TaxTMI 
TaxTMI 
TaxTMI 
2022 (9) TMI 1022
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....l loss reported in the return of income comprise of the loss under the head House Property as well as Business and Profession. Subsequently, a revised return of income was filed by the assessee under section 139(5) of the Act on 22.03.2016 declaring the same loss as was reported in the return filed under section 139(1) of the Act. Thereafter, the case was selected for scrutiny and notice under section 143(2) of the Act was issued on 15.04.2016. 3. A search action under section 132 of the Act was conducted on the assessee on 30.11.2017 and assessment proceedings under section 143(3) of the Act got abated due to the search action. Pursuant to search action, notice under section 153A of the Act was issued to the assessee on 01.08.2018 calling for the return of income. In response to the notice, the assessee filed its return of income on 30.08.2018 declaring a total loss of Rs (-) 41,98,52,777/- comprising of loss from business and profession only. 4. In the return filed under section 153A of the Act, the assessee offered income from let out of premises situated in the above referred SEZs under the head "Profit and Gain from Business and Profession" as against "House Property" in whi....
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....4-15, the assessee had adopted similar change of stand however those years were unabated and thus the Assessing Officer did not accept assessee's return filed under section 153A of the Act for those years. Accordingly, in his assessment orders, the Assessing Officer assessed income under section 153A of the Act as was returned in the return filed under section 139 of the Act and rejected the income reported in the return furnished under section 153A of the Act. In other words, the Assessing Officer treated the rental income from the premises situated in SEZ as income from "House Property" instead of Income from "Profit and Gain from Business and Profession". 9. Aggrieved by the orders of Assessing Officer for A.Y. 2015-16 and 2016-17, the assessee preferred appeals before Ld.CIT(A). 10. Ld.CIT(A), with respect to change of stand in offering income from lease rentals under head Profit and Gains from Business and Profession instead of House Property, the Ld. CIT(A) made the following observations: - A. For A.Y. 2015-16 and for A.Y. 2016-17, the Ld. CIT(A) has acknowledged the fact that the years under consideration represent abated years. B. The Ld.CIT(A) relied on the dec....
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....h assessment as per section 153A of the Act. 3. The Ld. CIT(A) erred in partly allowing the appeal of the assessee on the ground of depreciation on assets without considering the fact that in post search assessment proceedings, an assessee can neither claim nor be allowed a deduction that was not claimed in the original return." 13. At the time of hearing Ld DR brought to our notice the findings of assessing officer and submitted that the assessee cannot the change the head of income for the lease rentals earned under the head income from Business and Profession while filing the return of income u/s 153A instead of income under the head House Properties as declared in the original return of income filed u/s 139 of the Act. He submitted that the Ld CIT(A) while adjudicating failed to consider the decision of Hon'ble Supreme Court in the case of Sun Engineering Works (P) Ltd (supra) and Hon'ble Bombay High Court decision in the case of K Sudhakar S Shanbhag (supra). Similarly, he submitted that the assessee cannot claim or allowed to claim the depreciation of assets that was not claimed originally in the return of income in the subsequent proceedings u/s.153A of the Act. Therefo....
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....r allowance or disallowances as the case maybe. It has been held that once the assessment gets abated, the original return loses its originality and the subsequent return filed under section 153A of the Act takes place of the original return. Accordingly, all the legitimate claims would be open to the assessee to raise in the return filed under section 153A (1) of the Act. 18. Further, in respect of the judgment of Hon'ble Apex Court in the case of CIT v. Sun Engineering Works Pvt Ltd relied by the department as mentioned in Ground No. 2 of grounds of appeal, Ld AR submitted that the said decision was relied by the department before the Hon'ble Bombay High Court in the case of CIT v. B.G. Shirke Construction Technology P. Ltd [(2017) 395 ITR 371 (Bom)]. While adjudicating the matter, the Hon'ble Bombay High Court has held that the department has misplaced its reliance, as the judgement of Hon'ble Apex Court in Sun Engineering was restricted to the order passed under section 147/148 of the Act only. 19. Ld. AR further submitted that although, the department has not challenged the merits of the case but for the sake of completeness it is submitted that the merits ar....
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....ficer is primarily restricted to such income which has escaped assessment and does not permit reconsideration of issue which are concluded in the earlier assessment years in favour of the Revenue. 11. In the present facts for the subject assessment years it is an undisputed position that the pending assessment before the Assessing Officer consequent to return filed under Section 139(1) of the Act for the subject Assessment years had abated. This was on account of the search and as provided in second proviso to Section 153A(1) of the Act. The consequence of notice under Section 153A(1) of the Act is that assessee is required to furnish fresh return of income for each of the six assessment years in regard to which a notice has beenissued. It is this return which is filed consequent to the notice which would be subject of assessment by the Revenue for the first time in the case of abated assessment proceedings. Consequent to notice under Section 153A of the Act the earlier return filed for the purpose of assessment which is pending, would be treated as non est in law. Further, Section 153A(1) of the Act itself provides on filing of the return consequent to notice, the provision of ....