TaxTMI 
TaxTMI 
TaxTMI 
2024 (1) TMI 409
X X X X Extracts X X X X
X X X X Extracts X X X X
....77/Srt/2023 is treated as a "lead case". In this appeal, the assessee has raised following grounds of appeal: "1. The learned Income Tax Officer was not justified in reopening of the case u/s 147 of the Act and the ld. CIT(A) has erred in confirming the same. 2. The learned Income Tax Officer has erred in issue of notice u/s 148 of the Act and the ld. CIT(A) has erred in confirming the same. 3. The learned Income Tax Officer was not justified in making addition of Rs. 6,03,420/- on account of unexplained investment under construction of work. 4. The learned Income Tax Officer was not justifying in making addition of Rs. 19,76,952/- on account of minimum profit accumulated from the project. 5. The learned Income Tax Officer was not justified in making addition of Rs. 92,33,526/- on account of construction work done by the assessee treated as taxable business receipts and the ld. CIT(A) has erred in confirming the same. 6. The appellant reserves the right to add, alter, amend or withdrawn any grounds of appeal." 2. Rival submissions of the both the parties were heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that reo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....irm has offered the additional income/profit of Rs. 6,23,00,000/- (Rs. 623. 00 Lakhs). The additional income offered in course of search proceedings, was other that the normal profit of the firm. The ld AR for the assessee has shown that said firm has offered following income for three years in the following manner: Asst. Year Income offered by assessee Total Tax paid by Global Enterprises Normal Disclosure 2008-09 1,70,25,818 6,23,00,000 7,93,25,818 2,81,23,237 2009-10 85,09,339 - 85,09,339 27,33,690 2010-11 35,33,192 - 35,33,192 11,11,180 Total 2,90,68,349 6,23,00,000 9,13,68,349 3,19,68,107 4. Pursuant to search and survey action the assessment of Global Enterprises for three assessment years (AY 2008-09 & 2009-10) were completed under section 143(3) of the Act and the assessment for were completed by DCIT, Central Circle-1, Surat on 31.12.2009 and 29.12.2011 respectively. And assessment for AY 2010-11 was completed by ACIT, Circle 3, Surat on 28.02.2013. The copy of assessment order for AY 2008-09 of Global Enterprises is filed. There was certain other addition made by Central Circle-1, Surat and in further appeal the addition were deleted by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at in fact no income has escaped from the assessment, the income has already been offered and accepted in the hand of Global Enterprises, which is related party. To support his submissions, the ld AR for the assessee relied on the decision of Hon'ble Apex Court in CIT Vs Glaxo Smithkline Asis (P) Limited (2010) 236 ITR 113(SC)/ 195 Taxman 35 SC and in Ashish Plastic Industries Vs ACIT in Civil Appeal No. 1509 of 2004. The ld AR for the assessee submits that even on merit of the addition the assessee has good case as neither the income is escaped nor the assessee concealed any income, entire income has been offered in the hand of Global Enterprises which is taxed at maximum marginal rate. Even of the proportionate income as per their contributions, it would have been revenue neutral. The assessing officer made additions in all years on the basis of imaginary calculation, which is quite difficult to understand. The assessing officer tried to calculate profit on the basis of registration deeds of flats in particular year, which is not possible as the assessee is following mercantile system of accounting. The ld AR for the assessee, thus on the basis of his submissions prayed for allow....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Guj)/ 366 ITR 186, Aradhana Estate (P) Limited Vs DCIT (2018) 91 taxmann.com 119 (Guj), Jayant Security Vs ACIT (2018) 91 taxmann.com 181 Guj, PCIT Vs Gokul Ceramics (2016) 71 taxmann.com 341 (Guj), Hon'ble Supreme Court in ITO Vs Purushottam Dass Banger (1997) 90 Taxman 541 SC/ 227 ITR 362 SC, ITO Selected Dalurband Coal Co (P) Ltd (1996) 217 ITR 597 and Madras High Court in Sterlite Industries (India) Ltd Vs ACIT ( 2009) 177 Taxman 311/ 302 ITR 275- Madras. 10. We have considered the submissions of both the parties and have gone through the orders of the lower authorities carefully. We have also gone through all the case laws relied by the le representatives of the parties. There is no dispute that eight group entity agreed to contribute their land for development with Global Enterprises, which is also group concern, being partnership firm of the directors and the shareholders of those group entities. The share of land contribution in Global Enterprises by all eight company was in the following manners; Sr No. Name of the entity of group (Akansha Group) PAN Share in land 1 Aakansha Organisers Pvt Ltd AABCA 9583 E 11.64% 2 Ankush Construction Pvt Ltd AABCA 9585 C 11.6....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has raised the issue that when the properties were transferred at cost so there is no actual profit in the hands of assessee company, then under which section of Income-tax Act income escaped in the hands the income is escaped in hands of assessee company. (v) The assesse also stated that Section 43CA or 50C were even applied even in that case the property is transferred at more than jantri value. In other words, in the reason recorded it is not mentioned under which section income is escaped in the hands of assessee company. (vi) The wording of reason recorded are borrowed from the order under section 263 of the Act passed by Ld. CIT-1, Surat in the case of Akanksha Organisers Pvt. Ltd in AY 2009-10 and (vii) 'When the view of the assessee were accepted in scrutiny assessment proceedings u/s 143(3) of the Act, then on same issue the re-opening is change of opinion that too on without any subsequent material come to the notice of assessing officer. 13. The objections of the assessee was rejected by assessing officer vide order dated 10.02.2015. The assessing officer completed assessment on 30.06.2016 and made addition of Rs. 92,33,526/- being % profit on the share. Addition of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l Enterprises and accepted by revenue, as to how its 11.64% being share of assessee can be again brought to tax. The assessing officer and the ld CIT(A) failed to appreciate the settled position under taxing statue that double taxation of similar revenue (income) is not permissible. 16. We find that Hon'ble Supreme Court in Ashish Plastic Industries Vs ACIT in Civil Appeal No. 1509 of 2004 while considering the plea of assessee that sales which is found in their books of account, on which tax has been paid by M/s Ashish Agro Plastic Limited (sister concern), the Hon'ble Court held that if the appellant is able to prove that tax on the income generated from the sale of the material has been paid by Ashish Agro Plastic Limited, benefit thereof should be extended to the assessee. Thus, on the basis of afforesaid factual and legal position, we are of the considered view that there was no income which escaped from assessment, the receipt of income as indicated from the reasons recorded itself was taxed by the revenue in the hands of Global Enterprises. Hence, the reasons recorded itself was not sufficient and rather incorrect assumption of facts, based on which the action of reopening ....