Anil Bhausaheb Murkute, Ahmednagar V. Dy. CIT, Ahmednagar

ITA 2413/PUN/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79884 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 05-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Business income; Income from undisclosed sources; Revised return
• Section: 143(3); 133A; 153A; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHE B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.2413/PN/2012 (ASSESSMENT YEAR : 2009-10) ANIL BHAUSAHEB MURKUTE, RUNANBANDHA APARTMENT, NEAR PROFESSOR COLONY, AHMEDNAGAR 414 003. PAN : ABAPM3610P . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX, AHMEDNAGAR CIRCLE, AHMEDNAGAR. . RESPONDENT ASSESSEE BY : MR. NIKHIL PATHAK DEPARTMENT BY : MR. S. P. WALIMBE DATE OF HEARING : 07-04-2014 DATE OF PRONOUNCEMENT : 26-05-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AG AINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, PUNE DA TED 30.10.2012 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 23.12.2011 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2009-10. 2. IN THIS APPEAL, ALTHOUGH, THE ASSESSEE HAS RAISE D MULTIPLE GROUNDS OF APPEAL BUT ESSENTIALLY THE SOLITARY ISSUE RELATES T O ASSESSEES CLAIM FOR DEDUCTION U/S 80IB(10) OF THE ACT IN RESPECT OF INC OME WHICH WAS DECLARED BY THE ASSESSEE IN THE COURSE OF SURVEY ACTION U/S 133 A OF THE ACT. 3. IN BRIEF, THE FACTS RELEVANT TO ADJUDICATE THE A FORESAID CONTROVERSY CAN BE SUMMARIZED AS FOLLOWS. ASSESSEE IS AN INDIVIDUA L ENGAGED IN THE BUSINESS OF PROMOTERS AND BUILDERS AND FOR THE ASSESSMENT YE AR UNDER CONSIDERATION, HE FILED A RETURN OF INCOME ON 28.09.2009 DECLARING TOTAL INCOME OF ITA NO.2413/PN/2012 A.Y. 2009-10 RS.2,30,295/- WHICH, INTER-ALIA, CONTAINED A CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT OF RS.18,41,582/-. THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT WAS RELATING TO THE PROFITS DERIVED FROM TWO HOUSING PR OJECTS, NAMELY, KADAMBARI NAGARI-II AND KADAMBARI NAGARI-III, WHICH WERE EXEC UTED BY THE ASSESSEE. SUBSEQUENTLY, ON 16/17.02.2010 A SURVEY ACTION U/S 133A OF THE ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE WHEREIN A DIARY WAS FOUND WHICH EVIDENCED RECEIPT OF ON-MONEY FROM THE CUSTOMERS ON ACCOUNT OF SALE OF FLATS, AND SUCH ON-MONEY RECEIPTS WERE NOT FOUND RECORDED IN THE REGULAR BOOKS OF ACCOUNT. SUCH UNRECORDED RECEIPTS AMOUNTED TO RS.40,71,000/-. IN THE COURSE OF A STATEMENT RECOR DED ON 17.02.2010, ASSESSEE DECLARED THE AFORESAID AMOUNT AS ADDITIONA L INCOME, HAVING BEEN DERIVED FROM EXECUTION OF THE HOUSING PROJECT, KADA MBARI NAGARI-III. AS A CONSEQUENCE OF SUCH DECLARATION OF ADDITIONAL INCOM E, ASSESSEE FURNISHED A REVISED RETURN ON 01.10.2010 INCORPORATING SUCH ADD ITIONAL INCOME BUT WHILE DOING SO HE ENHANCED HIS CLAIM OF DEDUCTION U/S 80I B(10) OF THE ACT TO RS.59,12,582/- AS AGAINST A CLAIM OF RS.18,41,582/- MADE IN THE ORIGINAL RETURNED OF INCOME. THE ENHANCED CLAIM WAS IN RESP ECT OF THE ADDITIONAL INCOME BY WAY OF ON-MONEY RECEIVED ON SALE OF FLATS IN THE HOUSING PROJECT, WHICH AMOUNTED TO RS.40,71,000/-. IN THE ASSESSMEN T PROCEEDINGS, THE ASSESSING OFFICER ALLOWED THE CLAIM OF THE ASSESSEE U/S 80IB(10) OF THE ACT TO