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2016 (8) TMI 208 - ITAT BANGALORE

2016 (8) TMI 208 - ITAT BANGALORE - TMI - Validity of invoking the provisions of section 153A by issuing a notice under Section 153A - Held that:- The notice under Section 153A(1)(a) was issued on 24.9.2009 wherein the Assessing Officer has given time period for furnishing the return as 30 days from the date of service of notice. Even otherwise the period of 30 days provided by the Assessing Officer for furnishing the return of income is a reasonable period. Further the assessee furnished its re .....

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or substance and therefore rejected. - Invalid notice issued under Section 143(2) - Held that:- The Assessing Officer has discussed this issue in para 6 and pointed out that in the return filed in response to the notice under Section 153A the assessee has declared les income than income declared in the original return filed under Section 139 of the Act and therefore the Assessing Officer took the total income returned by the assessee as declared in the original return while computing the to .....

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e earned on sale of agriculture land - assessed as income from business instead of capital gains - deduction under Section 54B denied - Held that:- We find that there is no tax effect even if the income from sale of this property is treated as STCG instead of business income treated by the Assessing Officer and the only difference is because of the claim under Section 54B of the Act. There is no dispute that the land in question was not used for agriculture purpose in the two years immediately p .....

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s appeal. - Addition on account of income for performing Pooja - Held that:- The assessee in the statement had estimated the undisclosed income of ₹ 75 lakhs for 3 assessment years under consideration which matches the figures and amounts shown in the seized document relating to Pooja income of ₹ 35 lakhs, ₹ 20 lakhs and ₹ 20 lakhs for the Assessment Year 2006-07 to 2008-09 respectively. We find that there is no ambiguity in the statement of assessee regarding the Poo .....

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ed material is not correct. Therefore mere retraction of statement without explaining the circumstances as well as corroborating evidence, it cannot be accepted being an after thought. Accordingly, we do not find any substance in this ground of the assessee and the same is dismissed. - Addition on account of loan from Mr. Sunil Patil as unexplained credit - Held that:- Though the assessee has submitted that the Assessing Officer accepted the credit in the name of Mr. Sunil Patil of ₹ 4 .....

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ear under consideration. Accordingly, we direct the Assessing Officer to verify whether this unsecured loan in the name of Mr. Sunil Patil was duly disclosed in the return filed on 24.11.2006 or during the assessment proceedings completed vide order dt.21.11.2008. This issue is set aside to the record of Assessing Officer for proper verification and re- adjudication. - Disallowance made under Section 40A(3) - expenses claimed in excess of ₹ 20,000 - Held that:- Assessing Officer made t .....

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de an addition on additional investment under Section 69B of ₹ 3 lakhs. Since the relevant record has not been examined by the Assessing Officer and also not available before us therefore in the facts and circumstances of the case, we set aside this issue to the record of Assessing Officer for proper examination of the relevant record as well as the details to be filed by the assessee and then decide the same after affording an opportunity of hearing to the assessee. - Addition made on .....

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of accounts therefore those were considered by the Assessing Officer as payment out of books. As it is apparent from these numbers written in the margin that a proper care was taken for distinguishing the amounts in thousands by putting a point (.) before the number as in the case of last number written as 0.5. Therefore the other numbers written in the margin with the dates clearly indicates the payment made by the assessee in lakhs. Therefore we do not find any error or illegality in the orde .....

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ent. Even otherwise if an addition of ₹ 20 lakhs was made by the Assessing Officer and was sustained by the CIT (Appeals) on account of unaccounted Pooja income then to the extent of the addition the source of investment stand explained. Therefore we direct the Assessing Officer to allow the telescoping benefit of the Pooja income against the addition if it is not allowed against some other addition. - Income of sale of property - assessed as business income as against capital gains - .....

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an individual asset and not as a particular unit of business of the assessee. Accordingly, we are of the view that the gain arisen from the sale of land will be assessed as ‘Long Term Capital Gain’ (LTCG). However if any gain is earned on the construction part of the property, the same will be assessed as STCG. Accordingly, principally we allow the claim of the assessee and direct the Assessing Officer to accept the claim of LTCG to the extent of the land and if any gain is earned by the assess .....

