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Prathima Estates Ltd. Versus Asst. Commissioner of Income-tax, Central Circle – 1, Hyderabad

2016 (5) TMI 721 - ITAT HYDERABAD

Assessment proceedings u/s 153A - claim of deduction u/s 80GGB and 80G(5) because it was not claimed in the original return. - whether deduction which had not been allowed while processing the return can be allowed in the return furnished in response to the notice u/s 153A? - Held that:- The assessee had already claimed the deduction before completion of the assessment and also filed rectification petition before the AO much before initiation of search and seizure operation. In our considered vi .....

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aim that there was some hitch in claiming the above deduction while filing the return of income and also assessee has valid documents to prove that the deduction is legitimate. Since, assessee failed to claim this deduction before completion of the regular assessment, assessee cannot claim the same in assessment proceedings u/s 153A - Decided partly in favour of assessee - ITA No. 1147/Hyd/2015 - Dated:- 7-4-2016 - SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER .....

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s Prathima Educational Society. The assessee is also one of the related persons with the group. Subsequent to the search, notice u/s 153A was issued and in response to the same, the assessee filed its return of income on 04/11/2010 admitting an income of ₹ 2,56,42,090/-.The AO completed the assessment in pursuance to the said return of income. 2.1 The Assessing Officer noticed from the computation of income filed with the return u/s l53A that the appellant had claimed deduction of ₹ .....

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of search and the section was not a tool to reduce income which otherwise had not been detected as a result of search. 3. On an appeal before the CIT(A), during the course of appellate proceedings, the appellant has submitted that from AY 2007-08 onwards, the return filing was mandated to be filled in an electronic form only. It was submitted that the return preparation required separate software and the content of the return and e-mode of filling of Income Tax return was technical and certainl .....

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e filed on 30-9-2008, the appellant had shown a total income of ₹ 2,58,92,086/-. He had claimed a deduction of ₹ 3,00,000/-. The return was processed on 25-7-2009 on a total income of ₹ 2,61,92,090/- only, meaning thereby he was not allowed any deduction for ₹ 3,00,000/-. He noted that subsequently, a search took place in the assessee group of cases on 10-9-2009 and in response to the notice u/s 153A, the appellant filed its return of income admitting an income of ₹ .....

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llowed while processing the return can be allowed in the return furnished in response to the notice u/s 153A of the IT Act. The appellant cannot use the search assessment as a tool/opportunity for getting the benefit which was otherwise not available to it under the provisions of IT Act. 4.1 The CIT(A) observed that the purpose of issuing notice u/s 153A of the IT Act and making assessment under that section is to bring to tax additional income, if any, coming to notice as a result of a search u .....

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rliament behind enacting the provision of section 153A of the IT Act. The provision of section 147 of the IT Act stands on a similar footing where the assessee is required to furnish a return in a situation where the Assessing Officer has reason to believe that income chargeable to tax had escaped assessment. The CIT(A) noted that the Hon ble Supreme Court in the case of CIT Vs. Sun Engg. Works Pvt. Ltd., 198 ITR 297 held that the provision is for the benefit t of the Revenue and the assessee ca .....

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8OG(5) is not allowable and accordingly the action of the Assessing Officer is upheld. 5. Aggrieved by the order of CIT(A), the assessee is in appeal before us raising the following grounds of appeal: 1. The order of the Learned Commissioner of Income-tax (Appeals) is against law, weight of evidence and probabilities of the case. 2.The learned Commissioner of Income Tax(Appeals) [C.I.T (A)] erred in dismissing the appeal filed by the assessee and in confirming the assessment made by the Assessi .....

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r coupled with the duty to rectify the errors that crept into the earlier order made u/s.143(1) while computing total income in the post-search assessment. 4. The learned C.I.T(A) ought to have directed allowance of the claims for deduction made by the assessee in sums of ₹ 3,00,000/- and ₹ 2,50,000/- 6. Before us, the ld. AR of the assessee filed petition seeking admission of additional evidence and stated therein that the additional evidences constitute vital evidence to support th .....

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Since the said additional evidences are crucial in determining the case of assessee, we admit the same. 8. The ld. AR of the assessee submitted that while filling the columns with the amounts of donations in the e-return, the software did not capture these donations at the point of the final computation of income and tax. He, therefore, submitted that the assessee claimed the deduction under Chapter - VIA for ₹ 5.50 lakhs (Rs. 3,00,000 u/s 80GGB + ₹ 2,50,000 u/s 80G) in the revised r .....

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n support of assessee s case: 1. Malpani Estates V. ACIT, [2014] 44 Taxmann.com 242 (Pune) 2. DCIT Vs. Eversmile Constructions Co. (P) Ltd., [2013] 33 Taxmann.com 657 (Mum.) 9. The ld. DR, on the other hand, relied upon the orders of revenue authorities. 10. We have considered the rival submissions and perused the material facts on record as well as the orders of revenue authorities. It is observed that the computation of income filed with the return u/s 153A, the assessee had claimed deduction .....

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