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TMI Blog2014 (2) TMI 944X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in Chapter VIA of the Act, of course subject to fulfillment of the respective conditions - the phraseology of section 153A r.w. Explanation (i) does not support the premise arrived at by the CIT(A) – thus, the assessee's claim for deduction u/s 80IB(10) of the Act even with regard to the enhanced income was well within the scope and ambit of an assessment u/s 153A(1)(b) of the Act and the Assessing Officer was obligated to consider the same as per law. Factually, there is no material to negate the assertion of the assessee, which are borne out of the material on record, that 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 – thus, Relying CIT vs. Sheth Developers (P) Ltd. [2012 (8) TMI 159 - BOMBAY HIGH COURT] the claim of the assessee is justified – thus, assessee is eligible for deduction u/s 80IB(10) of the Act in relation to additional income offered in a statement u/s 132(4) of the Act in the course of search and subsequently declared in the return filed in response to notice u/s 153A(1)(a) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of income on 28.09.2008 declaring 'NIL' income which, inter-alia, included profits from execution of a housing project amounting to Rs.2,10,86,083/-, which was claimed as exempt u/s 80IB(10) of the Act. Thereafter, on 06.10.2009 there was a search action u/s 132(1) of the Act and in response to a notice issued u/s 153A(1)(a) of the Act, assessee furnished a return of income on 24.06.2010 disclosing total income of Rs.'NIL' after claiming deduction u/s 80IB(10) of the Act of Rs.2,46,89,494/-, as against a deduction of Rs.2,10,86,083/- claimed in the return of income originally filed u/s 139(1) of the Act. The enhanced claim of deduction u/s 80IB(10) of the Act was on account of an additional income of Rs.36,03,411/- declared by the assessee in the return filed in response to notice issued u/s 153A(1)(a) of the Act. The said additional income was declared on account of on-money received by it from its customers on sale of flats. The claim of the assessee was that the additional consideration received from the customers which was hitherto not declared in the regular books of account but declared in the statement deposed u/s 132(4) of the Act during the course of search, was noth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is not maintainable because (i) the undisclosed income declared by the assessee cannot be assessed under the head 'business income' but under the head 'income from other sources'; and, (ii) the benefits of Chapter VIA, which include section 80IB(10), are not applicable to an assessment made under sections u/s 153A to 153C of the Act. For the aforesaid reasons, the CIT(A) has upheld the action of the Assessing Officer. Not being satisfied with the order of the CIT(A), assessee is in further appeal before us. 8. Before us, the learned counsel for the assessee has vehemently pointed out that the lower authorities are not justified in denying the claim of deduction u/s 80IB(10) of the Act. The learned counsel pointed out that the additional income of Rs.36,03,411/- was declared in the course of search as consideration received from customers on sale of flats. Accordingly, it was nothing but additional sale price received by the assessee which was liable to be taxed as 'business income' relating to its housing project, 'The Crest' at Pimple Saudagar, Pune and therefore the same is eligible for benefits of section 80IB(10) of the Act. It is further pointed out that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lared such additional income as income from housing project, 'The Crest' at Pimple Saudagar, Pune. The declaration made in the return of income has not been disputed by the Assessing Officer. The only dispute raised by the Assessing Officer is with regard to nature of such 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 Crest' 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 Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not allowable because the requisite condition that the return of income has to be accompanied by the prescribed audit report has not been complied with by the assessee. On the basis of aforesaid reasons, the claim of the assessee has been opposed. 13. Sections 153A 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 153A 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, - (i) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er-technical, and superficial. Pertinently, the Assessing Officer has not altogether denied the claim of deduction and in any case, the claim was initially made in the return originally filed, 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 Pvt. Ltd. (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. In-fact, the judgment of the Hon'ble Supreme Court in the case of Sun Engineering Works Pvt. Ltd. (supra) is not an authority to say that assessee cannot raise a claim per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no material to negate the assertion of the assessee, which are borne out of the material on record, that 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 of Sheth Developers (P) Ltd. (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 80IB(10) benefits, such an income merely goes to enhance the 'business income' 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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