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2022 (5) TMI 1487 - AT - Income TaxAssessment u/s 153C - Material found, was not hitherto undisclosed to the income tax department & income there from was also disclosed to the department - HELD THAT:- This argument of the Ld. A.R. holds no merit since the provisions of section 153C do not discuss that seized material should be incriminating in nature or undisclosed in nature for pending assessment. It says only about any material, articles, things, books of accounts, documents seized or requisitioned that belongs to or pertains to person other than the searched person. In our opinion, there were seized material procured during the course of search action in the case of Srinivasa Trust on 6.8.2012. Therefore, framing assessment thereafter u/s 153C of the Act is valid and the question of abatement or non-abatement do not arise since there are seized material. Accordingly, the argument of the assessee’s counsel that the assessment for the assessment year 2010-11 & 2011-12 do not abate on 30.8.2013 is incorrect and the ratio laid down in the case of Delhi International Airport Ltd. cited [2021 (11) TMI 928 - KARNATAKA HIGH COURT] do not come into assistance of assessee since there is seized material. Accordingly, the issue of framing of assessment u/s. 153C of the Act is upheld and order of the CIT(Appeals) is reversed on this issue. Capital gain - land which is subjected to Joint Development is Stock In Trade of the assessee - when the ownership in these lands held as stock in trade gets actually transferred from the Respondent? - The Respondent has so far declared a Total Taxable income of Rs. 435,43,56,426/- which includes a sum of Rs. 310,96,66,066/-as Income from Business & Rs.124,46,90,420/- as Income from Long Term Capital Gain which are income arising out of the JDA on upto A.Y. 2020-21. The assessee has paid the due taxes & assessments are completed for most of the years except A.Y. 2020-21, which is in progress. The details of the Returns filed for the A.Y’s 2012-13 to 2020-21 & a consolidated chart showing income declared under the heads Business Income & Long Term Capital Gains, year wise, arising out of the Project is also filed separately before this Tribunal. This proves that there is no intention on the part of the assessee not to disclose income from the JDA but that the assessee is declaring the same in accordance with law. Any addition made in A.Y. 2010-11 & 2011-12 would amount to double addition & double collection of taxes on the very same income. Disallowance u/s 14A applying rule 8D (2)(ii) & (iii) - It is now a settled law that any disallowance of expenditure u/s section 14A by applying rule 8D (2)(ii) & (iii) cannot exceed the income earned from the said investment. In the present case the income earned is NIL and hence no expenditure can be disallowed - we deem it appropriate to remand the issues on merits to the CIT(Appeals) to be decided in accordance with law. CIT(Appeals) is directed to pass a detailed order on merits independently based on evidence filed qua each addition for the assessment years under consideration, after providing opportunity of being heard to the assessee as well as the AO.
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