THE EXTENT OF RS.18,41,582/-, AS CLAIMED IN THE ORI GINAL RETURN OF INCOME BUT DECLINED THE SAME WITH RESPECT TO THE ADDITIONAL IN COME OF RS.40,71,000/- WHICH WAS OFFERED/DECLARED IN THE COURSE OF SURVEY. THE AFORESAID ACTION OF THE ASSESSING OFFICER HAS BEEN FURTHER SUSTAINED BY THE CIT(A) AND ACCORDINGLY, ASSESSEE IS IN FURTHER APPEAL BEFORE U S. 4. THE REASONING ADVANCED BY THE INCOME-TAX AUTHORI TIES TO DENY THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT IN RESPE CT OF AMOUNT OF RS.40,71,000/- IS TWO FOLD. FIRSTLY, THAT THE UNDI SCLOSED INCOME DECLARED BY THE ASSESSEE ON ACCOUNT OF ON-MONEY RECEIPT ON SALE OF FLATS IN THE HOUSING ITA NO.2413/PN/2012 A.Y. 2009-10 PROJECT CANNOT BE ASSESSED AS BUSINESS INCOME BUT I S ELIGIBLE TO BE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES. SECONDLY , THAT THE BENEFITS OF CHAPTER VI-A ARE NOT APPLICABLE TO THE IMPUGNED SUM BECAUSE IT WAS NOT CLAIMED IN THE ORIGINAL RETURN OF INCOME OR IN THE AUDIT REPORT; AND, SUCH AMOUNT WAS NOT RECORDED IN THE REGULAR BOOKS OF ACC OUNT. 5. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE VEHEMENTLY SUBMITTED THAT THE CLAIM HAS BEEN UNJUSTLY DENIED BY THE INCO ME-TAX AUTHORITIES. IT IS SOUGHT TO BE POINTED OUT THAT THE IMPUGNED AMOUNT W AS RECORDED IN A DIARY FOUND IN THE COURSE OF SURVEY AND THE NOTINGS SHOW THAT SUCH AMOUNT WAS RECEIVED FROM CUSTOMERS ON SALE OF FLATS OVER AND A BOVE THE AMOUNTS SHOWN IN THE REGULAR SALE DEEDS. THEREFORE, IT WAS SOUGH T TO BE CONTENDED THAT THE IMPUGNED SUM WAS NOTHING BUT ADDITIONAL SALE PRICE RECEIVED BY THE ASSESSEE ON SALE OF FLATS IN ITS HOUSING PROJECT, KADAMBARI NAGARI-III AND THEREFORE IT WAS LIABLE TO BE TREATED AS A PROFIT DERIVED FROM EXECU TION OF THE HOUSING PROJECT, WHICH HAS BEEN OTHERWISE FOUND TO BE ELIGIBLE FOR D EDUCTION U/S 80IB(10) OF THE ACT. IT IS ALSO POINTED OUT THAT THERE IS NO BAR U NDER THE ACT THAT DEDUCTION U/S 80IB(10) OF THE ACT CANNOT BE ALLOWED ON AN INCOME FOUND DURING THE SURVEY SO LONG AS ASSESSEE CAN DEMONSTRATE THAT THE CHARAC TER OF SUCH INCOME IS ELIGIBLE FOR THE BENEFITS OF SECTION 80IB(10) OF TH E ACT. IN THE COURSE OF SUBMISSIONS, HE HAS RELIED UPON THE RECENT DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF M/S MALPANI ESTATES VS. ACI T VIDE ITA NOS.2296 TO 2298/PN/2012 ORDER DATED 30.01.2014, WHEREIN INCOME BY WAY OF UNRECORDED SALE PRICE ON SALE OF FLATS IN A PROJECT, WHICH WAS FOUND IN THE COURSE OF SEARCH, WAS HELD ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. THE LEARNED COUNSEL HAS ALSO RELIED UPON THE PARITY OF REASONING LAID D OWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SHETH DEVELOPERS (P) LTD., (2012) 254 CTR 127 (BOM) AND THE IN THE CASE OF CIT VS. GEM PLUS J EWELLERY INDIA LTD., (2010) 330 ITR 175 (BOM). ITA NO.2413/PN/2012 A.Y. 2009-10 6. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPR ESENTATIVE APPEARING FOR THE REVENUE REITERATED THE REASONING ADOPTED BY THE LOWER AUTHORITIES TO ASSAIL THE CLAIM OF THE ASSESSEE, WHICH IS ON THE S AME LINES NOTED BY US IN PARA 4 ABOVE AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 7. IN OUR CONSIDERED OPINION, HAVING REGARD TO THE MATERIAL ON RECORD IT IS QUITE CLEAR THAT THE IMPUGNED SUM HAS BEEN EARNED B Y THE ASSESSEE ON SALE OF FLATS IN THE HOUSING PROJECT, KADAMBARI NAGARI-I II. IT IS ALSO EVIDENT THAT SUCH AMOUNT OF RS.40,71,000/- WAS NOT FOUND RECORDE D IN THE REGULAR BOOKS OF ACCOUNT. HOWEVER, DURING THE COURSE OF SURVEY ACTI ON U/S 133A OF THE ACT ON THE BUSINESS PREMISES OF THE ASSESSEE, A DIARY WAS FOUND WHICH REFLECTED THE AFORESAID AMOUNT AS HAVING BEEN RECEIVED FROM VARIO US CUSTOMERS AGAINST SALE OF FLATS TO THEM AND IT WAS ALSO APPARENT THAT THE SAID SUMS WERE OVER AND ABOVE THE AMOUNT OF SALE PRICE DECLARED IN THE RESP ECTIVE SALE DEEDS. IN-FACT, IN THE COURSE OF HIS DEPOSITION TO THE ASSESSING OF FICER AT THE TIME OF SURVEY, A COPY OF WHICH HAS BEEN PLACED IN THE PAPER BOOK AT PAGES 159 TO 165, ASSESSEE ADMITTED THE AFORESAID POSITION. PERTINEN TLY, THE NOTINGS IN THE DIARY WERE SO APPARENT THAT THE QUESTION NO.10 PUT TO THE ASSESSEE IN THE COURSE OF SUCH DEPOSITION BROUGHT OUT THE FACT THAT SUCH AMOU NTS WERE RECEIVED BY THE ASSESSEE FROM THE CUSTOMERS OVER AND ABOVE THE AMOU NT RECORDED IN THE SALE DEEDS. IN RESPONSE TO SUCH QUESTION, ASSESSEE ADMI TTED SUCH ADDITIONAL INCOME BECAUSE IT WAS NOT FOUND RECORDED IN THE REG ULAR BOOKS OF ACCOUNT. THE ASSESSEE FOLLOWED UP SUCH DECLARATION BY REVISI NG HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2009-10 AND INCLUDED SUCH INCOME AS OTHER INCOME, SINCE ORIGINAL RETURN OF INCOME FILED PRIOR TO DATE OF SU RVEY DID NOT CONTAIN SUCH INCOME. BECAUSE THE ASSESSEE STATED THE AFORESAID AMOUNT IN THE REVISED RETURN OF INCOME AS OTHER INCOME, THE REVENUE CON TENDS THAT ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT WITH RESPECT TO SUCH INCOME. NOW, THE MOOT QUESTION IS WHETHER MERELY BECAUSE TH E ASSESSEE STATED IT AS OTHER INCOME IN THE REVISED RETURN, CAN IT BE SAI D THAT THE SAID INCOME WAS NOT ITA NO.2413/PN/2012 A.Y. 2009-10 DERIVED BY THE ASSESSEE FROM EXECUTION OF HOUSING P ROJECT, KADAMBARI NAGARI- III IN QUESTION, ESPECIALLY IN THE BACKGROUND OF TH E FACT-SITUATION NOTED IN THE EARLIER LINES. THE ANSWER IS CLEARLY NO, BECAUSE THE SOURCE OF EARNING OF THE IMPUGNED SUM IS NOTHING BUT ADDITIONAL SALE PRICE R ECEIVED FROM CUSTOMERS ON SALE OF FLATS IN THE HOUSING PROJECT, WHICH WAS NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT. THEREFORE, ONCE THERE IS NO DISP UTE ON THE SOURCE OF INCOME, THE ASSESSABILITY THEREOF HAS TO FOLLOW. T HUS, FACTUALLY SPEAKING, THE AFORESAID INCOME HAS BEEN DERIVED BY THE ASSESSEE I N THE COURSE OF EXECUTION OF HIS HOUSING PROJECT, THOUGH NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT. THE ACTION OF THE ASSESSEE OF STATING THE IMPUGNED INCOME AS OTHER INCOME IS NOT DETERMINATIVE OF THE SOURCE AND NATURE OF IN COME, WHICH WAS LIABLE TO BE DECIDED ON THE BASIS OF THE MATERIAL AND EVIDENCE O N RECORD. IF THE REVENUE PUTS PREMIUM ON THE ACTION OF THE ASSESSEE IN STATI NG THE IMPUGNED INCOME AS OTHER INCOME IN THE REVISED RETURN OF INCOME THEN IT WOULD ALSO BE APPROPRIATE TO NOTE THAT IN THE SAME VERY RETURN ASSESSEE CLAIM ED DEDUCTION U/S 80IB(10) OF THE ACT IN RELATION TO SUCH INCOME, WHICH SHOWS THE INTENTION OF THE ASSESSEE OF CHARACTERIZING THE SAID INCOME AS HAVIN G BEEN DERIVED FROM EXECUTION OF THE