TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 1238
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.... on 28.09.2011 declaring a total income of Rs.2,04,99,463/-. In the computation of total income, assessee declared long term capital loss on sale of land measuring 7 acres 15 guntas situated at Kengeri Hobli, Bengaluru Rural (hereinafter referred to as 'property'). The said return of income filed was accepted by the AO. An order under section 143(3) of the Act dated 28.6.2013 was passed by the AO. The AO made disallowance of expenses and made an addition of Rs.6,56,000/- thereby determining the total income of the assessee at a sum of Rs.2,11,49,643/-. In so far as the long term capital loss declared by the assessee is concerned, the same was accepted by the AO, in the sense that the AO did not disturb the claim made by the assessee in the ....
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....rder u/s. 263 of the Act starting point of limitation cannot be the order u/s. 153A of the Act as the computation of capital gains was not subject matter of reassessment u/s. 153A. The period for limitation in so far as the issue of capital gain on sale of the property is concerned, it is the original order passed u/s.143(3) of the Act dated 28.6.2013 that should be considered. The period of 2 years from the end of the relevant financial year in which the order sought to be revised was passed has already expired as on 31.3.2016. For the above proposition, the assessee relied on the decision of Hon'ble Supreme Court in CIT v. Alagendran Finance Ltd 293 ITR 1 (SC). The facts of the case before the Hon'ble Supreme Court are that the assessment....
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....d to the capital loss declared and hence made no addition. 6. The CIT however did not accept the plea of the assessee and he held that the order of the AO was erroneous and prejudicial to the interest of the revenue. He held that if property was a capital asset then capital gain on sale of the property had to be computed by applying the provisions of Sec.50C of the Act. If it is held to be agricultural land there would be no capital loss/gain and therefore the claim for carry forward of the capital loss which was wrongly allowed should be withdrawn. He accordingly set aside the order of the AO dated 30.11.2016 and directed the AO to make inquiries and verification with regard to the issue and redo the assessment de-novo after due considera....
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....held in the following decisions: a) CIT v. Sinhgad Technical Education Society 397 ITR 344 (SC) b) CIT Vs IBC Knowledge Park P. Ltd 385 ITR 346 (Kar) c) ACIT Vs Cornerstone Properties Pvt Ltd (ITA No. 1714 to 1717/Bang/2013) d) CIT Vs Kabul Chawla 380 ITR 573 (Del) e) Sree Lakshmi Venkateshwara Minerals v. DCIT 186 ITD 695 (Bang) (Para 31) 9. The Hon'ble Karnataka High Court in the case of Canara Housing Development Co., (2014) 49 taxmann.com 98 in a case relating to proceedings under section 153A of the Act held that once there is a search all past assessment orders will not subsist and it is only the order passed u/s.153A of the Act that will survive. The Hon'ble Karnataka High Court in the case of IBC Knowledge Park (2016) 385....
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....eing any basis for doing so which is impermissible in law. Even in cast of a searched person, the same reason would hold good. As observed in Canara Housing Development Company supra, the Assessing Officer is empowered to assess or reassess the total income of six assessment years i.e., the income which was returned in the earlier return, the income which was unearthed during search and also any income which was not disclosed in the earlier return or which was not unearthed during the search by separate assessment orders but in our considered view the completed assessments should be subject to the safeguards provided in IBC Knowledge Park (P) Ltd. supra. "54. On u consideration of the relevant sections as well as judicial precedent referr....
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....the pending assessments are concerned only one assessment shall be made separately for each assessment year on the basis of the income unearthed during search and any other material existing or brought on the record of the Assessing Officer. Even in the absence of any incriminating material abated assessment or reassessment could be done. The returns filed under Section 139 of the Act gets replaced by the returns filed under Section 153A[1] of the Act. Pending proceedings in appeal, revision/application shall not abate subsequent to initiation of Section 153A proceedings. Further, recording of satisfaction under Section 153A may not be necessary unlike Section 153C of the Act which mandates recording of satisfaction." 10. In view of the ab....