TMI Blog2021 (8) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. Additions made by Assessing Officer in assessment for AY 2011-12 are not based on any evidence, belonging to the assessee found during the search. It is settled law that no addition can be made in the unabated assessment in absence of evidence found during the search. During the hearing before us, no evidence or material was brought to our notice that any of the addition either on substantive or on protective is based on evidence found during the search. We further find that the order of ld CIT(A) is in consonance with the decisions of Jurisdictional High Court in Saumya construction (P) Ltd. [ 2016 (7) TMI 911 - GUJARAT HIGH COURT] , Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] and Continental Warehousing (Nhava Sheva) Ltd [ 2015 (5) TMI 656 - BOMBAY HIGH COURT] which we affirm. Thus, in view of the aforesaid discussions, we do not find any merits in the grounds of appeal raised by the revenue. LTCG - year of assessment - capital gain in the hand of other coowners - Transfer of asset u/s 2(47) - AO while passing the assessment order for AY 2011-12 withdrew the LTCG and directed to tax it in AY 2013-14 - revenue vehemently submitted that no performance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment years, thus, both the appeals clubbed, heard together and are decided by common order to avoid the conflicting decision. In appeal for AY 2011-12, the Revenue raised following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the following additions stating that the AO had no jurisdiction to make additions in completed assessment u/s. 153A r.w.s. 153C of the Act; in the absence of any incriminating documents or evidence found during search proceedings. 1. Addition u/s. 69 on land block No. 127 ₹ 11,00,000/- 2. Unexplained investment u/s. 69 on protective basis ₹ 2,97,59,230/ 3. Addition u/s. 69 on land block No. 141 Khajod ₹ 11,00,000/ 4. Unexplained investment u/s. 69 on protective basis ₹ 2,50,00,000/- 5. Unexplained investment made u/s. 69 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee runs a proprietary business in the name of J. J. Chemicals and partner in DRB Ravani Builder. A search under section 132 was carried out by Department in case of land dealers and builders Group on 27.12.2012. In search certain incriminating material related with the land dealers and builders were found and seized. Consequent, of search, a notice under section 153C was served upon the assessee on 16.09.2014 to file return of income for AY 2011-12. The notice was served on the ground that the assessee is one of the related parties with the land and builders group. Further notice under section 143(2) and 142(1) was served on the assessee on 19.01.2015. The assessee objected to the notice under section 153C, on the ground that neither the assessee was searched nor covered in the search, the notice is served after 21 months from the date of search. The time limit prescribed under section 153B for completing assessment under section 153C, was up to 31.03.2016. The objection of assessee was not accepted by the Assessing Officer. The Assessing Officer issued show cause notice under section 144. The assessee raised objection for completing assessment under section 144. The Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xman 300 and Continental Warehousing (Nhava Sheva) Ltd [2015] 58 taxmann.com 78, respectively and allowed the additional grounds of appeal. ] 6. The Ld. CIT(A) after perusal on record and the aforesaid decisions held that the assessee filed original return of income for AY 2011-12 on 27.03.2013. The time limit for issuance of notice under section 143(2) had also expired when the satisfaction was recorded on 16.09.2014 for issuance of notice under section 153C. On the basis of aforesaid factual and legal discussion, the Ld. CIT(A) held that the additions made by Assessing Officer in assessment for AY 2011-12 are not based on any evidence, belonging to the assessee found during the search. All the additions are based on the copy of drafts of Statakhat (agreement) of different lands which were impounded during the course of survey under section 133A from the premises of A Sai Leela Associate, 302, SNS House-3 Athwalines, Surat. The Ld. CIT(A) also held that no addition made on the basis of document which were believed to belonging to the assessee while recording satisfaction. Thus, the Ld. CIT(A) allowed the additional ground of appeal and deleted the additions. 7. Befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income tax return all co-owners showing Long Term Capital Gains calculation of all partners. The assessee has shown Long Term Capital Gains of ₹ 1.45 Crores. On introduction of land by all partners to the firm, possession of land was given on 01.11.2010 and construction was started by firm in AY 2011-12. The firm-DRB Ravani Developers had shown the land as stock-in-trade in the balance-sheet in A.Y. 2011-12. 