TMI Blog2024 (1) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... revised under section 263. In such circumstances, we assume that no such reassessment action was initiated in remaining six group entity. Only, the case of present assessee was reopened for three assessment years. Thus, the assessment of all six group entity have attained finality. We find that in the reasons recorded itself the assessing officer recorded that 11.64% of profit Rs. 7.93 Crore has escaped from assessment in the hand of present assessee. Such profit has already offered by Global Enterprises and has been accepted by the revenue. We are unable to subscribe that that fact that once, the profit of Rs. 7.93 Crore, which is declared by Global Enterprises and accepted by revenue, as to how its 11.64% being share of assessee can be again brought to tax. The assessing officer and the ld CIT(A) failed to appreciate the settled position under taxing statue that double taxation of similar revenue (income) is not permissible. There was no income which escaped from assessment, the receipt of income as indicated from the reasons recorded itself was taxed by the revenue in the hands of Global Enterprises. Hence, the reasons recorded itself was not sufficient and rather incorrec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Income Tax Officer was not justified in making addition of Rs. 92,33,526/- on account of construction work done by the assessee treated as taxable business receipts and the ld. CIT(A) has erred in confirming the same. 6. The appellant reserves the right to add, alter, amend or withdrawn any grounds of appeal. 2. Rival submissions of the both the parties were heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that reopening under section 147 in the present case is not valid, there was no escapement of income at all, thus, the assessment order passed in pursuance thereof is void ad initio and is liable to be declared as such. The ld AR for the assessee submits that he has very strong case on the validity of reopening. The reopening was based on wrong assumption of facts. While explaining such facts, the ld AR for the assessee submits that there were eight separate group companies including of assessee, each company owned some portion of land. The financial position of all seven companies and of assessee company, were not good, the land was purchased by them from loan obtained from the directors and shareholders. Du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85,09,339 - 85,09,339 27,33,690 2010-11 35,33,192 - 35,33,192 11,11,180 Total 2,90,68,349 6,23,00,000 9,13,68,349 3,19,68,107 4. Pursuant to search and survey action the assessment of Global Enterprises for three assessment years (AY 2008-09 2009-10) were completed under section 143(3) of the Act and the assessment for were completed by DCIT, Central Circle-1, Surat on 31.12.2009 and 29.12.2011 respectively. And assessment for AY 2010-11 was completed by ACIT, Circle 3, Surat on 28.02.2013. The copy of assessment order for AY 2008-09 of Global Enterprises is filed. There was certain other addition made by Central Circle-1, Surat and in further appeal the addition were deleted by Ld. CIT(A) and the order of CIT(A) was upheld, by the Hon'ble Tribunal Ahmedabad. 5. The ld AR for the assesse submits that out of eight companies, the return of one of such group company namely Akanksha Organisers Pvt. Ltd. was selected under scrutiny and the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, which is related party. To support his submissions, the ld AR for the assessee relied on the decision of Hon ble Apex Court in CIT Vs Glaxo Smithkline Asis (P) Limited (2010) 236 ITR 113(SC)/ 195 Taxman 35 SC and in Ashish Plastic Industries Vs ACIT in Civil Appeal No. 1509 of 2004. The ld AR for the assessee submits that even on merit of the addition the assessee has good case as neither the income is escaped nor the assessee concealed any income, entire income has been offered in the hand of Global Enterprises which is taxed at maximum marginal rate. Even of the proportionate income as per their contributions, it would have been revenue neutral. The assessing officer made additions in all years on the basis of imaginary calculation, which is quite difficult to understand. The assessing officer tried to calculate profit on the basis of registration deeds of flats in particular year, which is not possible as the assessee is following mercantile system of accounting. The ld AR for the assessee, thus on the basis of his submissions prayed for allowing all the appeal of the assessee on legal issues as well as on merit. 9. On the other hand, the ld. Senior departmental representa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 181 Guj, PCIT Vs Gokul Ceramics (2016) 71 taxmann.com 341 (Guj), Hon ble Supreme Court in ITO Vs Purushottam Dass Banger (1997) 90 Taxman 541 SC/ 227 ITR 362 SC, ITO Selected Dalurband Coal Co (P) Ltd (1996) 217 ITR 597 and Madras High Court in Sterlite Industries (India) Ltd Vs ACIT ( 2009) 177 Taxman 311/ 302 ITR 275- Madras. 10. We have considered the submissions of both the parties and have gone through the orders of the lower authorities carefully. We have also gone through all the case laws relied by the le representatives of the parties. There is no dispute that eight group entity agreed to contribute their land for development with Global Enterprises, which is also group concern, being partnership firm of the directors and the shareholders of those group entities. The share of land contribution in Global Enterprises by all eight company was in the following manners; Sr No. Name of the entity of group (Akansha Group) PAN Share in land 1 Aakansha Organisers Pvt Ltd AABCA 9583 E 11.64% 2 Ankush Constructi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost by eight companies to M/s Global Enterprises were not prohibited in any law including Income-tax Act. (iv) The cost on which properties were transferred by eight companies to the M/s Global Enterprises were at Rs. 774.41 per Sq. Ft. The Jantri rate was also not more than Rs. 455/- per Sq. Ft. And the assessee company has submitted the evidence in support in form sale deed at Rs. 455/- per Sq. Ft. was accepted by the sub-registrar. The-assessee company-has raised the issue that when the properties were transferred at cost so there is no actual profit in the hands of assessee company, then under which section of Income-tax Act income escaped in the hands the income is escaped in hands of assessee company. (v) The assesse also stated that Section 43CA or 50C were even applied even in that case the property is transferred at more than jantri value. In other words, in the reason recorded it is not mentioned under which section income is escaped in the hands of assessee company. (vi) The wording of reason recorded are borrowed from the order under section 263 of the Act passed by Ld. CIT-1, Surat in the case of Akanksha Organisers Pvt. Ltd in AY 2009-10 and (vii) 'When the view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of Rs. 1.70 Crore plus Rs, 6.23 Crore as discloser, thereby offered Rs. 7.93 Crore. We find that in the reasons recorded itself the assessing officer recorded that 11.64% of profit Rs. 7.93 Crore has escaped from assessment in the hand of present assessee. Such profit has already offered by Global Enterprises and has been accepted by the revenue. We are unable to subscribe that that fact that once, the profit of Rs. 7.93 Crore, which is declared by Global Enterprises and accepted by revenue, as to how its 11.64% being share of assessee can be again brought to tax. The assessing officer and the ld CIT(A) failed to appreciate the settled position under taxing statue that double taxation of similar revenue (income) is not permissible. 16. We find that Hon ble Supreme Court in Ashish Plastic Industries Vs ACIT in Civil Appeal No. 1509 of 2004 while considering the plea of assessee that sales which is found in their books of account, on which tax has been paid by M/s Ashish Agro Plastic Limited (sister concern), the Hon ble Court held that if the appellant is able to prove that tax on the income generated from the sale of the material has been paid by Ashish Agro Plastic Limi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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