HOUSING PROJECT. IN THIS BACKGROU ND, IN OUR CONSIDERED OPINION, THE STAND OF THE INCOME-TAX AUTHORITIES TO SAY THAT SUCH INCOME WAS NOT DERIVED FROM THE HOUSING PROJECT IS QUITE UNTEN ABLE. 8. IN THE ABOVE FACT-SITUATION, IT IS QUITE CLEAR T HAT THE SAID INCOME IS LIABLE TO BE CONSIDERED AS ELIGIBLE FOR THE CLAIM OF DEDUC TION U/S 80IB(10) OF THE ACT. AT THIS POINT, WE MAY ALSO OBSERVE THAT A SOMEWHAT SIMILAR SITUATION HAS BEEN CONSIDERED BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF M/S MALPANI ESTATES (SUPRA). IN THE SAID CASE, IN THE COURSE O F A SEARCH, ASSESSEE DEPOSED IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT AND DECLARED CERTAIN ADDITIONAL INCOME PERTAINING TO A HOUSING PROJECT. THE ADDITIONAL INCOME DECLARED WAS ON ACCOUNT OF ON-MONEY RECEIVED FROM C USTOMERS TO WHOM FLATS WERE SOLD IN THE SAID PROJECT. IN AN ASSESSMENT FR AMED CONSEQUENT TO THE ITA NO.2413/PN/2012 A.Y. 2009-10 DECLARATION MADE AT THE TIME OF SEARCH, ASSESSEE PU T-FORTH A CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT IN RELATION TO SU CH INCOME, WHICH WAS DENIED BY THE INCOME-TAX AUTHORITIES ON SIMILAR OBJECTIONS AS HAVE BEEN RAISED IN THE PRESENT CASE BEFORE US. THE TRIBUNAL AFTER CONSIDE RING THE PARITY OF REASONING LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE C ASES OF SHETH DEVELOPERS (P) LTD. (SUPRA) AS WELL AS GEM PLUS JEW ELLERY INDIA LTD. (SUPRA) HELD THE ASSESSEE ELIGIBLE FOR THE CLAIM OF DEDUCTI ON U/S 80IB(10) OF THE ACT IN RELATION TO SUCH INCOME. HAVING REGARD TO THE FACT S AND CIRCUMSTANCES OF THE PRESENT CASE, IN OUR OPINION, THE RATIO OF THE DECI SION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF M/S MALPANI ESTATES (SUPRA) SQUARELY APPLIES IN THE PRESENT CASE TOO. THE RELEVANT PORTION OF THE ORDE R OF THE TRIBUNAL IN THE CASE OF M/S MALPANI ESTATES (SUPRA) READS AS UNDER :- 10. IN THE PRESENT CASE, IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS DERIVED INCOME FROM UNDERTAKING A HOUSING PROJECT, THE CREST AT PIMPLE SAUDAGAR, PUNE, WHICH IS ELIGIBLE FOR SECTION 80IB( 10) BENEFITS. IN THE RETURN OF INCOME ORIGINALLY FILED U/S 139(1) OF THE ACT, A SSESSEE HAD CLAIMED DEDUCTION U/S 80IB(10) OF THE ACT IN RELATION TO TH E PROFITS DERIVED FROM THE SAID HOUSING PROJECT AND THE SAME STANDS ALLOWED EVEN IN THE IMPUGNED ASSESSMENT WHICH HAS BEEN MADE U/S 153A(1)(B) OF TH E ACT AS A CONSEQUENCE OF A SEARCH ACTION U/S 132(1) OF THE AC T. 11. IN THE COURSE OF SEARCH, IN A STATEMENT DEPOSED U/S 132(4) OF THE ACT, ASSESSEE DECLARED CERTAIN ADDITIONAL INCOM E PERTAINING TO THE HOUSING PROJECT IN QUESTION. THE ADDITIONAL INCOME DECLARE D WAS ON ACCOUNT OF ON- MONEY RECEIVED FROM THE CUSTOMERS TO WHOM FLATS WER E SOLD IN THE SAID PROJECT. AT THE TIME OF HEARING, LEARNED COUNSEL R EFERRED TO THE COPY OF STATEMENT RECORDED U/S 132(4) OF THE ACT OF SHRI RA JESH MALPANI, A PARTNER OF THE ASSESSEE FIRM AND ALSO COPIES OF SOME OF THE SE IZED PAPERS, WHICH INDICATED RECEIPT OF ON-MONEY, AND THE SAME HAVE PL ACED IN THE PAPER BOOK AT PAGES 35 TO 52. A PERUSAL OF THE SEIZED MATERIA L SHOWS THAT A COMPLETE DETAIL OF THAT ON-MONEY RECEIVED IS ENUMERATED, VIZ . NAME OF THE CUSTOMERS, AMOUNT AND THE RESPECTIVE FLAT SOLD IN