Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (5) TMI 1461 - AT - Income TaxAssessment u/s 153C - additional grounds of appeal stating that assessing officer has not recorded the satisfaction note before issue of notice u/s 153C therefore, proceedings becomes invalid - Disallowance of premium payable for all the years for cost of improvement , indexation benefit on conversion taxes paid by assessee and indexation benefit as expenses incurred for transfer of land not allowed to assessee - HELD THAT:- We have heard both the parties on this legal issue and note that Assessing Officer should provide the satisfaction note that to the assessee, and if the Assessing Officer fails to do so, then in that situation assessment proceedings would became illegal and void ab initio, as held by the jurisdictional Hon'ble Gujarat High Court in the case of Munisuvrat Corportion (2019 (7) TMI 1447 - GUJARAT HIGH COURT). The premium was paid by the assessee by account payee cheque to the government. Taxes paid by assessee for the purpose of conversion of agricultural land to non-agricultural land cannot be incriminating material, because these taxes were paid by the assesse to the Government as per Government rules. Therefore, amount paid to Government, has already been disclosed by the assessee. The premium paid or payable to Government cannot be incriminating material, as necessary records are with the Government and assessee. Land Revenue paid by the assessee and amount paid to two trusts should not be incriminating material, as these payments were disclosed by the assessee. Therefore, no addition/disallowance can be made by the AO without the aid of incriminating material seized/unearthed qua the assessee. We note that assessments were not pending on the date of search, no addition/disallowance can be made by the AO without the aid of incriminating material found/unearthed during search. Since the assessments were not pending on the date of search and no incriminating material qua the assessee was the basis for the addition/disallowance, so we allow the appeal of the assessee. AO did not allow index cost of acquisition in respect of land revenue, premium paid/payable, and payment to trusts. We note that these expenses were already on record and paid by the assessee to the Government. However, a part of the premium is still payable by assessee. The assessee did not hide any expenditure. It is also not the case of the assessing officer that assessee has paid land revenue, premium etc. to the Government out of unaccounted income. Therefore, search team did not find any new material, hence without incriminating material, the addition should not be made. We also note that assessee has not been provided satisfaction under section 153C of the Act, hence assessment framed by the assessing officer becomes invalid. Therefore, we delete the additions for assessment years 2004-05 to 2007-08. Since, we have allowed the appeal of the assessee, based on the alternative plea raised by the ld Counsel that no incriminating material were unearthed by the search team during the search action, therefore, we do not deal with other arguments made by the ld Counsel on merits. Appeals filed by the assessee are allowed.
|