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g Officer to take necessary step in this aspect. - Addition under Section 41(1) - amounts standing to the credit as on 31.3.2008 - Held that:- We are of the view that if this amount of ₹ 22,444 is part of sum of ₹ 2,22,444 being an addition made by the Assessing Officer under Section 41(1) of the Act for the Assessment Year 2006-07 then this addition cannot be made for the year under consideration. Hence, we direct the Assessing Officer to verify the fact as pointed out by the as .....

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ly, we do not find any error or illegality in the orders of the authorities below. - Setting off of the income estimated by the Assessing Officer on percentage completion method for the Assessment Year 2008-09 against the income offered during the year on completion of the project - Held that:- While dealing with an identical issue for the Assessment Year 2008-09, we have directed the Assessing Officer to set off the income assessed in the said assessment year based on the percentage of unco .....

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ot be made in the year under consideration. Accordingly, we direct the Assessing Officer to verify the dates of deposit in question and then decide this issue. - I.T.A. Nos.1186 to 1188 & 1197 & 1198/Bang/2013 - Dated:- 27-7-2016 - SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER Appellant By : Shri Chandrashekar, Advocate. Respondent By : Smt. Neera Malhotra, CIT (D.R) ORDER Per Shri Vijay Pal Rao, J.M. These five appeals by the assessee are directed against the comp .....

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efore approving an order of assessment u/s. 153A r.w.s. 143(3) of the Act will not vitiate assessment proceedings completed u/s. 153A r.w.s. 143(3) of the A ct. 2. The action of the learned CIT (A) is contrary to the procedure contemplated by the CBDT. 3. The learned Commissioner of Income Tax(Appeals) ought to have held the notice issued u/s. 153A of the Act, is illegal since return is called without granting statute recognised period for compliance and there is no reasons either recorded or co .....

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oceedings initiated u/s 153A of the Act, since the learned Assessing Authority has considered the income returned in the original return. 6. The learned Commissioner of Income Tax (Appeals) erred in holding the sum of Rs.ll,97,996/- the income earned on sale of Agri.Land is assessable under the head Business not under the head Capital Gains. 7. The learned Commissioner of Income tax (Appeals) erred in holding the appellant is not entitled to exemption u/s. 548 of the Act. 8. The ld. Commissioner .....

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& 2 are regarding validity of assessment framed under Section 153A of the Act due to non-offering an opportunity of being heard to the assessee before approving the assessment order. 4. The learned Authorised Representative of the assessee has submitted that as per the provisions of section 153D of the Act no order of assessment or reassessment under Section 153A shall be passed by the Assessing Officer below the rank of Joint Commissioner without prior approval of the Joint Commissioner. Th .....

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2010. Thus the learned Authorised Representative has pleaded that in the absence of proper approval the assessment is liable to be set aside. 5. On the other hand, the learned Departmental Representative has submitted that there is no requirement of any opportunity of being heard to the assessee at the time of approval of the Joint Commissioner for framing the assessment under Section 153A. The learned Departmental Representative has further submitted that the assessee has not disputed that the .....

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framing the assessment under Section 153A of the Act. The learned Authorised Representative has placed reliance on the provisions of section 153D of the Act as well as the decision in the case of Akhil Ghulamali Somji Vs. ITO (supra). For ready reference we quote the Sectin153D as under : 153D. No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of sub-section (1) of sect .....

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f taking approval by Assessing Officer below the rank of Joint Commissioner before passing an assessment order under Section 153A of the Act from Joint Commissioner. Therefore the condition mandated under Section 153D of the Act does not indicate that such approval must be given after hearing the assessee on the issue of approval. Thus we find that there is no such requirement of granting an opportunity of hearing to the assessee by the Joint Commissioner prior to giving the approval as per Sect .....

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: In view of the above discussion, we are of the clear opinion that incases falling under section 144B of the Act, the quasi-judicial function of the Income-tax Officer as an assessing authority comes to an end the moment the assessee files objections to the draft order. The power to determine the income of the assessee thereafter gets vested in the Inspect-ing Assistant Commissioner to whom the Income-tax Officer is required to forward the draft order together with objections. The only thing t .....

