TMI Blog2015 (10) TMI 1858X X X X Extracts X X X X X X X X Extracts X X X X ..... - 11-2-2015 - SHRI G.S. PANNU, ACCOUNTANT MEMBER AND Ms. SUSHMA CHOWLA, JUDICIAL MEMBER For The Appellant : B.C. Malakar For The Respondent : Written submissions ORDER PER SUSHMA CHOWLA, J.M : This appeal filed by the Revenue is against the order of CIT(A)-II, Pune, dated 19.08.2013 relating to assessment year 2010-11 against order passed under section 143(3) of the Income-tax Act, 1961. 2. The Revenue has raised the following grounds of appeal:- 1) The learned Commissioner of Income-tax (Appeals) erred in holding ₹ 40 lacs as business income qualifying for deduction u/s.80IB(10) of the Income tax Act, 1961. 2) The learned Commissioner of Income-tax (Appeals) erred in not appreciating the fact that the assessee in the course of assessment as well as appellate proceedings failed to substantiate its claim and discharge its onus with supporting evidences that the undisclosed receipts of ₹ 40 lacs have originated from the project 'Prime Plus', for which deduction u/s.80IB(10) of the Act has been claimed. 3) The learned Commissioner of Income-tax (Appeals) erred in failing to appreciate that the assessee had tried to claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the assessee claimed that it had made a declaration of an amount received from business, from which various expenditure had been incurred and paid. Another reference was made to the letter dated 23.09.2008 as a sequel and in line with answer to query No.50 and the said letter categorically asserted that the declaration was of undisclosed receipts. The Assessing Officer noted that the assessee had not furnished the information of the customers / clients who had made bookings in the said project of Prime Plus and who had contributed on-money. Further, the Assessing Officer noted that the examination of various statements recorded at the time of search and also subsequent thereto, does not reflect that there was an admission of on-money received, which had not been accounted for in the regular books of account. Further, none of the documents seized at the time of search action, had any notings in connection with the on-money received from the project of Prime Plus. The Assessing Officer also referred to the final statement on oath recorded at the time of search action of Shri Naresh T. Wadhwani on 13.08.2008 under which, declaration of undisclosed income of ₹ 7 crores was ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he premise that the assessee had failed to furnish supporting evidence that the said receipts originated from the project Prime Plus. Against the said observation of Assessing Officer, the finding of CIT(A) was It is undisputed that during the search action in the case of the group led to the fact that the amounts received from customers against the sale of flats was not reflected in the books of account. This also becomes evident from Q.Nos. 50 and 51 of the statement recorded in the course of search action which has been enclosed as a part of the submission dated 02-11-2012 filed by the appellant during the appellate proceedings. A reading of the question and answer of the statement recorded u/s 132(4) and also the letter dated 23-09-2008 makes it clear that the sum of ₹ 40 lacs was declared as receipts from the project 'Prime Plus' for F.Y. 2007-08. The aforesaid statement also reveals the fact that the declaration of ₹ 7 crores has been received as undisclosed receipts from the business of construction and development of the group and it has also been categorically stated by the partner that he would like to verify the seized diary and other papers to confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merits to be accepted. Since the said undisclosed receipts had arisen to the assessee during the course of carrying on its business activities, then the said receipts were the business income. The only issue is whether the said additional income which arises from the business activities carried on by the assessee is eligible to the claim of deduction under section 80IB(10) of the Act. 12. We find that similar issue arose before Pune Bench of the Tribunal in Shri Naresh T. Wadhwani Vs. DCIT, ITA Nos.18, 19 20/PN/2013 (supra) and it was held as under:- 34. We have carefully considered the rival submissions. Factually speaking, it is quite evident that in the course of his deposition u/s 132(4) of the Act on 14.08.2008, assessee declared certain additional incomes for various assessment years, which were hitherto not forming part of the income declared in the regular books of account. The Assessing Officer has further noted that vide a written communication dated 23.09.2008, during postsearch enquiries, assessee furnished a bifurcation of the additional income of ₹ 7 crores, which was admitted by him in the statement recorded during the course of search u/s 132(4) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o dispute to the fact-situation that the profits of the Sai Nisarg Park Mayureshwar project undertaken by the assessee are entitled to the benefits of section 80IB(10) of the Act. 35. In the above background, the moot question is whether such additional income declared in the course of search is eligible for the benefits of section 80IB(10) of the Act, especially when the relevant project is otherwise eligible for the benefits of section 80IB(10) of the Act. 36. In this context, it was a common point between the parties that an identical controversy has been considered