THE PROJECT. EVEN IN THE DEPOSITION MADE U/S 132(4) OF THE ACT, THE PARTNER OF THE ASSE SSEE FIRM MADE A YEARWISE DETAIL OF ADDITIONAL INCOME DECLARED ON ACCOUNT OF ON-MONEY RECEIVED ON SALE OF FLATS IN THE PROJECT. ACCORDINGLY, THE IMPUGNED SUM HAS BEEN DECLARED AS UNACCOUNTED INCOME FROM THE HOUSING PROJECT IN QUES TION. IN THE RETURN OF INCOME FILED IN RESPONSE OF NOTICE ISSUED U/S 153A( 1)(A) OF THE ACT, ASSESSEE HAS DECLARED SUCH ADDITIONAL INCOME AS INCOME FROM HOUSING PROJECT, THE CREST AT PIMPLE SAUDAGAR, PUNE. THE DECLARATION M ADE IN THE RETURN OF INCOME HAS NOT BEEN DISPUTED BY THE ASSESSING OFFIC ER. THE ONLY DISPUTE RAISED BY THE ASSESSING OFFICER IS WITH REGARD TO N ATURE OF SUCH INCOME, WHICH ACCORDING TO THE ASSESSING OFFICER DOES NOT FALL U NDER OF THE ANY HEADS OF INCOME AS DESCRIBED U/S 14 OF THE I.T. ACT. IN CO MING TO SUCH CONCLUSION, HE HAS DISAGREED WITH THE STAND OF THE ASSESSEE THAT S UCH ADDITIONAL INCOME WAS A BUSINESS INCOME OF THE ASSESSEE RELATING TO THE HOUSING PROJECT, THE CREST AT PIMPLE SAUDAGAR, PUNE. HOWEVER, AS PER T HE CIT(A), THE INCOME IN ITA NO.2413/PN/2012 A.Y. 2009-10 QUESTION IS ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. OSTENSIBLY, THE CIT(A) HAS NOT AGREED WITH THE INFE RENCE OF THE ASSESSING OFFICER THAT THE IMPUGNED INCOME DOES NOT FALL UNDE R 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, A S 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 REVENUE IS NOT IN APPEAL ON THIS ASPECT. BE THAT AS IT MAY, FACTUALLY SPEAKING, IT CANNOT BE DENIED THAT THE ADDITIONAL I NCOME IN QUESTION RELATES TO THE HOUSING PROJECT, THE CREST AT PIMPLE SAUDAGAR , PUNE UNDERTAKEN BY THE ASSESSEE. THE MATERIAL SEIZED IN THE COURSE OF SEA RCH; THE DEPOSITION MADE BY THE ASSESSEES PARTNER DURING SEARCH U/S 132(4) OF THE ACT; AND, ALSO THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE ISSUED U/S 153A(1)(A) OF THE ACT AFTER THE SEARCH, CLEARLY SHOW THAT THE SOURCE OF I MPUGNED ADDITIONAL INCOME IS THE HOUSING PROJECT, THE CREST AT PIMPLE SAUDA GAR, PUNE. THE AFORESAID MATERIAL ON RECORD DEPICTS THAT THE IMPUGNED INCOME IS NOTHING BUT UNACCOUNTED MONEY RECEIVED BY THE ASSESSEE FROM CUS TOMERS ON ACCOUNT OF SALE OF FLATS OF ITS HOUSING PROJECT, THE CREST A T PIMPLE SAUDAGAR, PUNE. CLEARLY, THE SOURCE OF THE ADDITIONAL INCOME IS THE SALE OF FLATS IN THE HOUSING PROJECT, THE CREST. THEREFORE, ONCE THE SOURCE O F INCOME IS ESTABLISHED THE ASSESSABILITY THEREOF HAS TO FOLLOW. THE NATURE OF INCOME, THUS ON FACTS, HAS TO BE TREATED AS BUSINESS INCOME ALBEIT, THE SAME WA S NOT ACCOUNTED FOR IN THE ACCOUNT BOOKS. IN THIS MANNER, WE ARE UNABLE TO AC CEPT THE STAND OF THE ASSESSING OFFICER OR OF THE CIT(A) THAT THE SAID IN COME IS NOT LIABLE TO BE TAXED AS BUSINESS INCOME. 