TaxTMI 
TaxTMI 
TaxTMI 
2024 (8) TMI 1626
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.... Learned CIT(A) has erred in dismissing the Ground of Appeal of assessee that case of assessee is transferred from Jurisdictional A.O. to Central Circle without obtaining the consent of the assessee U/s. 127 of the Act. Therefore, the order of A.O. is without Jurisdiction. 2. Learned CIT(A) has erred in confirming the proceedings of A.O. in reopening the assessment U/s. 147. Though the assessment is based on incriminating material found during Search at Robin Goenka. Therefore, the assessment proceedings were required to be completed U/s. 153C in place of 147 r.w.s. 143(3), the assessment as well proceedings are illegal. 3. Learned CIT(A) has erred in confirming that no satisfaction was required to be recorded by A.O. of Searched Party, since the present assessment is re-open assessment. In as much as, the assessment is based on incriminating material found during Search whereby A.O. was required to record satisfaction and issue Notice U/s. 153C. 4. Learned CIT(A) has erred in confirming income at 15% in respect of On Money received of Rs. 21,37,140 which comes to Rs. 3,20,571 (Rs. 21,37,140 * 15/100) against claim of the assessee of 8% of On Money as provided U/s. 44AD of....
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....price and more importantly details of on-money receipt with respect to sale of each of the plots. Accordingly, the Department initiated proceedings under Section 148 of the Act by issuance of notice dated 27.03.2021 on the assessee. The Department was of the view that the documents found during the course of search at the main office premises of Shri Robin Goenka were self-explanatory in nature and the details were also duly corroborated / supported by the sale deeds executed by the purchasers of plots of industrial scheme viz. Sankalp Industrial Estate Developed by M/s. Saikrupa Developers. The Assessing Officer was of the view that on corroboration of the data found from the office premises of the partner of assessee firm, Shri Robin Goenka at Sankalp House, with the sale deed called by the Department from the office of SRO, it is found that the figures reflecting in the seized material is true. After taking the reply of the assessee on record, the Assessing Officer observed that firstly, the assessee has categorically admitted that the assessee had developed the land and plotted the industrial plots in the name of Sankalp Industrial Estate at Bavla Ahmedabad. Secondly, the evide....
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....ision is uniform for all the assessees of Sankalp Group & its related person/entity and there is no discrimination against any of the assessee. Considering this fact, case of the appellant was appropriately centralised before present Assessing Officer. The case laws relied upon by the appellant are not directly connected with search cases as is the case of the appellant hence same cannot be applied to present case. In view of these facts, it is clearly found that the AO i.e. DCIT, Central Circle-1 (2), Ahmedabad had passed valid assessment order u/s.143(3) r.w.s. 147 of the Act as per his correct jurisdiction. 5.5 In view of these facts, I find no infirmity in the action of the AO in issuing notice u/s.148 of the Act. Therefore, reopening the assessment proceedings of the appellant is upheld. Thus, grounds of appeal no. 1 and 2 are dismissed. 6. The grounds of appeal no. 3, 4, 5 & 6 are interlinked, hence dealt together, are against the action of the AO in making addition of Rs.24,04,282/- on account of on-money receipts. 6.1 I have carefully considered the assessment order and submission filed by the appellant. The brief facts of the case are that the assessee firm had fi....
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...., the same has been discussed in the following paras. 6.3 With regards to satisfaction not recorded by the searched AO, it is stated that satisfaction of searched AO as well as assessee's AO Is required for issuance of notice u/s.153C of the Act. However, in the instant case, the case was reopened by the AO after recording reason for reopening and taken prior approval from the competent authority. Therefore, the claim of the appellant is not correct, hence rejected. 6.4 Further, with regards to incriminating documents was not found from premises of the appellant firm, not prepared by the firm and unsigned, it is observed that the appellant firm is partnership firm in which Shri Robin R. Goenka is one of the key partners with 25% profit sharing ratio. The evidence related to charging on money on sale of industrial plots was found and seized during the course of search action at corporate office of Shri Robin R. Goenka. Therefore, the plea of the appellant firm is not found to acceptable since both the premises of the appellant firm and office premises of main partner of the appellant firm were covered by survey proceedings u/s.133A and Search action u/s.132 of the Act resp....