9. One of the family members of assessee filed a Civil Suit and obtained a Stay order from Civil Court, against the transfer of land. Due to stay on sale of the portion of land, sale deed could not be executed. The assessee also filed the copy of stay order. The Civil dispute was cleared in AY 2012-13 and the sale deed was executed on 09.11.2012 at stamp duty applicable on that day at ₹ 6.06 crore. Copy of sale deed was also furnished. The assessee also contended that he and other seven co-owners shown capital gains in A.Y. 2011-12 as possession was already handed over to Rajkumar Ravani. The assessee further stated that during assessment the assessee filed the copy of sale deed and all the facts were explained vide submissions dated 24.03.2015. The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities. With regard to deleting the additions in AY 2011-12, the ld CITDR for the revenue submits that for the year under consideration, the assessee filed his return of income under section 139(4) on 27.03.2013, which is the extended time period for filing return of income. A search and seizure action under section 132 was carried out by the investigation wing of the revenue on 27.12.2012 on land and builder group. The assessee was one on the related party in the group. A notice under section 153C dated 16.09.2014 was served upon the assessee to furnish his return of income. The assessing officer made addition after granting opportunity to the assessee. The ld CIT(A) deleted the addition by taking view that the additions are not based on the incriminating evidence found during the search. The case laws relied by the assessee in support of additional grounds of appeal were based on the return of income filed under section 139(1) of the Act. The ld CIT-DR for the revenue prayed for reversal of the decision of the ld CIT(A) and to restore the order of assessing officer. 12. On deleting the addition of long term capital gain in AY 2013-14, the ld CITDR for the revenue submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural land in Bhimrad Village, bearing a plot No. 4 5 TPS file (Vesu Bhimrad) known as Vesu Land . Each of the co-owners were having shareholding of 12.5% in said land. The total actual area of Vesu land was 32064 sq. mts, out of the total area 17307 sq. mts was sold by assessee with seven other co-owners during the year under consideration. The area of 8653.509 sq.mtarea was sold by assessee with seven other co-owners with mutual agreement to Rajkumar Karamshibhai Ravani and eleven other parties on 25.10.2010 for consideration of ₹ 6.05 Crores. It was argued that Raj Kumar Karamshibhai Ravani and other co-owner of said land introduced the land to their partnership firm through partnership dated 08.10.2010 for a sale consideration of ₹ 6.05 Crores. The jantry rate of land during that time was ₹ 7,000/- per sq.mt. The assessee s share being 12.5% of sale proceed was ₹ 75,72,000/-. Another remaining area of 8653.50 sq.mt. was introduced by assessee and seven other co-owners as capital introduction in the partnership firm, M/s DRB Ravani Developers. The land value recorded in the books of account of firm was ₹ 60,576,000/- and the assessee s share be 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 Submission dated 24/03/2015 in response to above notice 10 Summons to assessee undersection131 of the Act issued on 11/09/2014 11 Assessment order of M/s DRB Ravani Developers for AY 2011-12 12 Copy of statement recorded of Dilipbhai Ravani 13 Satakhat copy of Block No. 127 14 Statement recorded under section 131 of assessee on 30.03.2013 15 For No. 7/12 of Block No. 127 16 Sale Deed of Block No. 127 17 Satakhat of Block No. 141 18 Form No.7/12 of Block No. 141 19 Sale Deed of Block No.141 20 Satakhat of Block No. 238 21 Sale Deed of Block No.238 22 Written submissions before Ld. CIT(A) for A.Y 2011-12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found during the search. It was also held that all the additions are based on the copy of drafts of Statakhat (agreement) of different lands which were impounded during the course of survey under section 133A from the premises of A Sai Leela Associate, 302, SNS House-3 Athwalines, Surat. The Ld. CIT(A) also held that no addition made on the basis of document which were believed to belonging to the assessee while recording satisfaction. It is settled law that no addition can be made in the unabated assessment in absence of evidence found during the search. During the hearing before us, no evidence or material was brought to our notice that any of the addition either on substantive or on protective is based on evidence found during the search. We further find that the order of ld CIT(A) is in consonance with the decisions of Jurisdictional High Court in Saumya construction (P) Ltd. (supra), Delhi High Court in Kabul Chawla (supra) and Bombay High Court in Continental Warehousing (Nhava Sheva) Ltd (supra), which we affirm. Thus, in view of the aforesaid discussions, we do not find any merits in the grounds of appeal raised by the revenue. Considering the facts that we have affirm the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners as capital introduction in the partnership firm, M/s DRB Ravani Developers. The land value recorded in the books of account of firm was ₹ 60,576,000/- and the assessee s share be 12.5% was ₹ 75,72,000/-. The total land contribution by or twenty partners became 17307 sq.mts, on which project of Callestrial Dreams was started and that all the co-owners had duly paid tax on the sale of land in A.Y 2011- 12. 23. We find merit in the submissions of the learned Senior Counsel for the assessee as the DRB Ravani builder stared project on the land introduced by the assessee and his co-owners and Ravani family. During the search the partner of the DRB Ravani Developer undisclosed income of ₹ 4.50 Crore and paid due tax on the said discloser. The revenue accepted the discloser and accepted the tax in assessment order dated 22.03.2013. DRB Ravani Builder also had shown the land in their books of account, which is neither doubted nor disturbed by the revenue. Further all the co-owner of the assessee also offered similar Capital gain in AY 2011-12, which was accepted by the revenue. The revenue has not made re-opening of any of those co-owners, which has attained fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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