TMI Blog2021 (12) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim made in the original returns of income. The prohibitory conditions of section 80A(5) would not be applicable. In any case of the matter, the revenue does not dispute the fact that the assessee is otherwise eligible to claim deduction under section 80IB(10) of the Act in respect of the profit earned from the subject project. The additional income offered by the assessee because of receipt of on-money, undoubtedly, forms part of the profit earned from the subject housing project. Therefore, merely because the additional income is offered in a search related assessment proceeding under section 153C of the Act, assessee s claim of deduction cannot be disallowed. See Malpani Estates vs ACIT [ 2014 (2) TMI 944 - ITAT PUNE ] Since the additional income offered by the assessee goes to enhance the business income derived from the eligible housing project, the assessee would be entitled for deduction under section 80IB(10) - Decided in favour of assessee. - ITA No.6620/Mum/2019 ITA No.6621/Mum/2019 ITA No.6622/Mum/2019 - - - Dated:- 12-11-2021 - SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI S. RIFAUR RAHMAN (ACCOUNTANT MEMBER) Appellant by : Shri Subodh Ratnaparkh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Commissioner (Appeals) agreed with the decision of the assessing officer in disallowing deduction claimed under section 80IB(10) of the Act. However, considering the fact that the expenditure claimed by the assessee against the undisclosed income also forms part of the seized documents / materials, learned Commissioner (Appeals), estimated the net profit at 46% on the additional income shown by the assessee on account of onmoney. In other words, learned Commissioner (Appeals) allowed expenditure to the extent of 54%. 4. Learned authorized representative of the assessee submitted, during the year under consideration the assessee has offered profit from a single project developed by it. He submitted, in the return of income filed originally, the assessee had claimed deduction under section 80IB(10) which was allowed by the assessing officer. He submitted, the additional income offered on account of onmoney also relates to the very same project. Thus, he submitted, the assessee is eligible to claim deduction under section 80IB(10) of the Act even in respect of additional income offered on account of on-money. In support of such contention, learned authorized representative rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... project from which the assessee has not only declared income in the original return of income but has also claimed deduction under section 80IB(10) of the Act. It is also a fact on record that assessee s claim of deduction under section 80IB(10) in respect of the very same project has been allowed in the original assessment proceedings. Therefore, the deduction claimed under section 80IB(10) of the Act in the returns filed under section 153C of the Act is in continuation to the claim made in the original returns of income. Therefore, in our considered opinion, the prohibitory conditions of section 80A(5) would not be applicable. In any case of the matter, the revenue does not dispute the fact that the assessee is otherwise eligible to claim deduction under section 80IB(10) of the Act in respect of the profit earned from the subject project. The additional income offered by the assessee because of receipt of on-money, undoubtedly, forms part of the profit earned from the subject housing project. Therefore, merely because the additional income is offered in a search related assessment proceeding under section 153C of the Act, assessee s claim of deduction cannot be disallowed. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch income, which according to the Assessing Officer does not fall under of the any heads of income as described u/s 14 of the I.T. Act . In coming to such conclusion, he has disagreed with the stand of the assessee that such additional income was a 'business income' of the assessee relating to the housing project The Crest1 at Pimple Saudagar, Pune. However, as per the CIT(A), the income in question is assessable under the head 'income from other sources'. Ostensibly, the CIT(A) has not agreed with the inference of the Assessing Officer that the impugned income does not fall under any heads of income u/s 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 se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons, the claim of the assessee has been opposed. 13. Sections I53A to 153C of the Act contain provisions relating to assessments to be made in cases where search is initiated u/s 132 or a requisition is made u/s 132A of the Act after 31st May. 2003. Clause (b) of sub-section (1) of section 153 A postulates assessment or re-assessment of total income of six assessment years preceding the assessment year relevant to the previous year in which such search is conduced or requisition is made. Shorn of other details, it would suffice for us to notice clause (i) of the Explanation below section 153A(2) of the Act, which reads as under :- Explanation. - For the removal of doubts, it is hereby declared that, - (/) 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 expressi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally made in the return originally tiled, which was duly accompanied by the prescribed audit report. 16. The argument set-up by the learned Departmental Representative on the basis of the judgment of the Hon'ble Supreme Court in the case of Sun Engineering Works (P.) Lid (supra), in our view, is also untenable having regard to the facts of the present case. No doubt the Hon'ble Supreme Court has observed that reopening of an assessment u/s 147/148 is for the benefit of the Revenue. In the case before the Hon'ble Supreme Court, assessee wanted to set-off loss against the escaped income which was taxed in the re-assessment proceedings and the claim of such set-off was not made in the return of income 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. Infact, the judgment of the Hon'ble Supreme Court in the case of Sun Engg. Works (P.) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the additional income in question has been received in the course of carrying on its business activity of developing the housing project, The Crest' at Pimple Saudagar, Pune, which is eligible for section 80IB(10) benefits. Therefore, in terms of the parity of reasoning laid down by the Hon'ble Bombay High Court in the case ofSheth Developers (P) Lid. (supra), the claim of the assessee is justified. 18. In-fact, once it is factually explicit that the additional income in question is derived from the housing project, The Crest' at Pimple Saudagar, Pune, which is eligible for section 801B(10) benefits, such an income merely goes to enhance the 'business income1 derived from the eligible housing project and shall be entitled for section 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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