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ssioner. Moreover, the requirements of section 144B of the Act re mandatory. The Income-tax Officer has no option but to follow the same. He cannot make the final order on the basis of the draft order without forwarding the same to the Inspecting Assistant Commissioner along with the objections and without obtaining the directions of the Inspecting Assistant Commissioner. An assessment made by the Income-tax Officer in violation of the provisions of section 144B of the Act would be an assessment .....

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he Act and, hence, without jurisdiction. The Tribunal, in our opinion, was, therefore, justified in its conclusion that the assessment was liable to be annulled. It was right in holding that the assessment order passed by the Income- tax Officer the instant case without reference to the Inspecting Assistant Commissioner had rightly been annulled by the Commissioner of Income-tax (Appeals). In view of the above, we answer the question referred to us accordingly in favour of the assessee and again .....

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end of the relevant A.Y, the A.O u/s. 151(1) of the Act was required to take approval of the competent authority. The Hon ble Delhi High Court after discussing the issue in detail and the case laws cited before it has been pleased to approve the decision of Tribunal. In view of these decisions and the position of law provided u/s. 153D of the Act, we hold that the assessment orders impugned framed in absence of obtaining prior approval of the Joint Commissioner for the A.Ys. under consideration .....

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. The assessee has not raised this issue or disputed the approval granted by the Joint Commissioner. Accordingly, in view of our above discussion this ground raised by the assessee is bereft of any merit or substance and the same is rejected. 7. Ground Nos.3 & 4 are regarding validity of invoking the provisions of section 153A by issuing a notice under Section 153A of the Act. 8. The learned Authorised Representative of the assessee has submitted that the Assessing Officer has provided less .....

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there is no reason recorded by the Assessing Officer for providing the period less than 30 days renders the notice issued under Section 153A of the Act is invalid and consequently the assessment is liable to be quashed. 9. On the other hand, the learned Departmental Representative has submitted that there is no such minimum time period is provided under Section 153A rather the return of income is required to be filed within a period as provided in the notice itself issued under Section 153A of .....

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and therefore the assessee cannot take a plea that the assessee was not given the minimum period of 15 days. 10. We have considered the rival submissions as well as the relevant material on record. As regards the time period within which the assessee is required to furnish the return in response to notice under Section 153A is concerned, we find that there is no such time specified in the provisions of section 153A(1)(a) which reads as under : 153A. (1) Notwithstanding anything contained in sect .....

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referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; Thus the language of the provision is plain and unambiguous and the assessee is required to furnish the return within such period as prescribed in the notice itself. Therefore there may be issue of r .....

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essment or reassessment in case of search under Section 132 of the Act was introduced and the legislature has intentionally not provided any such minimum time period allowing the assessee to furnish the return of income than the time period provided under Section 158BC cannot be read into this section. Even otherwise we find that the notice under Section 153A(1)(a) was issued on 24.9.2009 wherein the Assessing Officer has given time period for furnishing the return as 30 days from the date of se .....

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A and thereafter the assessee furnished the return only after more than 4 months which was accepted by the Assessing Officer, the objection raised by the assessee is devoid of any merit or substance and therefore rejected. 11. Ground No.5 is regarding invalid notice issued under Section 143(2) of the Act. 12. The learned Authorised Representative of the assessee has submitted that the Assessing Officer issued a notice under Section 143(2) after filing the return in response to notice under Secti .....

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able to be cancelled. He has referred to the assessment order and submitted that the Assessing Officer took the return of income while computing the total income of the assessee from the return filed under Section 139 and not from the return filed under Section 153A of the Act. 13. On the other hand, the learned Departmental Representative has submitted that the Assessing Officer has clearly mentioned in the assessment order that the total income declared by the assessee in the original return f .....

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er the return of income filed by the assessee in response to the notice under Section 153A is a notice under Section 143(2) in respect of the original return. 14. We have considered the rival submissions as well as the relevant material on record. The objection of the assessee against the notice under Section 143(2) is purely based on one fact that while computing the total income of the assessee, the Assessing Officer took the return of income declared in the original return filed under Section .....