12. NOW, COMING TO THE POINT AS TO WHETHER SUCH BU SINESS INCOME QUALIFIES TO BE ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT IN THE COURSE OF AN ASSESSMENT MADE U/S 153A(1)(B) OF THE ACT. ON THIS ASPECT, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSE SSMENT IN CASES OF SEARCH ACTION OR REQUISITION ARE MADE U/S 153A OR 1 53C OF THE ACT IN ORDER TO ASSESS UNDECLARED INCOMES AND SUCH PROVISIONS ARE F OR THE BENEFIT OF THE REVENUE AND THEREFORE A CLAIM U/S 80IB(10) OF THE A CT CANNOT BE CONSIDERED IN SUCH PROCEEDINGS, ESPECIALLY WHEN SUCH A CLAIM W AS NOT MADE IN THE RETURN OF INCOME ORIGINALLY FILED UNDER SECTION 139 OF THE ACT. IN THIS REGARD, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS REFERRED TO THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SUN EN GINEERING WORKS PVT. LTD., 198 ITR 297 (SC) TO POINT OUT THAT EVEN IN TH E CASES OF RE-ASSESSMENT U/S 147/148 OF THE ACT FRESH CLAIMS CANNOT BE RAISE D BY THE ASSESSEE. SECONDLY, IT IS POINTED OUT BY THE LEARNED DEPARTME NTAL REPRESENTATIVE THAT EVEN IF THE CLAIM WAS TO BE CONSIDERED THEN IT WAS NOT ALLOWABLE BECAUSE THE REQUISITE CONDITION THAT THE RETURN OF INCOME HAS T O 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 ASSESS EE HAS BEEN OPPOSED. 13. SECTIONS 153A TO 153C OF THE ACT CONTAIN PROVIS IONS RELATING TO ASSESSMENTS TO BE MADE IN CASES WHERE SEARCH IS INI TIATED U/S 132 OR A REQUISITION IS MADE U/S 132A OF THE ACT AFTER 31 ST MAY, 2003. CLAUSE (B) OF SUB-SECTION (1) OF SECTION 153A POSTULATES ASSESSME NT OR RE-ASSESSMENT OF TOTAL INCOME OF SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUC ED 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 HE REBY DECLARED THAT, - (I) SAVE AS OTHERWISE PROVIDED IN THIS SECTION, SEC TION 153B AND SECTION 153C, ALL OTHER PROVISIONS OF THIS ACT SHAL L APPLY TO THE ASSESSMENT MADE UNDER THIS SECTION. ITA NO.2413/PN/2012 A.Y. 2009-10 14. IN TERMS OF THE ABOVE REFERRED CLAUSE (I) OF TH E EXPLANATION, IT IS EVIDENT THAT ALL THE PROVISIONS OF THE ACT SHALL AP PLY TO AN ASSESSMENT MADE U/S 153A OF THE ACT SAVE AS OTHERWISE PROVIDED IN T HE SAID SECTION, OR IN SECTION 153B OR SECTION 153C OF THE ACT. IN THE BA CKGROUND OF THE EXPRESSION ALL OTHER PROVISIONS OF THIS ACT SHALL APPLY CONT AINED IN EXPLANATION (I) BELOW SECTION 153A OF THE ACT, AND IN THE CONTEXT OF THE CONTROVERSY BEFORE US, THE MOOT POINT TO BE EXAMINED IS AS TO WHETHER OR NOT D EDUCTIONS ENUMERATED IN CHAPTER VIA OF THE ACT ARE TO BE CONSIDERED IN MAKI NG AN ASSESSMENT MADE U/S 153A(1)(B) OF THE ACT. SECTION 153A(1)(B) OF T HE ACT REQUIRES THE ASSESSING OFFICER TO ASSESS OR REASSESS THE TOTAL INCOME OF THE ASSESSMENT YEARS SPECIFIED THEREIN. OSTENSIBLY, SECTION 80A(1) OF THE ACT PRESCRIBES THAT IN COMPUTING THE TOTAL INCOME OF AN ASSESSEE, THE RE SHALL BE ALLOWED FROM HIS TOTAL INCOME THE DEDUCTIONS SPECIFIED IN CHAPTER VIA OF THE ACT. THE MOOT POINT IS AS TO WHETHER THE AFORESTATED POSITION PRE VAILS IN AN ASSESSMENT MADE U/S 153A(1)(B) OR NOT? IN OUR CONSIDERED OPINION, HAVING REGARD TO THE EXPRESSION ALL OTHER PROVISIONS OF THIS ACT SHALL APPLY TO THE ASSESSMENT MADE UNDER THIS SECTION IN EXPLANATION (I) OF SECTION 1 53A OF THE ACT, IT CLEARLY IMPLIES THAT IN ASSESSING OR REASSESSING THE TOTAL INCOME FOR THE ASSESSMENT YEARS SPECIFIED IN SECTION 153A(1)(B) OF THE ACT, T HE IMPORT OF SECTION 80A(1) OF THE ACT COMES INTO PLAY, AND THERE SHALL BE ALLOWED THE DEDUCTIONS SPECIFIED IN CHAPTER VIA OF THE ACT, OF COURSE SUBJECT TO FULFIL LMENT OF THE RESPECTIVE CONDITIONS. THEREFORE, WE ARE UNABLE TO SUBSCRIBE TO THE STAND OF THE CIT(A) TO THE EFFECT THAT THE BENEFITS OF CHAPTER VIA OF