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M/s. Sri Balaji Builders Kakinada Versus ACIT, Central Circle, Rajahmundry

2018 (1) TMI 596 - ITAT VISAKHAPATNAM

Validity of assessment made u/s 153C - estimation of income in respect of the flats sold on the basis of the statements recorded from the flat buyers Mr. V.V.S. Venugopal and others u/s 131 - Held that:- As per the provisions of section 153C of the Act, it is mandatory to have the satisfaction of the A.O. that money, bullion, jewellery or other valuable article or thing or any books of accounts, documents seized or requisitioned pertains to or relates to the assessee, which means that unless the .....

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issued u/s 153C of the Act is unsustainable and accordingly quashed. - Decided in favour of assessee - I.T.A.No.111 And 112/Vizag/2015 - Dated:- 10-1-2018 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER For The Appellant : Shri G.V.N. Hari, AR For The Respondent : Shri Debakumar Sonowal, DR ORDER PER Bench: These appeals filed by the assessee are directed against order passed by the Commissioner of Income Tax (Appeals) {CIT(A)}, Guntur vide ITA No.444&445/C .....

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leted the assessment u/s 143(3) r.w.s. 153C of the Act on total income of ₹ 45,53,768/-. 3. The assessee constructed the apartments at Door No.65-2- 6/4, Narasanna nagar, Kakinada in 1011 sqare yards of site taken on development basis from the land lord and as per the agreement the assessee has to construct 34 flats in total built up area of 29600 square feet and to hand over 9 flats with built up area of 8662 sq. feet to the land lord. The assessee would get his share of 20938 square feet .....

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he year under consideration the assessee sold 12 flats with built up area of 14,261 sft and the AO estimated the proportionate sale consideration at ₹ 1,78,26,250/- @ 1250 per sft and the cost of construction of the sold flats was estimated at ₹ 1,31,04,482/- and arrived at the profit of ₹ 47,21,768/- and made the addition of ₹ 40,15,931/- being the difference amount. 4. Aggrieved by the order of the CIT(A), the assessee is in appeal before this Tribunal and raised the fo .....

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deleted. 3. The CIT(A) ought to have appreciated the fact that there is no difference in sale value per flat and books being not rejected, ought to have accepted the returned income. 4. Your Appellant submits that there is no incriminating material seized and income offered under section 132(4) for AY 2009-10 has been admitted, based on post search enquiries or on estimation of sale price per Sq. Yrd, no addition can be made, Your Appellant prays that the addition be deleted. 5. The Ld. CIT(A) c .....

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7; 190/- per sft and accordingly estimated the undisclosed consideration at ₹ 27,14,240/- for the area sold during the year and confirmed the addition to the extent of ₹ 27,14,240/- and deleted the balance addition. 6. Aggrieved by the order of the Ld.CIT(A) the assessee is in appeal before us. During the appeal hearing, the assessee raised the validity of assessment made u/s 153C r.w.s. 143(3) of the Act in the absence of incriminating material. During the appeal hearing, the Ld. A. .....

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n ble Supreme Court upheld the order of the Hon ble Bombay High Court in quashing the notice u/s 153C of the Act. 7. On the other hand, the Ld. D.R. supported the orders of the lower authorities. 8. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. In the assessee s case, the assessment was completed on estimation of income in respect of the flats sold on the basis of the statements recorded from the flat buyers Mr. V. .....

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nts for the AY 2008-09 on 01/10/2008. The assessee also produced the books of account before the assessing officer which were examined by the AO during the assessment proceedings. The AO has neither made any effort to locate the books of accounts nor recorded the statement from the accountant who audited the books of accounts at the time of survey. Therefore the observation of the AO that the assessee was not maintaining the books of accounts was not based on any basis hence cannot be accepted. .....

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riminating material found during the course of search in respect of assessment year 2008-09 in the premises of the searched person with regard to the suppression of income or inflation of expenditure. The statement recorded u/s 132(4) of the Act related to the assessment year 2009-10 but not related to the A.Y.2008-09. Now it is settled issue that for initiating the proceedings u/s 153C of the Act, it is incumbent upon the A.O. to have the incriminating material evidencing the undisclosed income .....

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t permissible. In the assessee s case there was no incriminating material found and seized from the premises of the group cases. Therefore, we hold that the notice issued u/s 153C of the Act is not sustainable and accordingly quashed. This view is upheld by the Hon ble Supreme Court in the case of CIT Vs. Sinhagad Technical Education Society (Supr). Respectfully following the judgement of the Hon ble Supreme Court, we hold that the notice issued u/s 153C of the Act is unsustainable and according .....

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of the Act and accordingly filed the return of income. However, the assessing officer completed the assessment estimating the income. Aggrieved by the order of the A.O., the assessee went on appeal before the CIT(A) and the Ld. CIT(A) sustained the addition of ₹ 10,69,700/- and deleted the balance amount. 11. Aggrieved by the order of the CIT(A), the assessee is in appeal before this Tribunal and the assessee has raised the following grounds against the order of the CIT(A). 1. Your Appella .....

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