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en the time period for issuing notice was already expired. Therefore there cannot be any correlation between the total income computation and notice issued under Section 143(2) so claimed by the assessee. The Assessing Officer has discussed this issue in para 6 and pointed out that in the return filed in response to the notice under Section 153A the assessee has declared les income than income declared in the original return filed under Section 139 of the Act and therefore the Assessing Officer .....

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y the assessee under Section 153A of the Act. Hence this ground of the assessee is rejected. 15. Ground Nos.6 to 8 are regarding the income earned on sale of agriculture land is assessed as income from business instead of capital gains. The assessee earned an income of ₹ 11,97,996 from sale of Adyar Site. The assessee claimed the said income as capital gains and also claimed deduction under Section 54B of the Act. The Assessing Officer found that the income is taxable not as Short Term Cap .....

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urther a substantial improvement has been made in the said property. The CIT (Appeals) again recorded the fact that the interest paid on the land obtained for the said property has not been capitalized but claimed against the regular income. In the Wealth Tax Return, the assessee has shown this property as taxable asset even after the search in question and issuing a questionnaire to the assessee. Further the assessee has reported his nature of business as land developer and promoter. Accordingl .....

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the same as income being profit and gain from business and profession. The learned Authorised Representative of the assessee has submitted that when the time limit for issuing the notice under Section 143(2) was expired on the date of search then the assessment was not pending but was already over as on the date of search and proceedings under Section 153A are in the nature of reassessment as the original assessment for the year under consideration did not get abate. He has referred the return .....

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the scope of determining the total income in the reassessment famed under Section 153A is only addition of amounts those flow from the incriminating material found during the course of search. 17. On the other hand, the learned Departmental Representative has submitted that the assessee has claimed the exemption under Section 54B in the return filed in response to the notice issued under Section 153A therefore this is a fresh claim made by the assessee in the return filed under Section 153A and .....

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for atleast two years prior to the sale for agriculture purpose. 18. We have considered the rival submissions as well as the relevant material on record. We find that there is no tax effect even if the income from sale of this property is treated as STCG instead of business income treated by the Assessing Officer and the only difference is because of the claim under Section 54B of the Act. There is no dispute that the land in question was not used for agriculture purpose in the two years immedi .....

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sessee's appeal. Assessment Year 2006-07 19. For the Assessment Year 2006-07, the assessee has raised following grounds : 1. The learned Commissioner of income Tax (appeals) erred in holding that non issue of an opportunity of being heard by the Additional Commissioner before approving an order of assessment u / s . 153A r.w.s. 143(3: of the Act will not vitiate assessment proceedings completed u/ s. 153A r.w.s. 143(3) of the Act. 2. The action of the learned CIT (A) is contrary to the proce .....

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idered reasonable for compliances with regard to filing of return in response to notices. 5. The learned Commissioner of Income Tax (Appeals) ought to have held the notice issued vi] s 143(2) of the Act, relates to the original return flied u/ s. 139 of the Act and not to the proceedings initiated u / s . 153A of the Act, since the learned Assessing Authority has considered the income returned in the original return. 6. The learned Commissioner of Income Tax (Appeals) erred in upholding the adop .....

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it since the said transaction was considered while framing the assessment ujs.143(3) of the Act made on 21- 11-2008 and there is no material to suggest that the loan is not genuine. 9. The learned Commissioner of Income Tax (Appeals) ought to have held that the assessment for the assessment year 2006-07 does not get abated. 10. The learned Commissioner of Income tax (Appeals) erred in upholding the levy of interest u/s.234B as consequential. The appellant crave leave of the Hon'ble Tribunal .....

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egarding the validity of notice issued under Section 153A on the ground that the assessee was not given a clear 30 days notice. This issue is identical to the issue involved in Ground Nos.1 & 2 of the Assessment Year 2005-06. In view of our finding on this issue for the Assessment Year 2005-06, these grounds of the assessee s appeal stand dismissed. 22. Ground No.5 is not pressed by the ld. A.R. and the same is dismissed as not pressed. 23. Ground No.6 is regarding addition on account of inc .....

