TMI Blog2015 (5) TMI 1232X X X X Extracts X X X X X X X X Extracts X X X X ..... PER R.K. PANDA, AM : This appeal filed by the assessee is against the order dated 12-03-2013 of the CIT(A)-I, Pune relating to Assessment Year 2009-10. 2. Facts of the case, in brief, are that the assessee is an individual and filed his return of income on 28-09-2009 declaring total income of ₹ 1,22,01,352/-. A search u/s.132 of the I.T. Act was conducted in the Malpani group of cases on 06- 10-2009. In response to the notice issued u/s.153A the assessee filed his return of income on 24-06-2010 declaring same income as was disclosed in the original return of income. During the course of assessment proceedings the Assessing Officer noted that during the course of search impounded documents at office premises of Malpani Estates at 3rd floor, Mantri Centre, Tukaram Paduka Chowk, F.C. Road, Pune- 411004 have revealed unaccounted cash receipt of ₹ 15,20,000/- and unaccrued cheque receipt of ₹ 16,00,000/- on account of sale of a land at Ambegaon. However, the assessee had not disclosed any capital gain in the original return of income filed. The Assessing Officer further noted that the assessee in its computation of total income filed in response to noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earthed during the course of search and offered to tax the assessee is entitled to claim deduction u/s.54F in respect of the additional income offered to tax. It was stated that since the evidences of sale of land has been found the issue has to be taken to its logical conclusion and the benefit of deduction u/s.54F has to be allowed. 4. However, the CIT(A) was also not convinced with the arguments advanced by the assessee. He observed that section 153A proceedings are in the nature of reassessment proceedings. The section talks about assessment or reassessment of the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted. Pending assessments as per the scheme of the search provisions of section 153A merge into the reassessment proceedings. Reassessment proceedings u/s.153A are thus alternate to reopening of assessments in search cases. The only difference is that notice u/s.148 is replaced with notice u/s.153A. He therefore observed that the ratio of decision of Hon ble Apex Court in the case of Sun Engineering Works Pvt. Ltd., (Supra) and Chettinad Corporation Pvt. Ltd., (Supra) would apply with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) was not justified in rejecting the said claim of exemption. 2.2] The learned CIT(A) ought to have appreciated that a. The assessee could make a fresh claim in the return filed u/s 153 A and there was no bar on the assessee. b. The conditions laid down u/s 54F were duly complied with by the assessee and hence, the claim of exemption u/s 54F should have been allowed. c. An income which is exempt under the provisions of the Act cannot be brought to tax merely because it is disclosed as a result of search proceedings and hence, there was no reason to deny the exemption u/s 54F claimed by the assessee against such income. 2.3] The learned CIT(A) failed to appreciate that the decision of Hon'ble Supreme Court in the case of Sun Engineering Works was not applicable to the assts. u/s 153 A and even otherwise, since the claim of exemption u/s 54F pertained to the additional income disclosed in the course of search, the said claim was allowable even in view of the said decision of Hon'ble Apex Court. 2.4] The learned CIT(A) erred in not appreciating that the various decisions relied upon by her were distinguishable on facts and hence, the same were not appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an amount of ₹ 58,50,000/- by cheque No.368116 dated 20-09-2008 drawn on HDFC bank Ltd. towards Duplex No.C-19, Tower-3, on 21st and 22nd floor at Project Castel Royale Magnifique, Bopodi, Pune. Referring to the copy of the agreement for purchase of flat dated 30-03-2010 a copy of which is placed at paper book pages 82 to 169, he submitted that the agreed value of the flat is ₹ 5,99,47,500/-. Referring to letter dated 22-11-2011 addressed to the Assessing Officer, a copy of which is placed at pages 10 to 14 of the paper book he submitted that the assessee during the course of assessment proceedings has stated before the Assessing Officer that as against the capital gain of ₹ 31,20,000/- for the A.Y. 2009-10 the assessee has claimed deduction u/s.54F. As a proof towards payment of ₹ 58,50,000/- made to Shri Shashbindu Constructions Pvt. Ltd. the assessee has enclosed the relevant particulars. It was also stated therein that the assessee did not own more than one residential houses other than the new asset on the date of transfer of the residential asset. The assessee has not purchased any residential house other than the new asset within a period of one year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with the Assessing Officer though it was not raised in the return of income originally filed. Therefore, the assessee can make a new claim in pending assessment. While doing so, the Tribunal has followed the decision of the Special Bench of the Tribunal in the case of All Cargo Global Logistics Ltd. Vs. DCIT reported in 137 ITD 287. 