by the Pune Bench of the Tribunal in the case of M/s Malpani Estates vs. ACIT vide ITA Nos.2296 to 2298/PN/2012 vide order dated 30.01.2014. The relevant discussion in the order of the Tribunal dated 30.01.2014 (supra) is reproduced hereinafter to facilitate appreciation of reasoning that prevailed with the Tribunal to allow the claim of assessee therein :- 10. In the present case, it is not in dispute that the assessee has derived income from undertaking a housing project, The Crest at Pimple Saudagar, Pune, which is eligible for section 80IB(10) benefits. In the return of income originally fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 of the Act because according to her such income is liable to be assessed under the head income from other sources. Thus, as of now, before us the inference of the Assessing Officer does not survive any longer since the order of the Assessing Officer has merged in the order of the CIT(A) and in any case the Revenue is not in appeal on this aspect. Be that as it may, factually speaking, it cannot be denied that the additional income in question relates to the housing project, The Crest at Pimple Saudagar, Pune undertaken by the assessee. The material seized in the course of search; the deposition made by the assessee s partner during search u/s 132(4) of the Act; and, also the return of income filed in response to notice issued u/s 153A(1)(a) of the Act after the search, clearly show that the source of impugned additional income is the housing project, The Crest at Pimple Saudagar, Pune. The aforesaid material on record depicts that the impugned income is nothing but unaccounted money received by the assessee from customers on account of sale of flats of its housing project, The Crest at Pimple Saudagar, Pune. Clearly, the source of the additional income is the sale of fla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oval of doubts, it is hereby declared that, - (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section. 14. In terms of the above referred clause (i) of the Explanation, it is evident that all the provisions of the Act shall apply to an assessment made u/s 153A of the Act save as otherwise provided in the said section, or in section 153B or section 153C of the Act. In the background of the expression all other provisions of this Act shall apply contained in Explanation (i) below section 153A of the Act, and in the context of the controversy before us, the moot point to be examined is as to whether or not deductions enumerated in Chapter VIA of the Act are to be considered in making an assessment made u/s 153A(1)(b) of the Act. Section 153A(1)(b) of the Act requires the Assessing Officer to assess or reassess the total income of the assessment years specified therein. Ostensibly, section 80A(1) of the Act prescribes that in computing the total income of an assessee, there shall be allowed from his total income the deductions specified in Chapter VIA of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come originally filed. According to the Hon ble Supreme Court, the claim was not entertainable because the said claim not connected with the assessment of escaped income. In-fact, the judgment of the Hon ble Supreme Court in the case of Sun Engineering Works Pvt. Ltd. (supra) is not an authority to say that assessee cannot raise a claim pertaining to an issue which is connected to the assessment of escaped income. In-fact, if a claim which is connected to the escaped income is set-up before the Assessing Officer in the course of re-assessment proceedings, the same is liable to be considered and the judgment of the Hon ble Supreme Court in the case of Sun Engineering Works Pvt. Ltd. (supra) only precludes such new claims by the assessee which are unconnected with the assessment of escaped income. In the present case, we are dealing with an assessment u/s 153A of the Act and the scope of such an assessment has already been examined by us in the context of the relevant specific provisions, which do not leave any scope for ambiguity. The judgment of the Hon ble Supreme Court in the case of Sun Engineering Works Pvt. Ltd. (supra) has been rendered on a different footing and is strictly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 80IB(10) benefits, even as per the ratio of the judgment of the Hon ble Bombay High Court in the case of Gem Plus Jewellery India Ltd. (supra). 19. In the result, on the basis of the aforesaid legal position and the material and evidence on record, assessee is eligible for deduction u/s 80IB(10) of the Act in relation to impugned additional income offered in a statement u/s 132(4) of the Act in the course of search and subsequently declared in the return filed in response to notice u/s 153A(1)(a) of the Act. In the result, appeal of the assessee for assessment year 2008-09 is allowed. 37. In view of the legal position explained in the above precedent and the material and evidence on record, assessee is eligible for deduction u/s 80IB(10) of the Act even in relation to impugned additional income offered in a statement deposed u/s 132(4) of the Act during the course of search and subsequently declared in the return of income filed in response to notice u/s 153A(1)(a) of the Act. Thus, assessee s claim for deduction u/s 80IB(10) of the Act in relation to the impugned additional income of ₹ 60,00,000/- is liable to be upheld. 13. The issue in the present ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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