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, document No. A/GSP/2 dt.13.2.2009 was seized and as per the noting in page 36 to 38 of this seized document, the assessee earned income of ₹ 35 lakhs for the Assessment Year 2006-07. In the statement recorded under Section 32(4) on 13.2.2009, the assessee stated that the assessee earned substantial income from Pooja in the form of cash and the same has not been disclosed in the income tax return. Accordingly, the assessee admitted the receipt from Pooja income for the Assessment Year 200 .....

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racted its earlier statement recorded on 13.2.2009. The Assessing Officer again recorded the statement of assessee on 13.4.2009 wherein the assessee has took a stand that after reducing the expenses from the admitted Pooja income for the Assessment Year 2006-07 is only of ₹ 18,29,800. The Assessing Officer did not accept the contention of the assessee and made the addition of ₹ 35,00,000 as disclosed by the assessee in the statement recorded on 23.2.2009. The assessee challenged the .....

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plained that the actual gross receipts from Pooja was ₹ 50,64,000 for all the three years for the Assessment Years 2006-07 to 2008-09. Further the Assessing Officer recorded the statement on 13.4.2009 wherein the assessee has explained that the actual gross receipts for the three assessment years is ₹ 50,64,000 and after reducing the expenses actual income from Pooja was only ₹ 10,12,800. The learned Authorised Representative has further submitted that for the Assessment Year 2 .....

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ome is not sustainable. 26. On the other hand, the learned Departmental Representative has submitted that the addition is not based merely on statement recorded under Section 132(4) of the Act but there is a seized material clearly showing the income of the assessee from Pooja at ₹ 35 lakhs for the year under consideration. The assessee has not disputed the seized material therefore, a subsequent retraction of the assessee is nothing but an after thought without any supporting evidence. He .....

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erial at page 10 of the assessment order which clearly shows different entries recorded by the assessee including an entry of Mandir and Pooja of ₹ 35 lakhs for the F.Y. 2005-06. Therefore, the addition made by the Assessing Officer is not based merely on statement recorded under Section 132(4) of the Act. It is pertinent to note that the assessee in the statement had estimated the undisclosed income of ₹ 75 lakhs for 3 assessment years under consideration which matches the figures a .....

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equent retraction of the statement by the assessee withut any corroborating evidence cannot be accepted as the assessee has not explained the facts and circumstances under which he had admitted a wrong income in the statement and how the income shown in the seized material is not correct. Therefore mere retraction of statement without explaining the circumstances as well as corroborating evidence, it cannot be accepted being an after thought. Accordingly, we do not find any substance in this gro .....

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mentioned that whereabouts of Mr. Sunil Patil was not known however, payment was received through cheques and therefore, it was pleaded that genuineness cannot be doubted. Since the assessee failed to discharge its onus to prove the genuineness / identity and credit-worthiness of the creditor, the Assessing Officer made addition of the said amount as undisclosed income. On appeal, the CIT (Appeals) has allowed telescoping to the extent of ₹ 35 lakhs being the addition made on account of Po .....

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the other hand, the learned Departmental Representative has relied upon the orders of the authorities below and submitted that this issue was not examined by the Assessing Officer while passing the order under Section 143(3) of the Act. 32. We have considered the rival submissions as well as the relevant material on record. There is no quarrel on the proposition that if the assessment for a particular assessment year is not pending as on the date of search then it willmay not abate because of t .....

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and there is no evidence or seized material found during the search to support the undisclosed income. However from the record produced before us, we find that the assessee has filed a return of income on 3.2.2010 along with the Balance Sheet wherein this amount of unsecured loan in the name of Mr. Sunil Patil has been shown and it is not clear whether this record was filed by the assessee along with the return of income filed on 24.11.2006 on which the assessment was completed for the year unde .....

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rred in holding that non issue of an opportunity of being heard by the Additional Commissioner before approving an order of assessment u/s 153A r.w.s. 143(3) of the Act will not vitiate assessment proceedings completed u/s 153A r.w.s. 143(3) of the act. 2. The action of the learned CIT (A) is contrary to the procedure contemplatedby the CBDT. 3. The learned Commissioner of Income Tax(Appeals) ought to have held the notice issued u/s 153A of the Act, is illegal since retum is called without grant .....

