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2014 (6) TMI 442 - AT - Income TaxValidity of assessment u/s 153C of the Act – wrong description of the designation in the notice - Held that:- The search was conducted in the premises of Mohiyuddin is none other than the director of both the companies - Shri Mohiyuddin was described as managing director in the assessment order -mere wrong description of the designation cannot be a reason to frustrate the order of assessment - these are rectifiable u/s 292B of the Act - the assessees cannot take advantage on this kind of mistakes. Jurisdiction for assessment – transfer of case - Held that:- The transfer was made after giving due notice to the assesseess as required u/s 127 of the Act for consolidating enquiry / investigation - Once the authorities followed the due process for transferring the case from one city to another for the purpose of effective investigation and completion of the assessments by one AO, the Tribunal is of the considered opinion that the contention of the assesseess has no merit at all - the present AO, who completed the assessment order has jurisdiction in pursuance to the order passed by the concerned authority transferring the case u/s 127 of the Act. Original assessment made u/s 153C r.w. section 153A of the Act – Order not passed u/s 153A of the Act – Held that:- The present assessees are persons other than searched person - the proceedings had to be initiated u/s 153C of the Act - after initiating proceedings u/s 153C of the Act, the assessment proceedings have to be completed only as per the procedure laid down in section 153A of the Act - merely because there was an omission to mention the relevant provision of law or wrong mentioning of the provisions of law that cannot be a reason to invalidate the assessment order passed by the AO. Satisfaction not recorded before transferring the file – Proceedings initiated u/s 153C of the Act – Held that:- Following Manish Maheshwari vs Assist.Commissioner of Income-tax & Anr [2007 (2) TMI 148 - SUPREME COURT OF INDIA] - when the AO is same for the person searched and person other than searched recording of satisfaction may not be necessary since there is no necessity for handing over the assessment records to the other officer - the same AO has completed the assessment in the case of Shri Mohiyuddin – thus, there is no necessity for the AO to handover the document to another AO - recording of satisfaction may not be necessary. Rejection of claim of development expenses – Held that:- The vendor has to fill up the land with red earth and make it clean so as to suitable for measurement, etc. - the obligation of the vendor is to make the land suitable for measurement by the surveyor - It is nothing more than that - when the assessees claim that the land was filled up with red earth and made ready so as to make it saleable one, the claim of the assessee has to be examined on merit - The obligation of the vendor is to make the land suitable for measuring - there is a lot of distinction between the obligation of the vendors - Merely because the vendors claimed much expenditure for filling up the land that cannot be a reason to disallow the claim of the assessees especially when documentary evidences are available which were found during the course of search operation. It is for the revenue to rebut that the material found during the course of search operation does not relate to the expenditure incurred by the assessees - the claim of the vendors was accepted without any verification with regard to source for investment and genuineness of the expenditure - merely because the vendors claimed expenditure @18,000 per cent for filing up the land that alone cannot be a reason for disallowing the claim of the assessees - the expenditure for filling up the land to make it saleable condition was incurred by the assessees, therefore, the expenditure has to be allowed in the hands of the present assessees – there was no justification on the part of the AO in disallowing the claim of the assessees - both the assessees have incurred the expenditure for filling up the land with red earth so as to make it saleable – the AO is not justified in disallowing the claim of the assessees - CIT(A) ought to have allowed the entire expenditure instead of restricting the same – thus, the order of the AO is modified and the AO is directed to set aside the entire addition on account of development expenditure claimed in the hands of both the assessees – Decided in favour of Assessee.
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