TaxTMI 
TaxTMI 
2022 (5) TMI 669
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....earch and seizure action u/s.132 of the Act was carried out on 18.02.2014 in the case of Raj K Shah & Group at its office and residence of the key person Raj K Shah. The assessee is a Private Limited Company in which Raj K Shah is a Director. The assessment in the case of the assessee company was completed u/s 143(3) r.w.s. 153C of the Act, determining total income at Rs..2,89,66,121/- on 30.12.2016. In response to notice u/s.153C of the Act, assessee filed return of income manually declaring total income at Rs..12,48,04,590/- on 11.01.2016. However, in view of the fact that the assessee company failed to pay the self-determined Self-Assessment Tax of Rs..5,67,86,980/-, the Assessing Officer treated the manual return to be invalid u/s 139 of the Act. 4. While verifying the assessment records Ld.Pr.CIT, Mumbai observed that Assessing Officer having invalidated the manual return filed by the assessee in response to notice u/s.153C, he ought to have considered the details of manual return while completing the assessment u/s 143(3) r.w.s. 153C of the Act. Since the assessment was prima-facie erroneous and prejudicial to the interest of revenue, proceedings u/s. 263 of the I.T. Act w....
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.... double taxation of single receipts and against the provision of Income Tax Act. 4. The appellant craves leave to add, alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal." 7. Ld. AR submitted his written submissions which is reproduced below: - "Facts of the case: 2. The following are the facts of the case relevant to dwell upon the issue as to whether the Pr. CIT was justified in passing the revision order u/s.263 of the Act:- (a) A search and seizure action under section 132 of the Act was carried out on 18.02.2014 in the case of Raj K. Shah (Director of the Appellant Company) at his office and residential premises. However, there is No Search Warrant in the name of the Appellant herein and thus the assessment proceedings were carried out invoking provisions of sec. 153C of the Act; (b) During the course of search proceedings, 15 red coloured notebooks were found from the possession of Raj K. Shah, wherein certain noting of receipts and payments were found relating to On-money received from bookings done by various customers; (c) The explanation given in ....
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....ereafter agreements for sales were executed and profits offered in the regular books of account. Based upon the same and following the method of accounting regularly employed i.e. project completion method of accounting, the total amount of Rs.28 crs. was bifurcated and offered in the assessment years as per following tabulation- Assessment year Sales offered as per audited financials %of total offer Undisclosed income offered 2012-13 35,25,23,880 44.94 12,58,38,469 2013-14 13,18,22,552 16.81 4,70,55,956 2014-15 30,00,45,550 38.25 10,71,05,575 Total 28,00,00,000 (f) On the basis of the evidences found in the form of 15 red coloured notebooks containing noting regarding on-money receipts in respect of project undertaken by the Appellant herein and on the basis of the statement of Raj K Shah recorded under section 132(4) of the Act on 18.02.2014 making the offer as above, the A.O. issued notice under section 153C of the Act on 30.10.2015 for both the years; (g) In response to notice received under section 153C r.w.s. 153A(1)(a) of the Act the Appellant herein has filed return of income on 11.0....
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....5 as if no return of income were filed by the Appellant for these two years in response to notice issued u/s.153C of the Act. 10 In respect of the invalidation of return of income for both the AYs 2012-13 and 2014-15, the AO has made the following observation in para 7.13 and 7.14 in the Assessment orders of all the 3 years i.e. AY 2011-12, AY 2012-13:- "7.13 Invalidation of Return of Income filed u/s.153C for A. V 2012-13 & 2014-15: However, the return of income for A. Y. 2012-13 and 2014-15, filed manually, were invalidated by the fact that Self-Assessment Tax remained unpaid for more than 11 months. Vide letter dated 15.11.2016, the assessee had been intimated about the defect in the return of income for A. Ys 2008-09, 2012-13, 2013-14 and A.Y 2014-15. The assessee had been given 15 days time to rectify the defect in the return by paying Self Assessment Tax. Vide letter dated 05.12.2016, it was intimated to the assessing officer that Self Assessment Tax had been paid for A. Y 2008-09 and 2013-14. Further, final intimation u/s 139(9) of the Act was served on the assessee on 26.12.2016 requiring the assessee to pay Self Assessment Tax for A. Ys 2012-13 & 2014-15 ....