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he Act, relates to the original return filed u/s 139 of the Act and not to the proceedings initiated u/s 153A of the Act, since the learned Assessing Authority has considered the income returned in the original return. 6. The ld. Commissioner of Income Tax (Appeals) erred in upholding the adoption of income under head "POOJA" ₹ 20,00,000/- as against ₹ 3,60,220/- admitted by appellant, rejecting the appellant's contention that the offer is Gross receipt and not net inco .....

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et abated since notice under Section 143(2) was issued and time to issue such a notice had expired. 9. The Learned Commissioner of Income Tax (Appeals) erred in upholding the disallowance made u/s. 40A(3) of the Act without considering the contention that section 40A(3) is not applicable and addition is not warranted. 10. The Learned Commissioner of Income Tax (Appeals) erred in upholding the addition of ₹ 3 lakhs made applying the provisions of section 69B of the Act. 11. The Learned CIT( .....

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rant of opportunity of hearing to the assessee for granting approval by the Joint Commissioner. This issue is identical to the issue involved in Ground Nos.1 & 2 of the Assessment Year 2005-06. In view of our finding on this issue for the Assessment Year 2005-06, these grounds of the assessee s appeal stand dismissed. 35. Ground Nos.3 & 4 are regarding the validity of notice issued under Section 153A on the ground that the assessee was not given a clear 30 days notice. This issue is iden .....

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ding on this issue for the Assessment Year 2005-06, these grounds of the assessee s appeal stand dismissed. 38. Ground Nos.7 & 8 are not pressed by the ld. A.R. and the same is dismissed as not pressed. 39. Ground No.9 is regarding disallowance made under Section 40A(3) of the Act. 40. During the course of assessment proceedings, the Assessing Officer asked the assessee to provide all the expenses claimed in excess of ₹ 20,000. The assessee vide letter dt.27.10.2010 submitted that deta .....

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cer from the ledger account has not been claimed as business expenditure and therefore the same cannot be disallowed under Section 40A(3) of the Act. He has further contended that this is also a double addition as an amount of ₹ 3 lakhs in the name of Smt. Vani Mahesh was also added by the Assessing Officer under Section 69B of the Act as unexplained investment. 42. On the other hand, the learned Departmental Representative has contended that there is no double addition as far as this amou .....

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than ₹ 20,000 in cash. The Assessing Officer took the figures from the ledger account however, the assessee claimed that the amount was not claimed as a business expenditure therefore it cannot be disallowed. Further the assessee also claimed that this is a double addition of the same amount of ₹ 3 lakhs in the name of Smt. Vani Mahesh as the Assessing Officer has made an addition on additional investment under Section 69B of ₹ 3 lakhs. Since the relevant record has not been ex .....

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of ₹ 39,00,000 has been made on seized material and payments have been made to Mr. Hiren Kumar Patel. Order of the learned CIT (Appeals) is opposed to law. 45. We have heard the learned Authorised Representative as well as learned Departmental Representative and considered the relevant material on record. This is not a new plea raised by the assessee before us but this addition was made by the Assessing Officer based on the seized material and the assessee has also challenged the action of .....

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n on merit. Hence we admit the additional ground for adjudication on merit. 46. During the course of search the document was seized and from analysis of page 75 of the seized material, the Assessing Officer noted that the assessee has paid total amounting to ₹ 19 lakhs to one Mr. Hiren Kumar Patel. The assessee claimed that the figure written as 19 represents only ₹ 19,000 and not ₹ 19 lakhs. The Assessing Officer noted that the amount mentioned in the seized material are in th .....

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t the assessee has paid the alleged amount of ₹ 58 lakhs to Mr. Hirenkumar Patel. He had submitted that the amounts noted down in the margins of the diary entry rewritten in thousands and not in lakhs. He has submitted that these amounts in the margin clearly shows that they represent entries in the diary and not an extra payment which is not recorded in the said diary. The assessee right from the beginning has explained this before the Assessing Officer. He has not paid the alleged amount .....

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submitted that it is only an allegation and assumption of the Assessing Officer and not a real transaction of payment made by the assessee. 48. On the other hand, the learned Departmental Representative has submitted that the Assessing Officer has analysed the entries at page No.75 of the seized material as reproduced by the Assessing Officer at page 30 of the assessment order from which it is clear that the assessee has paid a sum of ₹ 18 lkahs on 7.8.2006 and again paid ₹ 1 lakh on .....

