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02-01-2019, Nahar Enterprises, Section 153A, 80IB(14)(a), Tribunal Mumbai

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1 week 1 day ago #8277 by amit
Section - 153A, 80IB(14)(a), 2(31), 283(2), 132, 292(B)
Order Date - 02-01-2019
Favouring - Assessee Partly
Court - Tribunal Mumbai
Appellant - Nahar Enterprises
Respondent - DCIT
Justice - MAHAVIR SINGH, JM & MANOJ KUMAR AGGARWAL, AM
Citation - 119Taxpundit74
Appeal No. - I .T.A. No.5851/Mum/2015
Asstt. Year - 2008-09

Order

PER : Manoj Kumar Aggarwal

1. These cross appeals for Assessment Years [AY] 2008-09 & 2009- 10 agitate separate orders of first appellate authority. Since identical issues are involved and similar grounds of appeal have been raised, we proceed to dispose-off the same by way of this common order for the sake of convenience & brevity. First, we take up cross-appeals for AY 2008-09 wherein the grounds urged by revenue reads as under: -

i. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing the AO to allow deduction u/s.80IB(10) of the IT Act."

ii. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in holding that the Scope of Section 153A is limited to assessing only search relating to incriminating documents found during search and not examining the issue following the decision of Hon'ble Bombay Court in the case of Continental Warehousing and also in the case of Al Cargo Logistics without appreciating that Department has not accepted the said decision and SLP has been filed in the Hon'ble Supreme Court,"

iii. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in holding that no evidence or incriminating material found during the search without appreciating that evidence for wrong claim of deduction u/s.80IB(10) was found in the form of statements taken, photograph takenwhich shows
that area claimed is not correct and evidence need not be onlywritten documents."

iv. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in excluding cupboard projection from built up area when amendment brought in by Finance Act (No.2), 2004 w.e.f. 01.04.2005 clearly defines built up area to mean and to include projections and balconies."

v. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in excluding service area from built up area when its exclusive ownership has not been disproved by the assessee."

vi. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in excluding window projections from built up area when amendment brought in by Finance Act (No.2), 2004 w.e.f. 01.04.2005 clearly defines built up area to mean and to include projections and balconies."

The effective grounds urged by the assessee reads as under: - The appellant firm prefers an appeal against an order dated 16/10/2015 passed by Ld. Commissioner of Income Tax Appeals-52, Mumbai on following amongst other grounds each of which are without prejudice to any other: -

1.0 The Ld. CIT (A) erred in confirming the assessment order passed u/s 143(3) r.w.s. 153A by the Ld. AO, which is bad-in-law without appreciating that: -

a) Assessment order u/s 143(3) r.w.s 153A can be passed only on issuance of valid Search Warrant;

b) Assessment cannot be framed in the name of a dissolved entity;

c) The PAN of the appellant firm is no more in existence and hence assessment framed and demand notice issued in the name of old PAN is invalid;

d) There is complete change in the constitution of the appellant from firm to company and not merely a change in the "name" of the appellant and hence merely mention of ("now known as "Nahar Builders Limited") in the search warrant is irrelevant;

1.1 On facts and circumstances of the case and in law, Ld. CIT (A) erred in not directing the assessing officer for proving the satisfaction note on initiation for search proceeding initiated on the appellant.

2.0 On facts and circumstances of the case and in law, Ld. CIT (A) erred in ignoring the fact that the appointment of the Departmental Valuation Officer (DVO) itself is bad in law on understated facts:

(a) The Ld. DVO was not a member of Search party nor his services were requisitioned by the Authorized officer in terms of provision u/s 132(2) of the Act. The same is supported by the fact that the Panchnama does not mention the name of the Ld. DVO;

(b) The measurement sheets do not contain the signatures of the Independent Panchas which proves that the Ld. DVO's report did not form a part of the Panchnama;

3.0 On facts and circumstances of the case and in law, Ld. A.O. erred in denying deduction u/s 80IB (10) of Rs. 21,23,67,5897- on the plea that Built up area of majority of the residential units exceed 1000 sq.ft. by solely relying on the measurements taken by the Search team i.e. Ld. DVO;

3.1 On facts and circumstances of the case and in law, Ld. CIT (A) erred in interpretation of the provisions of Section 80IB(14)(a) and thereby included the Flower bed (projection) at non-floor level of the residential unit as a part of Built up area;

3.2 The Ld. CIT(A) failed to appreciate that once factually it was proved that 'flower bed' area is below the floor level, it ought not to have treated the same as 'balcony’ which is contrary to fact as well as the DCR Regulations and permission / sanctions.

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