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TMI Blog2023 (2) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... 153A in as much as there has been no warrant of authorization under section 132 of the Act as mentioned in the assessment order which is arbitrary and unjustified and as such the assessment merits annulment. 2. That the Ld. Commissioner of Income tax(Appeals) has further erred in holding that notice was validly served when in fact no notice under section 153A was ever served on the assessee and as such the assessment framed and upheld is time barred, illegal and as such merits annulment. 3. Without prejudice to the above, the Ld. Commissioner of Income Tax(Appeals) has erred in upholding the addition of Rs.3.21.375/- treating alleged income received from M/s Omaxe Limited to be income from other sources when in fact no amount has been received by the assessee and as such the addition made is arbitrary and unjustified. 4. That the Ld. Assessing Officer has further erred in holding that the alleged assured return paid to the assessee is not covered under definition of interest as per Article 12 of Indo-UK DTAA and Section 2(28A) of the Income tax Act thereby denying the benefit of Article 12 of the DTAA which is arbitrary and unjustified. 5. That the Ld. Commissioner of Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest as per Article-12 of Indo-UK DTAA as well as Section 2(28A) of the Act. Further referring to the allotment letter, the AO held that the agreement does not intend to treat assured return as interest as nowhere in the allotment letter, it has been stated that M/s Omaxe Ltd. shall pay any interest to the assessee otherwise it would have been worded as interest which is absent in the instant case. It was accordingly held by the AO that assured return received by the assessee can only be classified under the head "income from other source" under section 56(1) of the Act and the same was accordingly brought to tax in the hands of the assessee and assessment was completed u/s 143(3) r/w 153A of the Act. 4. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A). It was submitted that the assessee has not received any assured return from M/s Omaxe Limited. The assured return, if any has been received and misappropriated by Shri A.K Uppal in connivance with bankers and the assessee has initiated legal action against Shri A. K Uppal and the bankers. It was further submitted that the TDS has already been deducted at Rs 49,172/-. It was accordingly submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard the rival contentions and purused the material available on record. We find that under the identical set of facts and circumstances of the case, the matter has been decided by the Coordinate Chandigarh Benches in case of Shri Mohinder Singh Sanghera Vs. Astt. DIT (Supra) and the relevant findings of the Coordinate Bench are contained at para 9 to 13 of its order which read as under: "9. Now, coming to the merits of the case, the Assessing officer while making the impugned additions has relied upon the definition of 'interest' as provided under article 12 of the India -U.K. DTAA, which read as under:- "The term interest as used in Article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtors profits, and in particular, income from Government Securities and income from bonds and debentures, including premiums and prizes attaching to such securities, bonds or debentures but, subject to the provisions of paragraph 9 of this Article, shall not include any item which is treated as a distribution under the provisions of Article 11 (Dividends) of this convention." 10. The Assessing offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had advanced money to the Omaxe Ltd. which was nothing but a debt claim till the proposed property is constructed, possession handed over to the assessee and the conveyance deed executed and registered. In our view, it was a financial transaction and the assured money return received by the assessee was nothing else than the interest received by the assessee on the finances made by the assessee to the Omaxe Ltd to be used for the construction of the property. Therefore, the Omaxe Ltd had rightly deducted the tax @ 15% of the interest / assured return paid to the assessee. Even the assessee on being asked to file the return has also treated the said receipts as interest income. However, subsequently, the assessee changed his stand and come with a plea that the assured return is only in the nature of capital receipt. The assessee in this respect has placed reliance on several decisions of the High Courts and Supreme Court. Without referring to each of the decision, we may point out that the decisions referred to by the assessee are not applicable to the facts and circumstances of the case e.g. in the case of 'CIT Vs. Saurashtra Cement Ltd (2010) 325 ITR 042 (SC) : 192 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Article 12 of India-UK DTAA. In the result, ground no. 4 of the assessee's appeal is allowed in favour of the assessee and against the Revenue. 9. Regarding Grounds of Appeal 5-7 in respect of an addition of Rs.43,48,630/-, it was submitted by the ld AR that during the course of appellate proceedings before the CIT(A), the assessee placed on record additional evidence available at Pages 1-270 of the Paper Book. The same has been referred to at Page 10 of the appellate order passed by CIT(A) in the submissions duly incorporated in respect of Grounds 7 and 8 raised before the CIT(A). But while adjudicating these grounds, the CIT(A) at Page 21 of his order mentions that "the appellant in the appeal proceedings also, has not been able to explain what the source of these credits is. In the absence of any explanation, the finding of the Assessing officer to treat the said amount as income is totally valid. " The Commissioner of Income Tax (Appeals) has failed to consider the additional evidence in spite of a remand report provided by Assessing officer and rejoinder placed on record by assessee having been received by the C1T(A) which is placed at Pages 271-276 of the Paper Book. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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