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....Section 158BC of the Act were set-aside on the ground that while transferring the case of the assessee from one jurisdiction to another within the same city notice under Section 127 was not issued to the assessee. Accordingly, the Counsel for the assessee submitted that the facts of the case cited by the assessee are similar to the assessee's set of facts. In the assessee's case, the original jurisdiction of the assessee was with ITO, Ward-2(3), Ahmedabad and pursuant to search, the case was centralized with Central Circle-1(2), Ahmedabad. The assessee's contention before us is that the order passed by the Assessing Officer is bad in law on the ground that the assessee did not receive any notice under Section 127 of the Act for transferring it's case to Central Circle at Ahmedabad and the assessee was never provided any opportunity, before transferring the case. The assessee has also relied upon order passed by ITAT Ahmedabad in the abovementioned case, with respect to this contention and submitted that the facts of the case relied upon by the assessee are similar to assessee's set of facts, wherein the case of the assessee is that the case law cited by the Counsel for the assessee....
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....ssed by the Board or any such Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorise in this behalf. (3) Nothing in sub-Section (1) or sub-Section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place." 10. Therefore, on perusal of the plain language of Section 127(3), in our view, the case of the assessee is squarely covered by these provisions and there is no statutory requirement of giving any opportunity of hearing to the assessee in terms of Section 127(3) of the Act, when the case of the assessee is transferred from ITO, Ward-2(3), Ahmedabad to Central Circle-1(2), Ahmedabad i.e. within the same city itself. 11. Further, we are also not able to place reliance on the judicial precedent cited by the Coun....
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.... search was not at the premises of a third party as alleged but in the assessment order, Ld. Assessing Officer has specifically noted that search was at the main office / corporate office as key partner of assessee firm itself. Secondly, with respect to this ground of appeal, the counsel for the assessee has raised a legal contention before us that in case certain incriminating material found from the premises of third party then the Department has no option but to proceed only under Section 153C of the Act, after recording the satisfaction and thereafter proceed in terms of Section 153A of the Act in respect of the assessee. The argument of the counsel for the assessee is that once there is a specific Section/provision dealing with cases relating to incriminating material found during the course of search conducted at thirdparty premises, then it is not open to the Department to proceed against the assessee under Section 148 of the Act. This is further embellished by the fact that Section 153C starts with non obstante clause, which effectively ousts the invocation of provisions of Section 148 of the Act. 14. Before analyzing this issue, it would be useful to reproduce the relevan....
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....of the Income-tax Act, 1961, the firm and partnership have the meaning as assigned to them in Indian Partnership Act, 1932, but also includes in them limited Liability partnership as defined under Limited Liability Partnership Act, 2008. Section (2(d) of Limited liability Partnership Act, 2008 defines 'body corporate' as a company as defined under Companies Act, and includes a LLP. Section 3 of Limited Liability Partnership Act, 2008 specifically states that an LLP under the said Act of 2008 will be a body corporate and a legal entity separate from its partners. Though, section 4 of the Limited Liability Partnership Act, 2008 specifically bars the applicability of the Indian Partnership Act, 1932 to a limited liability Partnership, however, the special provisions of the Income-tax Act do not differentiate between a Partnership Firm as defined under the Indian Partnership Act, 1932 and Limited Liability Partnership firm ( LLP) as defined under Limited Liability Partnership Act, 2008 (6 of 2009). The inclusion of the Limited Liability partnership into the definition of firm makes it clear that a firm is separate assessable legal entity and it does not distinguish between a bo....
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....are the profits of the business carried on by all or any of them acting for all and the persons who have entered into partnership with one another is called individually partners and collectively a firm. The contention of the assessee is that the partnership is a relation between 'persons' and that partnership is not a person in itself. The aforesaid contention of the assessee in the light of the specific definition given of the word 'person' under section 2(31) and in view of the discussion made above is misconceived and not tenable.[Para 19]" 16. Therefore, in our considered view, the argument of the Ld. D.R. that the search at the office of the partner would tantamount to a search at the partnership firm itself cannot be sustained. Secondly, it is observed that the search was conducted at the premises of the Sankalp Group, which is a separate entity in which the concerned partner Shri Robin Goenka was also working in the capacity as a Director of Sankalp Organisers Pvt. Ltd. Therefore, the search was clearly at third party premises i.e. on Sankalp Group and not at the premises of the assessee firm. 17. Secondly, regarding the argument of the Counsel for the as....
