TaxTMI 
TaxTMI 
2026 (6) TMI 1314
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....n the case of Sahara City Homes Anand against the order of the NFAC dated 12.02.2024 for assessment year 2011-12. (c) In ITA No. 365/LKW/2024 in the case of Sahara City Homes Karnal against the order of the NFAC dated 03.04.2024 for assessment year 2011-12. The assessee (Sahara City Homes Karnal) has filed Cross Objection bearing C.O. No. 21/LKW/2024 in ITA No. 365/LKW/2024 in support of the order of the Ld. First Appellate Authority. 2.0 Since the facts and the issues involved in the above captioned appeals are almost identical, therefore, they were taken up together for hearing and are being disposed of through this common order for the sake of convenience. 3.0 First, we will deal with the issues involved in the case of the assessee (Sahara City Homes Karnal) in ITA No. 365/LKW/2024 for assessment year 2011-12. The brief facts are that the assessee-firm was constituted with the objects of carrying on business of Construction, Development of Township, Housing Projects and other Reality Projects. The assessee-firm was formed on 28.03.2011 and at the time of formation of the firm, it had eight partners. Out of the eight partners, six partners contributed their land....
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.... in the partnership firm. The AO noted that in the partnership deed, nothing was mentioned about the WIP of SPCL, as to what may be taken over as the WIP of the SPCL and how and on what basis the WIP of SPCL was taken over by the firm. The AO further noted that the assessee did not produce any document, which may prove the genuineness and value of the WIP taken over by the assessee and that neither any details regarding the valuation of the WIP nor any document regarding as to how and on what basis the WIP of Rs. 30,05,39,913/- was taken over from the partner company SPCL was produced by the assessee. The AO, therefore, treated the same as unexplained expenditure of the assessee and, accordingly, added Rs. 30,05,39,913/- to the total income of the assessee under section 69C of the Act. 3.2 The AO also noted that the assessee had booked 'Customer Advances' at Rs. 1,38,85,586/- under the head 'Current Liabilities' and from a perusal of the Journal Register, it was noticed by the AO that the Customer Advances were taken over from the company, M/s Sahara Prime City Ltd. (SPCL) and nothing, in this regard, was mentioned in the Partnership deed dated 28.03.2011. According to t....
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....This direction is issued u/s. 150(2) of the I.T. Act as the notice u/s. 148 of the I.T. Act for A.Y. 2011-12 could have been issued at the time when the assessment order for A.Y. 2012-13 was passed by the AO". 6.3 The directions issued by the Id. CIT(A) Varanasi are expunged by the Hon'ble ITAT, Lucknow vide its order No. ITA No. 36/LKW/2019 dated 31.01.2022. Hence, since the very basis on which notice u/s. 148 of the Act dated 28.02.2019 was issued does not survive, the notice u/s. 148 of the Act also does not survive. It is also noted that notice u/s. 148 dated 28.02.2019 was issued beyond the time limit prescribed in Sec. 149 of the Act for issue of notice u/s. 148 in view of directions issued u/s. 150(2) by the CIT(A). Without the directions u/s. 150(2) of the Ld. CIT(A), the AO could not have issued notice u/s. 148 in the case of the assessee after 31.03.2018 for the AY 2011-12. As the notice u/s. 148 in the case of the assessee for the AY 2011-12 was issued beyond the time limit prescribed in Sec. 149 of the Act, notice u/s. 148 is void ab initio in view of the order in ITA No. 36/LKW/2019 dated 31.01.2022 of the Hon'ble ITAT, Lucknow and hence, the order pas....
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.... the facts of the case in not adjudicating the addition made under section 68 of Rs. 1,38,85,586/-being cash credit relating to customer advances on merit as no substantial evidence has been produced by the assessee 6. That the Ld. CIT(A) erred in law as well as on the facts of the case in not adjudicating the addition made under section 68 of Rs. 1,38,17,486/-being cash credit relating to customer advances on merit a no substantial evidence has been produced by the assessee. 7. The appellant craves leave to add or amend the grounds of appeal as and when need of doing arises. 3.7 On identical set of facts, as narrated above in the case of Sahara City Homes Karnal in ITA No. 365/LKW/2024 for assessment year 2011-12, in other cases of the assessee's also similar additions were made by the AO. 3.8 In the case of Sahara City Homes, Kanpur-1 in ITA No. 127/LKW/2025, the AO completed the assessment under section 143(3) of the Act read with section 147 of the Act, computing the income of the assessee as under: Returned Income/loss (-) Rs. 2,758/- Addition u/s. 69C of the Act Rs. 1,36,95,77,732/- Addition u/s. 69C of the Act Rs. 27,51,68,885/- A....
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....and during the course of the hearing. GROUNDS IN ITA No. 176/LKW/2024: 1. That the Ld. CIT(A) erred in law as well as on the facts and circumstances of the case in allowing appeal of the assessee without appreciating that under provisions of section 251(c), the CIT(A) had power to pass such orders in the appeal as he thinks fit. 2. That the Ld. CIT(A) has not appreciated the facts of case that the AO reopened the case u/s. 147 on the specific direction of the CIT(A) and therefore cases relied upon to expunge the direction of the CIT(A) are distinguishable on facts and law in the instant case of the assessee. 3. That the Ld. CIT(A) erred in law as well as on facts of case in not adjudicating the addition made under section 69C of Rs. 27,65,14,573/- being unexplained expenditure of carried forward work in progress (WIP) on merit as no substantial evidence has been produced by the assessee, on the hypothetical ground that the section 68 and 69C have no interplay with valuation of the work in progress. 4. That the Ld. CIT(A) erred in law as well as on the facts of the case in not adjudicating the addition made under section 68 of Rs. 29,51,815/-be....