T HE ACT, WHICH INTER-ALIA INCLUDE SECTION 80IB(10) OF THE ACT, ARE NOT APPLICABLE TO AN ASSESSMENT MADE UNDER SECTIONS 153A TO 153C OF THE ACT. IN OUR CONSIDERE D OPINION, THE PHRASEOLOGY OF SECTION 153A R.W. EXPLANATION (I) AS NOTED ABOVE , DOES NOT SUPPORT THE PREMISE ARRIVED AT BY THE CIT(A) AND ACCORDINGLY, T HE SAME IS REJECTED. THEREFORE, ASSESSEES CLAIM FOR DEDUCTION U/S 80IB( 10) OF THE ACT EVEN WITH REGARD TO THE ENHANCED INCOME WAS WELL WITHIN THE S COPE AND AMBIT OF AN ASSESSMENT U/S 153A(1)(B) OF THE ACT AND THE ASSESS ING OFFICER WAS OBLIGATED TO CONSIDER THE SAME AS PER LAW. 15. THE OTHER ARGUMENT OF THE LD. CIT-DR TO THE EFF ECT THAT THE RETURN OF INCOME WAS NOT ACCOMPANIED BY THE PRESCRI BED AUDIT REPORT ON THE ENHANCED CLAIM OF DEDUCTION IS TOO HYPER-TECHNICAL, AND SUPERFICIAL. PERTINENTLY, THE ASSESSING OFFICER HAS NOT ALTOGETH ER 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 HONBLE 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 HONBLE SUPREME COURT HAS OBSERVED THAT REOPENING O F AN ASSESSMENT U/S 147/148 IS FOR THE BENEFIT OF THE REVENUE. IN THE CASE BEFORE THE HONBLE SUPREME COURT, ASSESSEE WANTED TO SET-OFF LOSS AGAI NST THE ESCAPED INCOME WHICH WAS TAXED IN THE RE-ASSESSMENT PROCEEDINGS AN D THE CLAIM OF SUCH SET- OFF WAS NOT MADE IN THE RETURN OF INCOME ORIGINALLY FILED. ACCORDING TO THE HONBLE SUPREME COURT, THE CLAIM WAS NOT ENTERTAINA BLE BECAUSE THE SAID CLAIM NOT CONNECTED WITH THE ASSESSMENT OF ESCAPED INCOME. IN-FACT, THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F SUN ENGINEERING WORKS PVT. LTD. (SUPRA) IS NOT AN AUTHORITY TO SAY THAT A SSESSEE CANNOT RAISE A CLAIM PERTAINING TO AN ISSUE WHICH IS CONNECTED TO THE AS SESSMENT OF ESCAPED INCOME. IN-FACT, IF A CLAIM WHICH IS CONNECTED TO THE ESCAPED INCOME IS SET-UP BEFORE THE ASSESSING OFFICER IN THE COURSE OF RE-AS SESSMENT PROCEEDINGS, THE SAME IS LIABLE TO BE CONSIDERED AND THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF SUN ENGINEERING WORKS PVT. LTD . (SUPRA) ONLY PRECLUDES SUCH NEW CLAIMS BY THE ASSESSEE WHICH ARE UNCONNECT ED WITH THE ITA NO.2413/PN/2012 A.Y. 2009-10 ASSESSMENT OF ESCAPED INCOME. IN THE PRESENT CASE, WE ARE DEALING WITH AN ASSESSMENT U/S 153A OF THE ACT AND THE SCOPE OF SUC H AN ASSESSMENT HAS ALREADY BEEN EXAMINED BY US IN THE CONTEXT OF THE R ELEVANT SPECIFIC PROVISIONS, WHICH DO NOT LEAVE ANY SCOPE FOR AMBIGUITY. THE JU DGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF SUN ENGINEERING WORKS PVT. LTD. (SUPRA) HAS BEEN RENDERED ON A DIFFERENT FOOTING AND IS STRICTL Y NOT APPLICABLE TO THE PRESENT PROCEEDINGS. SO, HOWEVER, EVEN IF ONE WERE TO IMPORT THE REASONING RAISED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE B ASED ON THE JUDGMENT OF THE HONBLE SUPREME COURT, TO THE PRESENT CASE, YET WE DO NOT FIND THAT IT WOULD DEBAR THE ASSESSEE FROM CLAIMING DEDUCTION U/ S 80IB(10) OF THE ACT ON THE IMPUGNED ADDITIONAL INCOME DECLARED IN THE RETU RN FILED IN RESPONSE TO NOTICE U/S 153A(1)(A) OF THE ACT. IN THE PRESENT C ASE, THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT WAS MADE IN THE RETURN OF I NCOME ORIGINALLY FILED AND IN THE RETURN FILED IN PURSUANCE TO THE NOTICE U/S 153 A(1)(A) OF THE