee. In course of search and seizure operation, certain incriminating materials were found indicating that the assessee had received onmoney in respect of sale of properties developed by it and in the returns of income filed in pursuance to notice issued under section 153C of the Act, the assessee offered additional income representing on-money received in the relevant assessment years. However, against the additional income so declared, assessee had claimed deduction towards expenses as well as deduction under section 80-IB(10) of the Act. While considering assessee's claim of deduction, the assessing officer observed, since the assessee had offered additional income in the proceedings initiated under section 153C of the Act, claim of deduction cannot be allowed in view of provisions contained in section 80A(5) of the Act. Further, he observed, since the purpose of search is to u....
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....ngs, the assessing officer has power to assess or re-assess any income not disclosed by the assessee. Thus, he submitted, in assessment proceeding under section 153C of the Act, the assessee cannot put forward a fresh claim of deduction as the proceeding under section 153A or 153C of the Act is not for the benefit of the assessee but is for the purpose of assessing undisclosed income found as a result of search. Therefore, the assessee cannot turn the proceedings to its advantage. In support of such contention, learned departmental representative relied upon the judicial precedents referred to by the departmental authorities as well as the decision of the Hon'ble Supreme Court in the case of Sun Engineering Works 198 ITR 297(SC). 6. We have considered rival submissions in the light of decisions relied upon and perused materials on record. Undisputedly, in course of search and seizure operation conducted in case of some other assessee incriminating material was found and seized indicating that the assessee had received on-money in cash towards sale consideration of the project. The receipt of on-money has also been accepted by the assessee as would be evident from additional inco....
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....sessment which has been made u/s 153A(l)(b) of the Act as a consequence of a search action u/s 132(1) of the Act. 11. In the course of search, in a statement deposed u/s 132(4) of the Act, assessee declared certain additional income pertaining to the housing project in question. The additional income declared was on account of on-money received from the customers to whom flats were sold in the said project. At the time of hearing, learned counsel referred to the copy of statement recorded u/s 132(4) of the Act of Shri Rajesh Malpani, a partner of the assessee firm and also copies of some of the seized papers, which indicated receipt of on-money, and the same have placed in the Paper Book at pages 35 to 52. A perusal of the seized material shows that a complete detail of that on-money received is enumerated, viz. name of the customers, amount and the respective flat sold in the project. Even in the deposition made u/s 132(4) of the Act. the partner of the assessee firm made a yearwise detail of additional income declared on account of on-money received on sale of flats in the project. Accordingly, the impugned sum has been declared as unaccounted income from the housing pro....
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....us on facts, has to be treated as 'business income1 albeit, the same was not accounted for in the account books. In this manner, we are unable to accept the stand of the Assessing Officer or of the CIT(A) that the said income is not liable to be taxed as 'business income'. 12. Now, coming to the point as to whether such 'business income1 qualifies to be eligible for deduction u/s 80IB(10) of the Act in the course of an assessment made u/s 153A(1)(b) of the Act. On this aspect, the learned Departmental Representative submitted that the assessment in cases of search action or requisition are made u/s 153A or 153C of the Act in order to assess undeclared incomes and such provisions are for the benefit of the Revenue and therefore a claim u/s 801B(10) of the Act cannot be considered in such proceedings, especially when such a claim was not made in the return of income originally filed under section 139 of the Act. In this regard, the learned Departmental Representative has referred to the judgment of the Hon'ble Supreme Court in the case of CIT v. Sun Engg. Works (P.) Ltd, 1992 1198 ITR 297/64 Taxman 442 to point out that even in the cases of re-asses....
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....3A(l)(b) or not? In our considered opinion, having regard to the expression "all other provisions of this Act shall apply to the assessment made under this section" in Explanation (i) of section 153A of the Act, it clearly implies that in assessing or reassessing the 'total income' for the assessment years specified in section 153 A( 1 )(b) of the Act, the import of section 80A(1) of the Act comes into play, and there shall be allowed the deductions specified in Chapter VIA of the Act, of course subject to fulfillment of the respective conditions. Therefore, we are unable to subscribe to the stand of the CIT(A) to the effect that the benefits of Chapter VIA of the Act, which inter-alia include section 80IB(10) of the Act, are not applicable to an assessment made under sections 153A to 153C of the Act. In our considered opinion, the phraseology of section 153A r.w. Explanation (i) as noted above, does not support the premise arrived at by the CIT(A) and accordingly, the same is rejected. Therefore, asscssee's claim for deduction u/s 801B(10) of the Act even with regard to the enhanced income was well within the scope and ambit of an assessment u/s 153A(l)(b) of the Act a....
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....one were to import the reasoning raised by the learned Departmental Representative based on the judgment of the Hon'ble Supreme Court, to the present case, yet we do not find that it would debar the assessee from claiming deduction u/s 80IB(10) of the Act on the impugned additional income declared in the return filed in response to notice u/s 153A(l)(a) of the Act. In the present case, the claim of deduction u/s 80IB(10) of the Act was made in the return of income originally filed and in the return Hied in pursuance to the notice u/s 153A(l)(a) of the Act, the claim u/s 80IB(10) of the Act is only enhanced and therefore, it is not a fresh claim. Therefore, in our view, the judgment of the Hon'ble Supreme Court in the case of Sun Engineering Works (P.) Lid. (supra) does not help the Revenue in the present case. 17. In-fact, the Hon'ble Bombay High Court in the case of Sheth Developers (P) Ltd. (supra) was considering the claim of deduction u/s 80IB(10) of the Act in relation to the undisclosed income declared consequent to the search action. In the case before the Hon'ble High Court, it was factually emerging that undisclosed income was earned by the assesse....