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....ered in respect of on-money receipts based upon 15 red colored notebooks and apportioning the same in subsequent years following project completion method of accounting was rejected. 13. With respect to the Application of Funds i.e. accommodation entries taken in the books of account of Shri Raj K. Shah and the Appellant herein as also the excess jewellery seized in the course of search action and for which the Appellant had asked set off against the source of funds being on-money receipts, the same is also rejected by the AO since the AO has added the accommodation entry relating to the Appellant amounting to Rs.3 crores in its hands in AY 2012- 13 and the remaining amount of accommodation entries and excess jewellery is added in the assessment orders passed in the case of Shri Raj K. Shah. 14. The total addition made by the AO in respect of on-money, accommodation entries and excess jewellery in all the entities of the present group is tabulated as under- SR.NO Nature of Addition RahulRaj Estates P. Ltd. (Appellant) RRahulRaj Realtors P. Ltd. Shri Raj K Shah. Total 1 On-Money receipts 46,94,71,274 60,08,50,444 NIL 107,03,21,71....
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....63 of the Act for both the Asst. Years vide order dated 27.03.2019 and held as under- "5.2 I have gone through the assessee's submission and following observations are made: (a) The assessee 's submission that the entire receipts were taxed by the AO in AY 2011-12 after due application of mind is not found acceptable. The said conclusion is neither apparent from the assessment order nor the assessment records. The Assessment order clearly shows that the AO has not taken into consideration the details of undisclosed income submitted by the Assessee, vide the manual revised return u/s 139(5) of the Act. The AO has held the manual return to be invalid for non-payment of Self Assessment Tax, without taking into consideration the information and figures regards income suo moto offered in manual return, even as it was treated as invalid for non-payment of Self Assessment Tax, while assessing the total income u/s 143(3) of the Act. Hence, the order is found to be erroneous in so far as it is prejudicial to the interest of revenue in terms of Section 263 of the Act. (b) The submission of the assessee w. r. t. pendency of appeal at CIT(A), is not found ten....
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....y aggregating to more than Rs.24 crores that were offered in the statement recorded of Shri Raj K Shah and part of Rs.28 crores is separately added in the assessment orders passed in the case of Shri Raj K. Shah for respective assessment years in which the same falls after detailed discussion on this issue. Thus, entire amount of Rs.28 crores is added again based upon the disclosure made in the statement relating to application of funds. [Copy of assessment order of Shri Raj K. Shah for AY 2011-12 to AY 2014-15 are attached with this written submission] 22. The order passed by the Pr. CIT is based on incorrect facts and baseless allegations and the observations made in para 5.2 of the order as reproduced hereinabove are contrary to the factual position. The observation of the Pr. CIT in para 5.2 - clauses (a) to (c) are factually incorrect and rebutted as under- (i) it is undisputed fact that entire on-money addition is made by the AO in AY 2011-12 whereas the Pr. CIT observes that the same is neither apparent from assessment order nor assessment records. In fact, the AO has in very clear and categorically held in para 7.13 and para 7.14 of the assessment....
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....he total receipts was assessed in A.Y. 2011-12. As the on-money receipts were taxed in A.Y. 2011-12, the A.O. has not made any further addition in A.Y. 2012-13 and AY 2014-15 on account of same issue of on-money disclosure made by the Appellant on the basis of project completion method of accounting and offering the income to the extent of Application of funds totaling to Rs.28 cr. 27. The A.O. has after due application of mind not made addition of the on-money as disclosed in the return u/s.153C of the Act for AY 2012-13 and 2014-15 in order to avoid double taxation of the same on-money issue, which the AO taxed entirely on gross basis in AY 2011-12. 28. Had the AO once again added the on-money disclosed and offered by the Appellant in AY 2012-13 and 2014-15 after holding the return u!s.153C as invalid, the AO would have contradicted his own stand of - (a) firstly, taxing the entire gross on-money receipt plus scrap sales of Rs.47 cr. as against the offer of the Appellant of Rs.28 cr. as this would have lead to conclusion that the AO has accepted the offer of Rs.28 cr.; (b) secondly, AO has taxed entire gross on-money receipts in AY 2011-12 as p....
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....ores in the hands of one of the real-estate entity viz. Rahul Raj Estates Private Limited i.e. assessee company in which he is the director, in the return of income filed u/s. 153C of the Act for the below mentioned Assessment Years :- Assessment year Income offered 2012-13 12,58,38,469 2013-14 4,70,55,956 2014-15 10,71,05,575 Total 28,00,00,000 10. Accordingly, assessee filed manual return for the above said Assessment Years. For the assessment year under consideration the Assessing Officer observed that the return filed manually were invalidated by the fact that Self-Assessment Tax remained unpaid for more than 11 months. We observed that Assessing Officer intimated the same to the assessee and assessee was given 15 days' time to rectify the defect in the return by paying Self-Assessment Tax. Further several intimations were made to the assessee regarding defects in the return and since Assessing Officer has not received any communication from the assessee, he treated the return filed by the assessee manually as invalid. We observed that Assessing Officer himself observed that assessee has offered Rs..12,58,38,469/- based on the Project Completion....