PADMAKAR HARIBHAU MULAY,AURANGABAD vs. DCIT, CENTRAL CIRCLE,, AURANGABAD

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ITSSA 79/PUN/2022Status: DisposedITAT Pune26 September 2023AY 2013-146 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that in the case of an unabated assessment, without any incriminating material unearthed during search and seizure, no addition can be made. By converse analogy, a fresh claim unrelated to undisclosed income found during search and seizure proceedings cannot be allowed in proceedings under Section 153A. The Tribunal relied on the Supreme Court decision in PCIT vs. Abhisar Buildwell (P.) Ltd. and the jurisdictional High Court's decision in CIT vs. Gurinder Singh Bawa, which held that Section 153A cannot be used for a second inning of assessment by either the revenue or the assessee. The Rajasthan High Court in Jai Steel (India) vs. ACIT also held similarly. Since the claim for exemption under Section 10(37) did not form part of the material unearthed during the search, it could not be allowed in the Section 153A proceedings. The Tribunal clarified that this decision would not prevent the assessee from pursuing other remedies available under the Act. The appeals were dismissed.

What were the facts?

These appeals by two different assessees, Padmakar Haribhau Mulay and Snehal Sameer Mulay, are against the orders of the CIT(A)-12, Pune, for Assessment Year 2013-14. For Padmakar Haribhau Mulay, the return of income was filed declaring Rs.1,49,04,104/-. A search under Section 132 was conducted on August 21, 2018, followed by a notice under Section 153A on October 15, 2019. A revised return under Section 153A declared Rs.1,41,18,270/-. The Assessing Officer completed the assessment at Rs.1,49,04,104/-, adding Rs.7,85,834/- on account of long-term capital gains. The AO rejected the assessee's claim for exemption under Section 10(37) on land acquired by CIDCO, holding that such a claim cannot be made in a return filed under Section 153A. The CIT(A) upheld this view, relying on a coordinate bench decision.

What were the issues?

1. Whether a fresh claim for exemption under Section 10(37) of the Income Tax Act, 1961, can be made in a return of income filed in response to a notice under Section 153A of the Act, in a case where assessment proceedings have not abated. Assessee's contention: The assessee argued that gains arising from the compulsory acquisition of land by CIDCO are exempt under Section 10(37) and that a fresh claim can always be made in a return filed in response to a notice under Section 153A. Revenue's contention: The revenue contended that no fresh claim can be made in a return filed under Section 153A in the case of an unabated assessment.

Which sections of the Income-tax Act were involved?

Section 10(37),Section 132,Section 153A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE

Before: SHRI INTURI RAMA RAO & SHRI PARTHA SARATHI CHAUDHURY

For Appellant: Shri Kishor B. Phadke
For Respondent: Shri M. G. Jasnani
Hearing: 13.09.2023Pronounced: 26.09.2023

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं. / IT(SS)A No.79/PUN/2022 िनधा�रण वष� / Assessment Year: 2013-14 Padmakar Haribhau Mulay, Vs. DCIT, Central Circle-1, Sahyadri Rachnakar Colony, Aurangabad. Railway Station Road, Aurangabad- 431001. PAN : AEIPM3632E Appellant Respondent आयकर अपील सं. / IT(SS)A No.80/PUN/2022 िनधा�रण वष� / Assessment Year: 2013-14 Snehal Sameer Mulay, Vs. DCIT, Central Circle-1, Sahyadri Rachnakar Colony, Aurangabad. Railway Station Road, Aurangabad- 431001. PAN : AJZPM4516F Appellant Respondent Assessee by : Shri Kishor B. Phadke Revenue by Shri M. G. Jasnani : Date of hearing : 13.09.2023 Date of pronouncement : 26.09.2023 आदेश / ORDER PER BENCH : These are the appeals filed by the two different assessees directed against the separate orders of ld. Commissioner of Income Tax (Appeals)-12, Pune [‘the CIT(A)’] dated 29.07.2022 for the assessment year 2013-14.

2 IT(SS)A No.79/PUN/2022 IT(SS)A No.80/PUN/2022 2. Since the identical facts and common issues are involved in both the above captioned appeals of two different assessees, we proceed to dispose of the same by this common order. 3. For the sake of convenience and clarity, the facts relevant to the appeal in IT(SS)A No.79/PUN/2022 for the assessment year 2013-14 are stated herein. IT(SS)A No.79/PUN/20122, A.Y. 2013-14 : 4. Briefly, the facts of the case are that the appellant is an individual deriving income under the head “business”. The Return of Income for the assessment year 2013-14 was filed on 11.11.2013 declaring total income of Rs.1,49,04,104/-. Subsequently, the search and seizure operations u/s 132 of the Income Tax Act, 1961 (‘the Act’) were conducted in the case of the assessee on 21.08.2018 and a notice u/s 153A of the Act was issued on 15.10.2019. The appellant had filed the return of income in response to notice u/s 153A declaring income of Rs.1,41,18,270/-. Against the said return of income, the assessment was completed by the Dy. Commissioner of Income Tax, Central Circle-1, Aurangabad (‘the Assessing Officer’) vide order dated 21.04.2021 at a total income of