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.... had held that the direction issued by the Ld. First Appellate Authority to reopen the assessment for the year under consideration was unsustainable and accordingly he quashed the assessments and allowed the appeal of the assessee. The Ld. A.R. submitted that the Ld. First Appellate Authority has rightly quashed the assessments and, therefore, no interference is called for in the orders of the AO. 7.0 We have heard the rival submissions and have also perused the material on record. The facts are not in dispute. The Ld. CIT(DR) has also accepted that the order of the Tribunal vide dated 31.01.2022 was on identical set of facts as in the present appeals filed by the Department. It has also been informed by the Ld. CIT(DR) that the Department has not filed any appeal against the above said order dated 31.01.2022 passed by the Co-ordinate Bench of this Tribunal in ITA Nos. 24 to 39/LKW/2019. Therefore, there is no doubt that the above said order of the Tribunal has attained finality and, therefore, the Ld. CIT(A) was right in his approach to have allowed relief to the assessee following the above said orders of the Tribunal. 7.1 For the sake of completeness, the relevant extract ....
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....t Chatterjee in ITA no. 565/Kol/2013 dated 10.11.2017 (ABP 672-679). f. Order of the ITAT, Indore Bench, in the case of ACIT v. Shri Mukesh Sharma and others in ITA(SS) no, 88/Ind/2013 dated 04.06.2019/(ABP 680-712). g. Order of the ITAT. Delhi Bench in the casey Thakur v. DCIT in ITA no. 3785/DeS/2015 dated 12.07.2018 (ABP 713-720). (II) The CIT(A), after confirming the addition in the year under consideration, cannot hold that the income has escaped assessment in the preceding assessment year, 78. It is contended that once the addition has been made as well as confirmed in A.Y. 2012-13, it cannot be said that the impugned additions constitute "escaped income" for A.Y. 2011-12, warranting issue of notice under section 148 of the Act, and that too, so as to make protective additions. Therefore, the direction issued by the CIT(A) is bad in law. In this respect, reliance has been placed on the following decisions: a. KIIC Investment Company v. DCIT [101 taxmann.com 19 (Mum)) (ABP 730-738). b. DCIT v. Bullion Investments & Financial Services (P.) Ltd. 123 ITD 568 (Bang)) (ABP 739-745). (III) The direction given by the CIT(....
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....served that the expressions "finding" and "direction", in Section 153(3) were limited in meaning. The Supreme Court observed that a finding given in an appeal, revision or reference, arising out of assessment must be a finding necessary for the disposal of the particular case, that is to say, in respect of the assessee and in relation to the particular assessment year, to be a necessary finding, the Supreme Court observed, that it must be directly involved in the disposal of the case; it was possible in certain cases that in order to render a finding in respect of A, a finding in respect of B might be called for, for instance where the facts showed that the income could belong to either A or B and to none else, a finding that it belonged to B or did not belong to B, would be determinative of the issue as to whether it could be taxed as A's income; a finding respecting B was initially involved as a step in the process of reaching the ultimate finding respecting A: if, however, the finding as to A's liability could be directly arrived at without necessitating a finding in respect of B, then a finding made in respect of B was an incidental finding only and it was not a finding....
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....ections to reopen the case of the earlier year, the Tribunal referred to the power of the Id. CIT(A) under section 251 of the Act, and following the decision of the Hon'ble Supreme Court in the case of 'ITO vs. Murlidhar Bhagwan Das' (supra), it categorically held that the Id. CIT(A) has no power under the provisions of the law for giving any direction to the Assessing Officer for reopening of the assessment. It was further held that the appeal before the Id. CIT(A) is confined to the particular assessment year which is before him. 88. The Indore Bench of the Tribunal, in the case of 'ACIT vs. Mukesh Sharma' (supra), held that the Id. CIT(A) has powers to decide the appeal against the assessee, of a particular assessment, which he may confirm/reduce or enhance or annul. The order of the assessment relates to a particular assessment year or assessment years. The Id. CIT(A) is bound to adjudicate the issues emanating from the appeal for the respective assessment years. Giving directions to the Assessing Officer to consider for re-assessment for other assessment year/s, for which, no appeal is pending before the Id. CIT(A), is out of his/her jurisdiction. ....
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....noted that notice u/s. 148 dated 28.02.2019 was issued beyond the time limit prescribed in Sec. 149 of the Act for issue of notice u/s. 148 in view of directions issued u/s. 150(2) by the CIT(A). Without the directions u/s. 150(2) of the Ld. CIT(A), the AO could not have issued notice u/s. 148 in the case of the assessee after 31.03.2018 for the AY 2011-12. As the notice u/s. 148 in the case of the assessee for the AY 2011-12 was issued beyond the time limit prescribed in Sec. 149 of the Act, notice u/s. 148 is void ab initio in view of the order in ITA No. 36/LKW/2019 dated 31.01.2022 of the Hon'ble ITAT, Lucknow and hence, the order passed u/s. 143(3) rws 147 dated 25.12.2019 on the basis of such notice also becomes void ab initio. Hence, Ground No. 2 and the additional ground raised by the appellant challenging the validity of notice u/s. 148 of the Act and reassessment proceedings are allowed. It is held that notice u/s. 148 of the Act dated 28.02.2019 was void ab initio and hence, the reassessment order u/s. 147 rws 143(3) of the Act dated 25.12.2019 passed on the basis of such notice is also void ab initio. 6.4 Since the re-assessment proceedings itself had been ....