ACT, THE CLAIM U/S 80IB(10) OF THE ACT IS ONLY ENHANCED AND THEREF ORE, IT IS NOT A FRESH CLAIM. THEREFORE, IN OUR VIEW, THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF SUN ENGINEERING WORKS PVT. LTD. (SUPRA) DOES NOT HELP THE REVENUE IN THE PRESENT CASE. 17. IN-FACT, THE HONBLE BOMBAY HIGH COURT IN THE C ASE OF SHETH DEVELOPERS (P) LTD. (SUPRA) WAS CONSIDERING THE CLA IM OF DEDUCTION U/S 80IB(10) OF THE ACT IN RELATION TO THE UNDISCLOSED INCOME DECLARED CONSEQUENT TO THE SEARCH ACTION. IN THE CASE BEFORE THE HONB LE HIGH COURT, IT WAS FACTUALLY EMERGING THAT UNDISCLOSED INCOME WAS EARN ED BY THE ASSESSEE IN THE COURSE OF CARRYING ON HIS BUSINESS ACTIVITY OF A BUILDER AND THE SAME WAS ACCEPTED BY THE DEPARTMENT, BUT THE CLAIM OF THE DE DUCTION U/S 80IB(10) WAS DENIED IN RELATION TO SUCH INCOME. HOWEVER, THE CLA IM WAS UPHELD BY THE HONBLE BOMBAY HIGH COURT. IN THE PRESENT CASE, FA CTUALLY, THERE IS NO MATERIAL TO NEGATE THE ASSERTION OF THE ASSESSEE, W HICH ARE BORNE OUT OF THE MATERIAL ON RECORD, THAT THE ADDITIONAL INCOME IN Q UESTION HAS BEEN RECEIVED IN THE COURSE OF CARRYING ON ITS BUSINESS ACTIVITY OF DEVELOPING THE HOUSING PROJECT, THE CREST AT PIMPLE SAUDAGAR, PUNE, WHIC H IS ELIGIBLE FOR SECTION 80IB(10) BENEFITS. THEREFORE, IN TERMS OF THE PARI TY OF REASONING LAID DOWN BY THE HONBLE 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) BENEFI TS, 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 HONBLE BOMBAY HIGH COURT IN THE CASE OF GEM PLUS JEWELLERY INDIA LTD. (SUPRA). 19. IN THE RESULT, ON THE BASIS OF THE AFORESAID LE GAL POSITION AND THE MATERIAL AND EVIDENCE ON RECORD, ASSESSEE IS ELIGIB LE FOR DEDUCTION U/S 80IB(10) OF THE ACT IN RELATION TO IMPUGNED ADDITIO NAL INCOME OFFERED IN A STATEMENT U/S 132(4) OF THE ACT IN THE COURSE OF SE ARCH AND SUBSEQUENTLY DECLARED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A(1)(A) OF THE ACT. IN THE RESULT, APPEAL OF THE ASSESSEE FOR ASSESSMENT Y EAR 2008-09 IS ALLOWED. 9. THEREFORE, CONSIDERING THE AFORESAID PRECEDENT A S ALSO THE FACT SITUATION IN THE PRESENT CASE, THE CLAIM OF THE ASSESSEE IS J USTIFIED, ESPECIALLY ONCE IT IS FACTUALLY EXPLICIT THAT THE ADDITIONAL INCOME IN QU ESTION IS DERIVED FROM THE EXECUTION OF A HOUSING PROJECT, WHICH IS ELIGIBLE F OR 80IB(10) BENEFITS. THE ITA NO.2413/PN/2012 A.Y. 2009-10 IMPUGNED ADDITIONAL INCOME MERELY GOES TO ENHANCE T HE INCOME DERIVED FROM THE ELIGIBLE HOUSING PROJECT AND, IN OUR VIEW, THE SAME IS ELIGIBLE FOR THE BENEFITS OF SECTION 80IB(10) OF THE ACT. 10. IN THE FINAL ANALYSIS, WE HOLD THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT EVEN IN RELATION TO THE SUM OF RS.40,71,000/-. THUS, WE SET-ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AS SESSING OFFICER TO ALLOW ASSESSEES CLAIM FOR DEDUCTION U/S 80IB(10) OF THE ACT IN RELATION TO THE INCOME OF RS.40,71,000/-. 11. RESULTANTLY, THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH MAY, 2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G . S. PANNU) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE, DATED : 26 TH MAY, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, PUNE; 4) THE CIT-I, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE