TaxTMI 
TaxTMI 
2022 (5) TMI 1487
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....iate that in the case of M/s.Calcutta Knitwears, the A.O. of the "searched person" and the "other person" were not the same whereas in the case the of the assessee, the A.O of the "searched person" and the "Other Person" are one and the same. 3. The Boards Circular no.24/2015 dated 31.12.2015 does not contemplate that satisfaction should be recorded in the case of the searched person and the other person to proceed with u/s 153C when the A.O. is the same. 4. The learned C.I.T.(Appeals) failed to appreciate that the same person i.e. when the .AO of the "searched person" and the "Other Person" are one and the same, cannot have contradictory views about satisfaction or about belongingness of the seized material. 5. The CIT(Appeals) erred in not taking into cognizance the decision of the Hon'ble Delhi ITAT in the case of M/s. Super Malls Pvt. Ltd. (76 Taxmann.com 267) dated 22.11.2016 wherein the order of the ITAT in ITA Nos.1693-1696/2015 dated 11.12.2015 was set aside. The ITAT, Delhi, had held that recording of satisfaction by the AO of the searched person was required even if the AO for the "searched person" and the "Other Person" are one and the same. 6. The learned C.....
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....ate that satisfaction should be recorded in the case of the searched person and the other person to proceed with u/s 153C when the A.O. is the same. When the AO of the "searched person" and the "Other Person" are one and the same, there cannot be contradictory views about satisfaction or about belongingness of the seized material. The words "Incriminating materials" does not find place in the provisions of section 153C of the Act to hold that incriminating material was sine qua non for invocation of provisions of section 153C. 5. The CIT(Appeals) erred in allowing the appeal of the assessee relying on the decision of the Hon'ble Supreme Court in the case of M/s.Calcutta Knitwears (362 lTR 673)(SC), Karnataka High Court Judgment in the case of CIT Vs. IBC Knowledge Park P Ltd. (385 ITR 346)(Kar) stating that only when incriminating material belonging to the assessee is available, there is a case for issue of notice u/s.153C of the Income Tax Act, 1961 and also relying on the Boards Circular 24/2015 dated 31.12.2015. The ld. DR brought to our notice the decision of the Karnataka High Court in the case of M/s. Canara Housing Development Corporation (49 Taxmann.com 98) wherein it ....
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....AT which quashed the assessment vide its order in ITA No.551/Bang/2014 dated 21.11.2014 and the order of the ITAT was upheld by the Jurisdictional High Court for A.Y. 2005-06 which is placed at pages 23 to 54 of the paperbook. 9. The ld. AR submitted that as regards material 18/ST/132, it contains details of loans sanctioned by financial institutions and these are all duly disclosed in the balance sheets of the assessee and do not in any manner constitute incriminating material. He submitted that that for a material to be labelled as incriminating, the same should have not been disclosed to the department and must also indicate income which a person has neither disclosed, nor has the intention to disclose ever and unearthed during the search proceedings. In the present case, the materials relied upon to initiate proceedings u/s 153C are not only known to the department long before proceedings being initiated u/s 153C, but also income from the same sought to be brought to tax even before they actually accrue to the assessee. In the light of these facts these impugned materials namely 14/ST/132 & 18/ST/132 cannot be labelled as incriminating material which is a sine qua non for init....
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....for commencement of proceedings u/s 153C & deemed to be the date of search. The assessments for the A.Y. 2010-11 & 2011-12 do not abate on 30/08/2013. In view of the fact that these assessments do not abate, the same cannot be disturbed in the absence of incriminating material which warrants disturbance of the income returned originally. It is an undisputed fact that there is no such incriminating material unearthed during the search. He relied on the decision of the coordinate bench of this ITAT in the case of Sree Lakshmi Venkateshwara Minerals vs DCIT 123 taxmann.com 255 (Bang Trib). 15. He thus pleaded that the decision of the CIT(Appeals) cancelling the assessment orders passed u/s 153 C r.w.s. 143(3) of the Act is to be upheld. 16. We have heard the rival submissions and perused the record. There was a search in the case of Srinivasa Trust on 6.8.2012. In the course of search documents belonging to the assessee were found. The documents seized and marked as Annexure 14/ST/132 comprised Joint Development Agreement dated 5.2.2005 between the assessee and PEPL and related documents. The related document marked as 18/ST/132 consisted of loan sanction details of the assessee. Af....
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....ade in the order of assessment with respect to the JDA entered into with Prestige Estates Pvt Ltd are as under:- 1) A.Y. 2010-11 (i) Rs. 75,83,01,870/- made to Income from Business; (ii) Rs. 75,83,01,870/- made to Income from Business; (iii) Rs.9,92,46,023/- made to Income from Long term Capital Gains (LTCG); (iv) Disallowance u/s 14 A Rs.6,33,414/-. 2) A.Y. 2011-12 (i) Rs. 325,32,46,980/- made to Income from Business; (ii) Rs. 325,32,46,980/- made to Income from Business; (iii) Rs.71,90,45,278/- made to Income from Long term Capital Gains (LTCG); (iv) Rs. 84,92,10,510/- made to Income from Short term Capital Gains (STCG). (v) Disallowance u/s 14A Rs.7,91,031/-. 20. He submitted that the AO has in the assessments order concluded that the Developer has completed development and has handed over the Owners constructed Area to the Respondent and has received the Developer's share of land from the Respondent in lieu thereof. The AO having come to the said conclusion proceeded to assess the income of the Respondent on the basis that the Respondent had transferred land to the Developer & had received consideration in the form of Built up area during the previous ye....
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....spect of this entire agreed area of 6,99,469 sft of built up area. If the developer were to hand over 69,947 sft being 10% of the agreed built up area in a particular financial year, then Rs10 crores would be transferred to income from the Non-Refundable deposit of Rs.100 crores & the Non-Refundable Deposit as on 31st March of the said financial year would stand reduced to Rs.90 crores. 25. As a natural corollary since no built-up area is received by us during A.Y. 2010-11 & 2011-12, no portion of the Non-Refundable Deposit of Rs.100 crores would fructify into income for the said assessment year. 26. The fact that the land which is subjected to Joint Development is Stock In Trade of the assessee is a very important fact to take note off in order to decide the exact point in time as to when the ownership in these lands held as stock in trade gets actually transferred from the Respondent. The application of section 45 is limited to sub section (2) of section 45 in as much as the impugned lands are held as Stock in Trade. The provisions of section 53A of the Transfer of Property Act apply to an asset held as a Capital asset /investment & not to Stock In Trade. 27. It is submitted t....
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....would partake the character of sale consideration only upon the ownership of the undivided interest in land being transferred by a sale deed and not before that and then only to the extent of the amount proportionately applicable to the extent of land so transferred." 30. Thus, from the above brief submissions made above as regard to the merits of the matter, it is submitted that the additions made in the order of assessment is not warranted and further the binding decision of the Jurisdictional ITAT, Bangalore Bench in assessee's own case for the AY 2009-10 in ITA No. 52/Bang/2013, order dated 27/03/2015 supports the contention of the assessee, as no income accrues to the assessee either by way of Income from Business and nor by way of Capital Gains whether Long or Short Term Capital gains which has held that when an immovable property is held as stock-in-trade, the same is to be considered as sold only when the sale is conveyed by means of a registered sale deed and not before that. 31. Thus, the additions made by the AO have been rightly deleted by the CIT A for the A.Y. 2010-11 & 2011-12 & the order of the CIT(A) needs to be confirmed in the interest of Justice. 32. The ld. ....