TMI Blog2014 (6) TMI 807X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment. - the contention of the assessing that the assessing officer cannot act upon the belated return filed by the assessee on 19-08- 2009 has no merit at all. - Decided against the assessee. Estimation of profit - real estate business - assessee acted as aggregator of land for ETL Infrastructure Services Ltd and Jain Housing Construction Co Pvt Ltd. - Held that:- Taking into consideration the total volume of transactions and the expenditure incurred by the assessee for development of land,etc. this Tribunal is of the considered opinion that estimating the net profit at 1.25% on the receipts from ETL Infrastructure Ltd would meet the ends of justice. - Decided partly in favor of assessee. Estimation of profit - in addition to acting as an agent / facilitator in purchasing the land has to fill up the land, construct compound wall, road, bridge, etc. - Held that:- Since the assessee has to carry out some developmental work on the land like construction of compound wall, bridge, etc. in addition to facilitating the purchase of land the profit ratio would be little more than that of acting a mere broker. The assessee is not a civil contractor. - CIT(A) has rightly taken int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain expenditure as commission paid to M/s NL Properties Developers, salary, office expenses, etc. The assessee has also claimed expenditure for land development. According to the ld.DR, the assessee is getting money in advance from the company for purchasing the land and paid to the respective land owners. Around 800 acres of land was already transferred to the company. Therefore, according to the ld.representative, the assessee has earned profit in these transactions. In the absence of proper books of account, according to the ld.DR, the assessing officer estimated the profit at 5% of the total receipt. However, on appeal by the assessee, the CIT(A) without any basis reduced the profit at 2.5%. 4. Referring to the remand report filed by the Deputy Commissioner of Income-tax, the ld.DR submitted that the commission said to be paid to M/s NL Properties Developers was disallowed since tax deducted was not deposited into the government account. Moreover, the expenses claimed by the assessee was mainly incurred in cash, therefore, it could not be verified by the assessing officer. Therefore, the assessee could have used the expenses claimed either for own purposes or for any ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the assessment in the hands of the assessee u/s 153BC of the Act. According to the ld.representative, the assessing officer issued notice u/s 153BC on 13-02-2009 asking the assessee to file the return of income within 30 days. However, the assessee filed the return of income only on 19-08-2009. Hence, according to the ld.representative, the return filed by the assessee on 19-08-2009 cannot be acted upon. The ld.representative for the assessee further submitted that the assessing officr has not recorded any satisfaction before handing over the seized material or initiating the proceedings in the case of the assessee. Referring to section 153C of the Act, according to the ld.representative, section 153C is in pari materia to section 158BD of the Act. Therefore, recording of satisfaction before initiating the proceedings is mandatory. The ld.representative placed reliance on the unreported decision of the Chennai Bench of this Tribunal in P Sathynarayanan vs ACIT ITA Nos 717, 718 719/Mds/2008 order dated 21-01-2011, the copy of which is filed by the ld.representative for the assessee. On a query from the bench, whether the assessing officer in the cases of Shri K.M.Nassaruddin and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r such other person. (2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, Before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice fixing a time limit for filing the return of income has inherent power to extend the time limit allowed for filing the return of income or modify the date for filing of the return of income. Therefore, the assessing officer has every justification to extend the date of filing of the return even though it was not filed within the time prescribed in the notice issued u/s 153C of the Act. Apart from that in a search proceeding like this, the assessment has to be completed u/s 153A in case of searched person and the person other than searched. Though section 153C mandates satisfaction of the assessing officer, the assessment has to be necessarily completed only u/s 153A of the Act. Therefore, once the assessing officer validly initiated the assessment proceedings on the basis of information and material found during the course of search operation, he can very well consider all the material information available on record including the material found during the course of search operation. Therefore, the belated return filed by the assessee after the expiry of the time limit for filing return of income given is also an information came to the knowledge of the assessing officer in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5% on the total receipts, this Tribunal is of the considered opinion that the assessee has incurred expenditure for development, salary and office expenditure which also has to be taken into consideration while estimating the profit. Therefore, the expenditure incurred by the assessee for maintaining an establishment for doing high volume of transactions is one of the factors which is to be considered. Therefore, this Tribunal is of the considered opinion that estimation of profit at 2.5% by the CIT(A) is also highly excessive. Taking into consideration the total volume of transactions and the expenditure incurred by the assessee for development of land,etc. this Tribunal is of the considered opinion that estimating the net profit at 1.25% on the receipts from ETL Infrastructure Ltd would meet the ends of justice. Accordingly, the orders of the lower authorities are modified and the assessing officer is directed to estimate the net profit at 1.25% on total receipts from ETL Infrastructure Services Ltd. 13. Now coming to transaction with Jain Housing Construction Co Pvt Ltd, the assessing officer estimated the profit at 10% of the total receipts. However, the same was restricte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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