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tment being payment made by the assessee out of the books to one Mr. Hirenkumar Patel. The CIT (Appeals) while confirming the addition has granted the benefit of telescoping to the extent of an addition of ₹ 39 lakhs on account of Pooja income and therefore confirmed addition of remaining amount of ₹ 19 lakhs. The limited controversy before us is whether the abbreviated or coded amounts written in the margins of the diary at page 75 of the seized material represents the amounts in la .....

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Bank and M.G.Road. 16,65,000 1,00,000 17,65,000 07-08-06 Cash 35,000 18,00,000 18-08-06 +5 Road 19+1+5+5 30 12/10/06 30+5 - 17/12 35+12+6 53.+ .5 Ch.No.55339 of the Dhanalakshmi Bank and M.G. 1,00,000 From the numbers written in the margin it is clear that the Assessing Officer took the first number being 19 as sum total of ₹ 18 lakhs + ₹ 1 lakh, the payment made by the assessee on 7.8.2006 and on 8.8.2006 respectively. The other numbers mentioned in the margins are not recorded in t .....

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the orders of the authorities below on this issue and confirm the addition of ₹ 19 lakhs as sustained by the CIT (Appeals). Assessment Year 2008-09, 50. The assessee has raised the following grounds : Repr. 1. The learned Commissioner of income Tax (appeals) erred in holding that non issue of an opportunity of being heard by the Additional Commissioner before approving an order of assessment u/s 153A r.w.s. 143(3) of the Act will not vitiate assessment proceedings completed u/s 153A r.w.s. .....

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appellant respectfully submits a period of clear 30 days to 45 days was considered reasonable for compliances with regard to filing of return in response to notices. 5. The ld. Commissioner of Income Tax (Appeals) ought to have held the notice issued u/s 143(2) of the Act, relates to the original return filed u/s 139 of the Act and not to the proceedings initiated u/s 153A of the Act, since the learned Assessing Authority has considered the income returned in the original return. 6. The ld. Com .....

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n made on account of POOJA the learned CIT (Appeals) ought to have considered the same as available for set repayment of against the addition sustained on account of additional investment on Flat. 9. The Learned Commissioner of Income Tax (Appeals) erred in holding the income on sale of Moodabidri Property as assessable under the head Business and not under the head capital gain. 10. The Learned Commissioner of Income Tax (Appeals) having upheld the income from contract ought to have directed th .....

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rranted. 12. The learned Commissioner of Income tax (Appeals) erred in upholding the addition of R s . 22 , 444 / - made under the longer payable. head Credits no Longer payable. 13. The learned CIT (Appeals) erred in upholding the levy of interest u/s.234B as consequential. The appellant crave leave of the Hon'ble Tribunal to raise such other ground or grounds at the time of hearing. 51. Ground Nos.1 to 6 are identical to the grounds stand disposed of in view of our findings in the Assessme .....

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in incomplete state and the owners did not complete the construction and because of this he paid to the owner only ₹ 15 lakhs and he himself spent ₹ 18 lakhs for completion work. However he has accounted only ₹ 3 lakhs out of the above additional work and the balance of ₹ 15 lakhs was spent out of his unaccounted income. Thus the assessee admitted the unaccounted income of ₹ 15 lakhs being investment in the Flat. The Assessing Officer accordingly made an addition of .....

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has relied upon the orders of the authorities below. 55. Having considered the rival submission as well as the relevant material on record. We find merits in the submission of the learned Authorised Representative that when there is an addition on account of Pooja income for ₹ 20 lakhs for the year under consideration then the benefit of telescoping of the said amount shall be given against the addition of unexplained investment. Even otherwise if an addition of ₹ 20 lakhs was made .....

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the assessment year under consideration, the assessee sold Moodabidiri property i.e. Pandit Health Resort & Spa for a consideration of ₹ 2.5 Crores to M/s. Benefit Filmcity (India) Pvt. Ltd., Mumbai. This land was purchased by the assessee on 30.07.2004 for a consideration of ₹ 40 lakhs and was sold on 14.9.2007 after development and setting of Hotel under the name Pandit Health Resort & Spa. The Assessing Officer noted that that this property is nothing but a resort set up .....

