TaxTMI 
TaxTMI 
2014 (11) TMI 1307
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....er appeals also except the quantum of amount :- 1. The learned CIT(A) erred on facts and in law in bringing to tax an amount of Rs.40 lacs as income based on the disclosure of advance received against booking while disregarding the accounting policy for revenue recognition according to which it was taken into account in A. Y. 10-11. 2. The learned CIT(A) erred on facts and in law in not treating the amount of Rs.40 lacs as eligible for deduction u/s 80IB(10), as the income was derived from a project qualifying for a claim of deduction u/s 80IB(10) of the Income Tax Act, 1961. 3. Without prejudice to the above, the learned CIT(A) has erred on facts and in law in bringing to tax the entire receipts as income without a corresponding deduction for expenditure emanating from the same seized material. 4. The appellant craves leave to amend or alter any of the grounds of appeal or add to the same, if deemed necessary. 4. The learned Authorized Representative for the assessee pointed out that the issue raised in the present appeal is squarely covered by the order of Tribunal in the case of associated person Shri Naresh T Wadhwani Vs. DCIT in ITA Nos.1....
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....uting the housing project, profits of which qualify for deduction under section 80IB(10) of the Act, the income was shown at Rs.Nil. The Assessing Officer observed that the income declared under section 132(4) of the Act on the basis of seized material was undisclosed income and even where the assessee was eligible for the deduction under section 80IB(10) of the Act, the undisclosed income would not be entitled to claim deduction under section 80IB(10) of the Act. Consequently, sum of Rs.40 lakhs was added to the total income of the assessee as income from undisclosed sources. The CIT(A) upheld the order of Assessing Officer in view of similar claim being decided in the case of Shri Naresh T. Wadhwani by the CIT(A) himself. 7. The assessee is in appeal against the said order of CIT(A). 8. We find that similar issue of eligibility to claim the deduction under section 80IB(10) of the Act in respect of the additional income offered by the assessee arose before the Tribunal in Shri Naresh T. Wadhwani Vs. DCIT (supra) and the claim of the assessee was held to be eligible vide order dated 28.10.2014. The relevant findings of Tribunal are as under :- "34. We have carefully ....
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.... order u/s 154 dated 18.04.2011 (supra), it would be appropriate to deduce that the source of the impugned additional income is the housing project, Sai Nisarg Park -Mayureshwar, which has been executed by the assessee in his proprietary concern, M/s Mangalmurti Developers. In other words, factually speaking, the income represented by the impugned sum of Rs.60,00,000/- has been earned by the assessee in the course of development and execution of housing project, Sai Nisarg Park - Mayureshwar, though such income was hitherto not reflected in the regular books of account. Further, there is no dispute to the fact- situation that the profits of the Sai Nisarg Park - Mayureshwar project undertaken by the assessee are entitled to the benefits of section 80IB(10) of the Act. 35. In the above background, the moot question is whether such additional income declared in the course of search is eligible for the benefits of section 80IB(10) of the Act, especially when the relevant project is otherwise eligible for the benefits of section 80IB(10) of the Act. 36. In this context, it was a common point between the parties that an identical controversy has been considered by the ....
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....nature of such income, which according to the Assessing Officer "does not fall under of the any heads of income as described u/s 14 of the I.T. Act". In coming to such conclusion, he has disagreed with the stand of the assessee that such additional income was a 'business income' of the assessee relating to the housing project, 'The Crest' at Pimple Saudagar, Pune. However, as per the CIT(A), the income in question is assessable under the head 'income from other sources'. Ostensibly, the CIT(A) has not agreed with the inference of the Assessing Officer that the impugned income does not fall under any heads of income u/s 14 of the Act because according to her such income is liable to be assessed under the head 'income from other sources. Thus, as of now, before us the inference of the Assessing Officer does not survive any longer since the order of the Assessing Officer has merged in the order of the CIT(A) and in any case the Revenue is not in appeal on this aspect. Be that as it may, factually speaking, it cannot be denied that the additional income in question relates to the housing project, 'The Crest' at Pimple Saudagar, Pune undertaken by the....
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....the assessee. On the basis of aforesaid reasons, the claim of the assessee has been opposed. 13. Sections 153A to 153C of the Act contain provisions relating to assessments to be made in cases where search is initiated u/s 132 or a requisition is made u/s 132A of the Act after 31st May, 2003. Clause (b) of sub-section (1) of section 153A postulates assessment or re-assessment of total income of six assessment years preceding the assessment year relevant to the previous year in which such search is conduced or requisition is made. Shorn of other details, it would suffice for us to notice clause (i) of the Explanation below section 153A(2) of the Act, which reads as under :- "Explanation. - For the removal of doubts, it is hereby declared that, - (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section." 14. In terms of the above referred clause (i) of the Explanation, it is evident that all the provisions of the Act shall apply to an assessment made u/s 153A of the Act save as otherwise provided in the said section, or in section 153B or se....
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....enied the claim of deduction and in any case, the claim was initially made in the return originally filed, which was duly accompanied by the prescribed audit report. 16. The argument set-up by the learned Departmental Representative on the basis of the judgment of the Hon'ble Supreme Court in the case of Sun Engineering Works Put. Ltd. (supra), in our view, is also untenable having regard to the facts of the present case. No doubt the Hon'ble Supreme Court has observed that reopening of an assessment u/s 147/148 is for the benefit of the Revenue. In the case before the Hon'ble Supreme Court, assessee wanted to set-off loss against the escaped income which was taxed in the re- assessment proceedings and the claim of such set-off was not made in the return of income originally filed. According to the Hon'ble Supreme Court, the claim was not entertainable because the said claim not connected with the assessment of escaped income. In-fact, the judgment of the Hon'ble Supreme Court in the case of Sun Engineering Works Put. Ltd. (supra) is not an authority to say that assessee cannot raise a claim pertaining to an issue which is connected to the assessment of....
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....negate the assertion of the assessee, which are borne out of the material on record, that the additional income in question has been received in the course of carrying on its business activity of developing the housing project, 'The Crest' at Pimple Saudagar, Pune, which is eligible for section 80IB(10) benefits. Therefore, in terms of the parity of reasoning laid down by the Hon'ble Bombay High Court in the case of Sheth Developers (P) Ltd. (supra), the claim of the assessee is justified. 18. In-fact, once it is factually explicit that the additional income in question is derived from the housing project, 'The Crest' at Pimple Saudagar, Pune, which is eligible for section 80IB(10) benefits, such an income merely goes to enhance the 'business income' derived from the eligible housing project and shall be entitled for section 80IB(10) benefits, even as per the ratio of the judgment of the Hon'ble Bombay High Court in the case of Gem Plus Jewellery India Ltd. (supra). 19. In the result, on the basis of the aforesaid legal position and the material and evidence on record, assessee is eligible for deduction u/s 80IB(10) of the Act in re....