2022 (4) TMI 1609 - ITAT BANGALORE

Validity of assessment u/s 153A - additions in respect of the agricultural lands - reference to incriminating material found in serach or not? - HELD THAT:- As decided in Shri Jitendra Virwani [2021 (8) TMI 70 - ITAT BANGALORE] as rightly contended by the DR, there is no requirement for an assessment made u/s 153A of the Act being based on any material seized in the course of search. Further under the second proviso to section 153A pending assessment or re-assessment proceedings in relation to any assessment year falling within the period of six assessment years referred to in section 153A(b) of the Act shall abate. Thus the Assessing Officer gets jurisdiction for six years assessment years referred to in section 153A(b) of the Act for making an assessment or re-assessment.

It is not the complaint of the assessee that any income, which is already subjected to assessment under section 143(3) or under section 148 of the Act completed prior to the search in respect of six assessment years referred to in section 153A(b) of the Act and in the second proviso to section 153A, has also been included in the assessment framed under section 153A of the Act. In such circumstances the plea of the assessee cannot be accepted.

In our considered opinion, as per clause (a) of sub section (1) of section 153A, at the stage of issue of notice u/s 153A, the only requirement is to ask the assessee to file return of income for relevant six years covered by section 153A and after filing of return of income, the assessment to be made by the AO will be assessment or reassessment has to be determined afterwards and not at the time of issue of notice u/s 153A. In this view of the matter, we find no merit in this technical objection raised by the assessee and the same is rejected.

Accordingly, the action of the AO in issuing notice u/s. 153A is justified. This ground of the assessee is therefore dismissed.

Nature of land sold - Addition in respect of transfer of land by Based on the documents found during the search in the Appellant’s group cases - What is sold by Appellant is agricultural and hence gains are outside the purview of capital gains tax? - HELD THAT:- As assessee was continuously carrying out agricultural activities in the impugned land and also offered agricultural income - This agricultural income offered by the assessee has been accepted and assessed in these assessment years. Contrary to this, the lower authorities are not ready to accept the sale of said land as agricultural land. The sale of land is to be treated as sale of agricultural land since there was continuous agricultural operations in the said land and though the land was converted, the land remained as agricultural land till sale of the same - we allow the ground taken by the assessee in both A.Ys.