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2023 (8) TMI 1188 - AT - Income TaxAssessment u/s 153C - mandation of recording of satisfaction note by AO of searched person - HELD THAT:- As no satisfaction note has been recorded by AO of searched person i.e., Shri Madanlal D. Chawla but the same has been recorded only in case of assessee for whom an assessment has been framed u/s 153C. Thus, the undisputed position that emerges is that no satisfaction note has been recorded by AO in case of searched person - The argument of Ld. CIT-DR is that since AO of searched person as well as the AO of the assessee is one and the same person, it is sufficient compliance of law if the satisfaction note is recorded in either of the case. Thus recording of satisfaction note by AO of searched person is mandatory but vice versa may not be true. The primary requirement is that AO of the searched person should record satisfaction before transmitting the record to other person having jurisdiction over such other person u/s 158BD. This requirement would apply even if AO of searched person as well as other person is one and the same. Such a satisfaction note could be prepared by AO of searched person at various stages of framing of assessment u/s 158BC. Therefore, in our considered opinion, in the absence of satisfaction note in the case of searched person, the proceedings u/s 153C would be vitiated by law. The recording of satisfaction note in the case of present assessee is not sufficient compliance of law. When proceedings are proposed to be initiated u/s 153C against the "other person", it has to be preceded by a satisfaction note by the Assessing Officer of the searched person. Without fulfilling this requirement, no jurisdiction could be acquired u/s 153C. Gain on sale of land - HELD THAT:- The assessee has purchased the plots in joint ownership with Shri Sanjay Chawla. Therefore, we direct Ld. AO to adopt sale rate of Rs. 400/- per Sq. ft. Assessment of income - Head of income - We find that the assessee has consistently developed and sold plot of lands. The intention was to develop and sell the land as real estate dealer. The assessee has also incurred development expenses for plotting out the land and selling the same. The land has been sold as vacant house sites and not as single tract of land. The land has been purchased jointly with Shri Sanjay Chawla who is into real estate business. For all these reasons, the income has rightly been assessed as ‘Business Income’. We order so
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