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....sing Officer had proceeded with reassessment under section 147/148 and passed assessment order under section 143(3), same would be illegal, arbitrary and without any jurisdiction. In the case of Smt. Samanthapudi Lavanya 127 taxmann.com 188 (Visakhapatnam - Trib.), the ITAT held that where no fresh information was collected by Assessing Officer or no information had come to notice of Assessing Officer in normal course other than information collected during course of search from another person, all search assessments were required to be made in case of assessee under sections 153A or 153C, but not under section 147. In the case of Rajat Saurabh Chatterji vs. ACIT (ITAT Delhi)in ITA 2430/Del/2015 dated 20.05.2016, the Tribunal observed that where the AO detects incriminating material in search, he has to be processed only u/s 153C and not u/s 147. A notice u/s.148 to assess such undisclosed income is void ab initio. In the case of Shri Kalyan Buildmart Pvt. Ltd., Jaipur. ITA No. 152 & 153/JP/2018, ITAT held that the reopening under section 147/148 of the Act is not valid when the proper course of action was only to initiate the proceedings under section 153C/153A of the Act in case ....
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....zed during search of another company which showed entries of unsecured loans, course of action was required to be taken under section 153C and not under section 148, and thus, subsequent revisionary proceedings invoked on ground that Assessing Officer failed to make necessary enquiries in reassessment proceedings with respect to ledger account seized were based on invalid order and were without jurisdiction. Reference is also drawn to the judgment/decision of Hon'ble Supreme Court in the case of ITO vs. Vikram Sujitkumar Bhatia, Civil Appeal No. 911 of 2022 (SLP) (C) No. 29096 of 2019 and oths. order dated 06.04.2023 and PCIT vs. Abhishar Buildwell (P.) Ltd., reported in [2023] 149 taxmann.com 399 (SC). 19. In view of the above discussion and in view of the judicial precedents reproduced above, the ground of the assessee challenging the validity of reassessment proceedings under Section 147 is allowed. 20. Since we have upheld the assessee's challenged to jurisdiction of the Assessing Officer in proceedings under Section 147 of the Act, the other grounds of the assessee's appeal have not been adjudicated by us. 21. In the result, Ground No. 2 of the assessee's appeal is allowed.....
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....fit @ 15% of total on money receipts and restricting the addition of on-money receipts to Rs.38,33,385/- and thereby deleting the addition of Rs.2,35,76,035/- without appreciating the fact that no expenses are allowable on the on-money receipts received over and above the document price, and the related expenses were already covered in the document price. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 3. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent." 27. In light of our observations in the preceding part of the order, the appeal of the Department is dismissed. Assessment Year 2019-20 (Assessee's Appeal)(ITA No. 250/Ahd/2023) 28. The assessee has taken the following grounds of appeal: "1. Learned CIT(A) has erred in dismissing the Ground of Appeal of assessee that case of assessee is transferred from Jurisdictional A.O. p Central Circle without obtaining the consent of the assessee U/s. 127 of the Act. Therefore, the order of A.O. is without Jurisdiction. 2. Learned CIT(A) has erred in confirming that no satisfacti....
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....ee failed to provide the details of the cancellation of the booking of the above mentioned plots, and the acceptance of on-money has been duly recorded in the seized documents. 3. In the facts and on the circumstances of the case, in respect of plot No.23, Ld. CIT(A) erred in estimating the net profit @ 15% of total on money receipts and restricting the addition of on-money receipts to Rs.2,89,245/- out of total addition of Rs.25,16,800/- in A.Y. 2020-21, without appreciating the fact that no expenses are allowable on the on-money receipts over and above the document price, and the related expenses were already covered in the document price. 4. In the facts and on the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 5. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent." Ground No. 1-4: CIT(A) erred in deleting addition with respect to four plots which have not been sold by the assessee. 35. The brief facts in relation to this ground of appeal are that during the course of appellate proceedings CIT(A) observed that sale of four plots of land has been ....