6.4 Referring to the decision of the Pune Bench of the Tribunal in the case of Malpani Estates Vs. ACIT reported in 64 SOT 105(Pune) he submitted that the Tribunal in the said decision has held that the character of the income does not change because of the search. Accordingly, the on-money received by the assessee on account of sale of flats of the housing project was held to be business income and correspondingly assessee s claim of deduction u/s.80IB(10) with regard to the enhanced income was allowed. He submitted that the assessee has sold the land and long term capital gain was derived. There is no reason to tax it as income from other sources . The character remains same. Since the assessee complied with the conditions laid down in provisions of section 54F of the I.T. Act, therefore, the assessee should be allowed to deduction u/s.54F to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... landed property. 10. In the case of Malpani Estates (Supra) the assessee was a partnership firm engaged in construction business which was subject to a search action u/s.132(1) of the Act. During the course of search, certain undisclosed income in relation to the housing project undertaken by the assessee firm was admitted by the partner of the assessee firm. The assessee reflected such additional income in the return of income filed as profits from its housing project which was eligible for deduction u/s.80IB(10) of the Act and claimed such deduction u/s.80IB(10) of the Act in relation to such additional income. The claim of the assessee was denied by the Assessing Officer which was upheld by the CIT(A). On further appeal the Tribunal allowed the claim of the assessee u/s.80IB(10) in respect of the additional income declared during the course of search by observing as under : 12. Now, coming to the point as to whether such 'business income' qualifies to be eligible for deduction u/s 80IB(10) of the Act in the course of an assessment made u/s 153A(1)(b) of the Act. On this aspect, the learned Departmental Representative submitted that the assessment in cases of sear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions enumerated in Chapter VIA of the Act are to be considered in making an assessment made u/s 153A(1)(b) of the Act. Section 153A(1)(b) of the Act requires the Assessing Officer to assess or reassess the 'total income' of the assessment years specified therein. Ostensibly, section 80A(1) of the Act prescribes that in computing the 'total income' of an assessee, there shall be allowed from his 'total income' the deductions specified in Chapter VIA of the Act. The moot point is as to whether the aforestated position prevails in an assessment made u/s 153A(1)(b) or not? In our considered opinion, having regard to the expression all other provisions of this Act shall apply to the assessment made under this section in Explanation (i) of section 153A of the Act, it clearly implies that in assessing or reassessing the 'total income' for the assessment years specified in section 153A(1)(b) of the Act, the import of section 80A(1) of the Act comes into play, and there shall be allowed the deductions specified in Chapter VIA of the Act, of course subject to fulfillment of the respective conditions. Therefore, we are unable to subscribe to the stand of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e context of the relevant specific provisions, which do not leave any scope for ambiguity. The judgment of the Hon'ble Supreme Court in the case of Sun Engineering Works Pvt. Ltd. (supra) has been rendered on a different footing and is strictly not applicable to the present proceedings. So, however, even if one were to import the reasoning raised by the learned Departmental Representative based on the judgment of the Hon'ble Supreme Court, to the present case, yet we do not find that it would debar the assessee from claiming deduction u/s 80IB(10) of the Act on the impugned additional income declared in the return filed in response to notice u/s 153A(1)(a) of the Act. In the present case, the claim of deduction u/s 80IB(10) of the Act was made in the return of income originally filed and in the return filed in pursuance to the notice u/s 153A(1)(a) of the Act, the claim u/s 80IB(10) of the Act is only enhanced and therefore, it is not a fresh claim. Therefore, in our view, the judgment of the Hon'ble Supreme Court in the case of Sun Engineering Works Pvt. Ltd. (supra) does not help the Revenue in the present case. 11. We find the Pune Bench of the Tribunal in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years 2007- 08 and 2008-09 were pending for assessment and the impugned claimed was not made in the returns of income originally filed. So, however, u/s 139(5) of the Act, assessee was competent to furnish a revised return and make such a claim, and thus the Assessing Officer was required to entertain such a claim in the course of exercising his original jurisdiction to make an assessment u/s 143(3) of the Act. Now, consequent to search action, for assessment years 2007-08 and 2008-09, Assessing Officer not only acquires jurisdiction to make additions based on the incriminating material but also retains the original jurisdiction, as explained by the Special Bench of Tribunal in the case All Cargo Global Logistics Ltd. (supra). Thus, the ensuing assessments u/s 153A(1)(b)of the Act for assessment years 2007-08 and 2008-09 would enable the Assessing Officer to consider the impugned claim which has been justifiably made by the assessee. Considering the entirety of circumstances and in law, we, therefore, hold that in so far as the assessments for the assessment years A.Y. 2003-04, 2006-07, 2007- 08 2008-09 2007-08 and 2008-09 are concerned, the income-tax authorities erred in not e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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