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TMI Blog2025 (3) TMI 1455X X X X Extracts X X X X X X X X Extracts X X X X ..... e reason that considering the date of the search, the AO could have legally issued notices u/s. 153A for six assessment years immediately preceding their relevant assessment year being A.Y. 2007-08 to 2012-13 but not, in any case, for the search year i.e. A.Y. 2013-14. The impugned assessment orders thus, having been passed absolutely without jurisdiction is void-ab-initio being a nullity in absence of specific sanction of law. The Id. AO having acted contrary to the provisions of law, the impugned order deserves to be quashed and set aside. 2. The impugned order passed u/s. 143(3)/254 r.w.s 153B (1) (b) dt. 29.12.2019 is bad in law and is in complete nullity for want of valid approval obtained prior to passing order mandated by S. 153D of the Act. The approval granted is mechanical without application of mind and is no valid approval as contemplated by law. Thus, the impugned assessment order deserves to be quashed and set aside. 3. Rs. 1,16,10,000/- The Id. CIT(A) has erred in law as well as in facts in confirming the additions made by the AO of Rs. 1,16,10,000/- which being completely contrary to the provisions of law and facts may kindly be deleted in full. 4. the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that this is the second round of litigation in this case before us. Earlier the matter was restored back to the file of the AO by the coordinate bench vide ITA No. 1042/JPR/2016 and C.O. No. 02/JPR/2017. Dated: 18.01.2019. In the original appeal the assessee approached the coordinate bench against the order of the Ld. CIT (A) against sustaining the addition of Rs. 10,80,000/- Whereas the Revenue approached the coordinate bench against the order of the Ld. CIT (A) against sustaining the addition of Rs. 10,80,000/- against the assessed addition of Rs. 1,16,10,000/-. 3. In compliance to the directions of the coordinate bench (supra), the case of the assessee was assessed again u/s. 143(3) r.w.s. 254 of the Act vide order dated: 29.12.2019 at a figure of Rs. 3, 90, 18,460/-. The assessee being aggrieved with the same preferred an appeal before the Ld. CIT (A), Udaipur-2, who in turn confirmed the order of the AO and dismissed the appeal of the assessee. The assessee being further aggrieved preferred the present appeal before us. We have gone through the orders of the AO, Ld. CIT (A) and order of the coordinate bench in the first round of appeal. It is observed that the figure of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of such assessment: Provided that such opportunity shall be given by the Assessing Officer by serving a notice calling upon the assessee to show cause, on a date and time to be specified in the notice, why the assessment should not be completed to the best of his judgment: Provided further that it shall not be necessary to give such opportunity in a case where a notice under sub-section (1) of section 142 has been issued prior to the making of an assessment under this section. (2) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year. 5. To appreciate the provisions mentioned (supra) in its right perspective and spirit, we deem it fit to discuss and rely on judicial pronouncement of Hon'ble Apex Court as under: [1978] 115 ITR 524 (SC) Brij Bhusha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent would be embedded in the turnover represented by the cost of such material but when stores/material was supplied by the Government department at fixed rates for being used, fixed or incorporated in the work on terms indicated above, there would be no element of profit involved in the turnover represented by the cost of such material. It is true that, ordinarily, when a works contract is put through or completed by a contractor the income or profits derived by the contractor from such contract is determined on the value of the contract as a whole and cannot be determined by considering several items that go to form such value of the contract but in our view where certain stores/material is supplied at fixed rates by the department to the contractor solely for being used or fixed or incorporated in the works undertaken on terms and conditions mentioned above, the real total value of the entire contract would be the value minus the cost of such stores/material so supplied. Therefore, since no element of profit was involved in the turnover represented by the cost of stores/material supplied by the M.E.S. to the assessee-firm, the income or profits derived by the assessee firm from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition to the extent of Rs. 10 Lacs out of Rs. 1.35 Cr. is sustained in addition to the income already disclosed voluntarily by the assessee. In these terms Ground No. 3 raised by the assessee is partly allowed. 9. Additional ground not pressed before us in view of divergent views from various Hon'ble High Courts. Hence the same is left undecided and open for the assessee to be raised at appropriate forum and time, if desired so. Hence the same is also rejected for statistical purposes. 10. As far as Ground No. 1 and 2 are concerned, as it is observed (supra) that it's a second round of appeal and all the earlier orders, i.e. order of the AO passed u/s. 143(3) r.w.s. 153B of the Act and the earlier order of the Ld. CIT (A) passed u/s. 250 of the Act have already been merged with the order of coordinate bench. Hence, no comments on the same are required as the earlier orders are no more in existence for all the legal purposes. As far as the latest assessment order passed u/s. 143(3) r.w.s. 254 of the Act is concerned, the same was passed in compliance to the directions issued by the coordinate bench. Hence in the light of this fact, the ground raised by the assessee for current ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... method this fact is not under challenged either by the revenue or by the assessee. 