3 IT(SS)A No.79/PUN/2022 IT(SS)A No.80/PUN/2022 Rs.1,49,04,104/-. While doing so, the Assessing Officer made addition on account of long term capital gains of Rs.7,85,834/- rejecting the claim of the appellant that the gains arising on acquisition of land by CIDCO Mahanagar Aurangabad of Gut No.44 Waladgaon Tal. Dist. Aurangabad for exemption u/s 10(37) cannot be allowed by holding that the said claim of exemption cannot be allowed in the return of income in response to notice u/s 153A of the Act. 5. Being aggrieved, an appeal was filed before the ld. CIT(A), who vide impugned order placing reliance on the decision of the Co-ordinate Bench of this Tribunal in the case of Siddheshwar Industries Pvt. Ltd. vs. DCIT in ITA No.760/PUN/2016 dated 20.04.2022 held that no new claim can be made in the return filed in response to notice u/s 153A of the Act. 6. Being aggrieved, the appellant is in appeal before us in the present appeal. 7. The ld. AR submits that the gains arising on acquisition of land which was compulsory acquired by the CIDCO is exempt from the tax under the provisions of section 10(37) of the Act. He

4 IT(SS)A No.79/PUN/2022 IT(SS)A No.80/PUN/2022 submits that in the return filed in response to notice u/s 153A, a fresh claim can always be made. 8. On the other hand, ld. Sr. DR submits that no fresh claim can be made in the return filed u/s 153A in the case of unabated assessment. 9. We heard the rival submissions and perused the material on record. The issue in the present appeal relates to whether or not a fresh claim can be made in the return filed in response to notice u/s 153A in the case of unabated assessment. It is undisputed position that there is no abatement of assessment proceedings for the year under consideration. It is settled position of law that in the case of unabated assessment in the absence of any incriminating material, no addition can be made. Reference in this regard can be made on the decision of the Hon’ble Supreme Court in the case of PCIT vs. Abhisar Buildwell (P.) Ltd., 149 taxmann.com 399 (SC). On the same analogy converse position i.e. allowing the fresh claim unrelated to the undisclosed income found as a result of search and seizure proceedings, cannot be allowed in the proceedings u/s 153A of the Act. Even the Hon’ble Jurisdictional High Court in the case of CIT vs. Gurinder Singh Bawa, 386 ITR 483 (Bombay) has laid

5 IT(SS)A No.79/PUN/2022 IT(SS)A No.80/PUN/2022 down that the provisions of section 153A cannot be used as a tool to have a second inning of the assessment either to the Revenue or the assessee. Even the Hon’ble Rajasthan High Court in the case of Jai Steel (India) vs. ACIT, 259 CTR 281 (Rajasthan) held to the same effect. It is undisputed position that the claim for exemption of gains arising on the compulsory acquisition of agricultural land u/s 10(37) of the Act does not form part of the material unearthed as result of search and seizure actions. Therefore, in the light of the above settled position of law, the claim made by the assessee cannot be allowed in the proceedings u/s 153A of the Act. However, we make it very clear that the outcome of the present proceedings should not come in the way of assessee pursuing other remedy available under the provisions of the Act. 10. In the result, the appeal filed by the assessee in IT(SS)A No.79/PUN/2022 for A.Y. 2013-14 stands dismissed. IT(SS)A No.80/PUN/2022, A.Y. 2013-14 : 11. Since the facts and issues involved in both the above captioned appeals of two different assessees are identical, therefore, our decision in IT(SS)A No.79/PUN/2022 for A.Y. 2013-14 shall apply mutatis mutandis to the appeal of the assessee in IT(SS)A

6 IT(SS)A No.79/PUN/2022 IT(SS)A No.80/PUN/2022 No.80/PUN/2022 for A.Y. 2013-14 respectively. Accordingly, the appeal of the assessee in IT(SS)A No.80/PUN/2022 for A.Y. 2013-14 stands dismissed. 12. To sum up, both the above captioned appeals of two different assessees stands dismissed. Order pronounced on this 26th day of September, 2023. Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 26th September, 2023. Sujeet आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(A)-12, Pune 4. The Pr. CIT, Central, Nagpur. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “B” ब�च, 5. पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.

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