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itted that the assessee purchased the land in the year 2004 and sold after 4 years. There is no dispute that this land was a capital asset and the profit arising from the sale of land is nothing but capital gain. The property was developed as an asset and not for doing the business of hotel/spa. When the property was not used for business purpose then it is only a capital asset and sale of its results in capital gain and not business income. 59. On the other hand, the learned D. R. has submitted .....

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case of the revenue that the land was shown as stock in trade. Therefore even if the land was shown as business asset and it was sold prior to the completion of construction work. It would not partake the character of business undertaking or asset on which depreciation is allowed. Therefore this land was sold as an individual asset and not as a particular unit of business of the assessee. Accordingly, we are of the view that the gain arisen from the sale of land will be assessed as Long Term Ca .....

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t the assessee has not declared any income in respect of certain projects from which substantial work in progress has been declared. Accordingly, the Assessing Officer made an addition of ₹ 11,61,020 based on the working provided by the assessee. The CIT (Appeals) has confirmed the action of the assessee. 63. Before us, the learned Authorised Representative of the assessee has submitted that the project was not completed during the year and the assessee has offered the income from the said .....

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rders of the authorities below. 65. We have considered the rival submissions as well as the relevant material on record. We find that the assessee has offered the income from this project for the Assessment Year 2009-10. Therefore the addition made by the Assessing Officer from this project for the year under consideration is required to be reduced from the income for the Assessment Year 2009-10 to avoid double taxation of the same income. Accordingly, we direct the Assessing Officer to take nec .....

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ade an addition of ₹ 2,22,444 under Section 41(1) being the amount standing to the credit as on 31.3.2006. Therefore this amount of ₹ 22,444 has already been added as income for the Assessment Year 2006-07 and a such no further separate addition is called for. 68. On the other hand, the learned Departmental Representative has relied upon the orders of the authorities below. 69. Having considered the rival submission as well as relevant record, we are of the view that if this amount o .....

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in upholding the adoption of income under head "POOJA" ₹ 30,00,000j- as against RsA,09,165j- admitted by the appellant, rejecting the appellant's contention that the offer is Gross receipt and not net Income. 2. The Authorities below erred in adopting the income from pooja at ₹ 30,00,000/-, as there is no material to suggest that the appellant has earned such income. 3. The Learned Commissioner of Income Tax (Appeals) erred in rejecting the set off of short term loss c .....

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rejection of claim of set off of income estimated on percentage completion method, without considering that the appellant had taken up contract of only one project, which was completed in financial year 2008-09. 6. The learned CIT (Appeals) erred in upholding the levy of interest under Section 234B as consequential. The appellant crave leave of the Hon'ble Tribunal to raise such other ground or grounds at the time of hearing. 71. Ground Nos.1 & 2 are regarding addition on account of Poo .....

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er Section 10(35) of the Act. The CIT (Appeals) has confirmed the action of the Assessing Officer. 73. We have heard the learned Authorised Representative as well as learned Departmental Representative and considered the relevant material on record. There is no dispute that the income from Mutual Fund in question is exempt under Section 10(35) of the Act therefore, any loss from the same source cannot be allowed to be set off against the taxable income. Accordingly, we do not find any error or i .....

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9, we have directed the Assessing Officer to set off the income assessed in the said assessment year based on the percentage of uncompleted project against the income of the project offered by the assessee on completion during the year under consideration. Accordingly this ground stand disposed off. 76. The assessee has raised an additional ground which reads as under : 1. The learned CIT (Appeals) erred in holding that the deposits inthenames of the family members of the appellant are assessabl .....

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resh plea raised by the assessee but the additional ground raised is emanating from the impugned orders of the authorities below. Accordingly, we admit the additional ground for deciding on merits. 78. During the course of search and seizure operation, a Fixed Deposit of ₹ 28 lakhs was detected in the name of Smt. Rajeshwari G Pandit, Smt. Sushma G Pandit and Smt. Sabitha G Pandit, the family members of the assessee. In the statement recorded under Section 132(4) of the Act on 13.4.2009, S .....

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