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2022 (12) TMI 639 - AT - Income TaxAssessment u/s. 153A r.w.s. 153C - Incriminating material available on records found or not ? - HELD THAT - We hold that there is no incriminating material available on records which were found during the course of search which could have been used by the assessee for disturbing the returned income of the Assessee for AY 2010-11. Accordingly, we allow Ground no 1 of the Appeal. Resultantly, all additions made in the order do not survive. Non issue of notice u/s 143 (2) in case of assessment u/s 153C - HELD THAT - As we note that these discussions by the CIT(A) are beside the point inasmuch as in the submissions before us, the assesse has submitted that assessee has received notice u/s. 143(2) issued by AACIT, Circle 42, Mumbai to the assessee. Hence, this argument by the assessee before the CIT(A) that notice u/s. 143(2) has not been issued is not factually correct. Hence, the said issue by the assessee is dismissed. Correct head of income - sale of land and development rights - capital gain shown by assessee on sale of land and development rights, treated by it its computation of income as income chargeable to tax under the Head capital gains but learned AO considered it as income from Business and Profession - HELD THAT - Neither the AO, nor the ld. CIT (A) and ld. DR before us could not show above any incriminating material found during the course of search. In absence of incriminating material, we hold that orders of the ld. Lower Authorities are non-sustainable in view of the decision of honorable supreme court in case of Sinhgad Technical education society 2015 (4) TMI 190 - BOMBAY HIGH COURT . Hence we allow ground no 4 and 5 of the Appeal. Addition of on money income on account of sale of car parking - taxation of on money on sale of flats - HELD THAT - We find that both this issues were discussed by the coordinate bench in the case of the assessee for AY 2011 -12 2022 (2) TMI 808 - ITAT MUMBAI and held that there is no incriminating material available for making such addition in the hands of the assessee in case of a concluded assessment. Before us also same document andstatements are relied up on by the lower authorities as well as the ld. DR. Judicial Discipline demands that unless, there is manifest error, same needs to be followed. No infirmities werepointed before us by the ld. DR in the order of coordinate bench, therefore, there is no reason to deviate from the same. On careful analysis, we find that in the order of CIT (A) in appeal before us is identical to Para no 13 of the decision of the coordinate bench where the addition of unaccounted on money on sale of flats was confirmed by him the Ld. CIT (A) for AY 2011-12 . When the findings of ld. CIT (A) are ad verbatim for this appeal compared to AY 2011-12, where the coordinate bench has deleted the addition, we have no reason to differ from the same. Accordingly,ground no 6 7 of the appeal are allowed
Issues Involved:
1. Validity of the assessment order under section 153A r.w.s. 153C/143(3). 2. Requirement of notice under section 143(2). 3. Validity of approval under section 153D. 4. Taxation of Long Term Capital Gain as business income. 5. Taxation of Short Term Capital Gain as business income. 6. Addition on account of alleged income from the sale of car parking. 7. Addition on account of alleged on-money from the sale of flats. 8. Violation of principles of natural justice. Detailed Analysis: 1. Validity of the Assessment Order: The assessee challenged the assessment order on the grounds that it was not in accordance with the law as no incriminating material was found during the search. The Tribunal held that there was no specific incriminating material pertaining to the assessee found during the search on the Lodha Group. The Tribunal referred to the satisfaction note, which did not suggest any incriminating material specifically related to the assessee. The Tribunal concluded that the assessment order under section 153C was invalid due to the absence of incriminating material. 2. Requirement of Notice under Section 143(2): The assessee argued that the assessment order was invalid as no notice under section 143(2) was issued. The Tribunal noted that the issue was covered against the assessee by the decision of the coordinate bench in the assessee's own case for A.Y. 2011-12, which held that there is no requirement for such notice in assessment proceedings under section 153C. Consequently, this ground was dismissed. 3. Validity of Approval under Section 153D: The assessee contended that the approval obtained under section 153D was mechanical and invalid. The Tribunal did not find merit in this argument and upheld the approval as administrative, dismissing this ground. 4. Taxation of Long Term Capital Gain: The assessee declared Long Term Capital Gain on the sale of land, which the Assessing Officer treated as business income. The Tribunal found that there was no incriminating material to support this reclassification and followed the decision of the coordinate bench in the assessee's own case for A.Y. 2011-12. The Tribunal held that the reclassification was not sustainable and allowed this ground. 5. Taxation of Short Term Capital Gain: Similarly, the assessee declared Short Term Capital Gain on the sale of development rights, which the Assessing Officer also treated as business income. The Tribunal found no incriminating material to support this reclassification and allowed this ground based on the same reasoning as for the Long Term Capital Gain. 6. Addition on Account of Alleged Income from Sale of Car Parking: The Assessing Officer added an amount for unaccounted income from the sale of car parking based on the presumption that the sale of flats included car parking. The Tribunal found no specific incriminating material to support this addition and noted that the issue was covered by the coordinate bench's decision in the assessee's own case for A.Y. 2011-12. The Tribunal deleted the addition. 7. Addition on Account of Alleged On-Money from Sale of Flats: The Assessing Officer added an amount for on-money received from the sale of flats based on statements from employees of the Lodha Group. The Tribunal found that these statements did not pertain to the assessee and that there was no specific incriminating material. The Tribunal deleted the addition, following the coordinate bench's decision in the assessee's own case for A.Y. 2011-12. 8. Violation of Principles of Natural Justice: The assessee argued that the order violated the principles of natural justice. However, the Tribunal did not find any specific violation and did not address this ground separately in detail. Conclusion: The Tribunal allowed the appeal partly, holding that the assessment order under section 153C was invalid due to the absence of incriminating material and deleted the additions made by the Assessing Officer. The Tribunal dismissed the ground regarding the requirement of notice under section 143(2) and did not find merit in the argument regarding the invalidity of approval under section 153D. The Tribunal followed the coordinate bench's decisions in the assessee's own case for A.Y. 2011-12 in reaching its conclusions.
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