14. It is also being to our notice that the assessee had already offered to tax the income earned from the Project Completion Method in subsequent A.Y 2016- 17 and A.Y 2017-18. We have perused the specimen agreement between the assessee and buyers vide PB 57 -64 (relevant clauses 27,28,29,32 and 36) "27. It is also decided by the parties to this agreement that under no circumstances the possession of the said flat/unit and/or any portion of the said flat/ unit shall be given by the seller to the purchaser unless all payment required to be made under this agreement as upto the date by the purchaser to the seller have been made in full. It is also decided by the parties that purchaser will not be entitled to claim possession whatsoever in the said building until and unless he/she/they make full and final payment under this agreement. 28. That at the time of possession / execution of the necessary Sale Deed /Conveyance Deed for the said flat/unit, the purchaser has to sign a possession letter along with a letter of fitness in favour of the seller. The said possession letter will be treated as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an immovable property requires compulsory registration under the provisions of the Registration Act, 1917 and the transfer is considered completed only when the entire consideration is received by the seller from the buyer and thereafter possession is handed over to him. Even the cases of part performance u/s. 53A of TPA, 1882 cannot be considered to be a complete transfer in the context of the present case. Further no title can be validly transferred to the buyer by merely entering into a Sale Agreement in as much as the Sale Agreement cannot confer any legal title of ownership to the proposed buyer. The buyer may make the payment and comply with the conditions of the Agreement or may not. There is no prohibition upon a buyer to complete the transaction. By Clause No. 5 (PB 59) he has been given an option to get the booking cancelled and get his deposited amount back. The said Clause reads as under:- "Notwithstanding anything contained in para No. 4 in the event of non-payment of consequent installments the seller shall be entitled to cancel the agreement and the purchaser shall be left with no right under this agreement. The seller shall thereafter be free to deal with the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd held that advance benefits ought not to be taxed in this year-ITAT upheld view of CIT(A)-Held, applying three tests laid in various decisions, namely, whether income accrued to assessee is real or hypothetical; whether there is a corresponding liability of other party to pass on benefits of duty free import to assessee even without any imports having been made; and probability or improbability of realisation of benefits by assessee considered from a realistic and practical point of view, it was quite clear that in fact no real income but only hypothetical income had accrued to assessee and Section 28(iv) would be inapplicable-Secondly, consistent view had been taken in favour of assessee, starting with A.Y. 1992-93, that benefits under advance licenses or under duty entitlement pass book do not represent real income of assessee-Thus, there was no reason to take a different view unless there are very convincing reasons, none of which had been pointed out by revenue- Thirdly, there was no dispute that in subsequent FY, assessee did make imports and did derive benefits under advance license and duty entitlement pass book and paid tax thereon- Therefore, it was not as if revenue has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid appeals were entirely different. By reading the order of the tribunal as a whole, it is evident that the tribunal has taken note of the effect of Section 145 of the Act. Therefore, the aforesaid submission made on behalf of the revenue also does not deserve acceptance." 18. It is further observed that the AO has not brought any special reason as to why he is taking a departure from the past settled history between the assessee and the Department in as much as all along in the past, the assessee declared the results (Net Profit) by consistently following the Project Completion Method only and the policy as stated above and accordingly the ROI was filled. The Department not only accepted but also assessed the income declared without any variation right from AY 2007-08 to 2014-15. Asstt Year Assessing officer Assessment completed u/s Nature of addition Amount of addition (in Rs.) Remarks 2014-15 ACIT Central Circle Kota u/s 143(3) dt. 23.12.2016 Nil Nil Return Income Accepted 2013-14 ACIT Central Circle-3 Jaipur u/s 143(3) r.w.s. 153B dt.19.03.2015 Difference of undisclosed income declared during search 1,16,10,000/- Substantial relief allowed by CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 018-19 (PB 45-56). The advances received from the customers in the preceding years including current year, were all credited in A/c "Advances from Customers against Project" and were later on adjusted in the sales in A.Y. 2018-19. In support of this contention and for better appreciation, at a glance chart showing the details relating to of the receipt of flat advance bookings and the sales recognition of the flat sold was submitted before the AO (PB 25-32). On one hand, the income declared in A.Y. 2018-19 has been accepted, assessed and the Department received the tax on such income in that year. Whereas, on the other hand the AO after disturbing the declared income this year, taxed the entire advance of Rs. 3, 71, 74,468/- in this year which has clearly resulted into double taxation. The law is well settled that the same income cannot be taxed twice as held in the case of Mahaveer Kumar Jain vs. CIT (2018) 165 DTR 113 (SC). 21. Before the AO also the assessee submitted that the assessee has offered to Tax the income earned on "Aashirwad Gokul" by following the Project Completion Method in subsequent years i.e. AY 2017-18 of Rs. 18,86,86,000/- (PB 27,31&42) and AY 2018-19 of Rs.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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