IN INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, JUDICIAL MEMBER I.TA No. 2395/Mum/2013 ( Assessment Year: 2007-08 DCIT, M/s. Siddhi Twinkle Central Circle-14, Enterprises, Vs. R.No. 1007, 10 t h Floor, 1304, Allmanda Pride Park, Old CGO Annexe Bldg., Lauukaim Industries, Mumbai-400 020 Thane (W)-400 067 C.O. No. 115/Mum/2015 I.TA No. 2395/Mum/2013 ( Assessment Year: 2007-08 M/s. Siddhi Twinkle DCIT, Enterprises, Central Circle-14, Vs. 1304, Allmanda Pride R.No. 1007, 10 t h Floor, Park, Old CGO Annexe Bldg., Lauukaim Industries, Mumbai-400 020 Thane (W)-400 067 PAN/GIR No. ABAFS 6316G ( Appellant) .. ( Respondent) Assessee by: Shri Manjunatha Swamy Department by: Dr. Sunil Pathak Shri Subodh Ratnaparakhi Date of Hearing :19.07.2016 Date of Pronouncement :30.09.2016 O R D E R PER C.N. PRASAD, JM: 2 ITA No. 2395/M/2013 This appeal is filed by Revenue and cross objection filed by assessee against order of Ld. CIT(A)-37, Mumbai dated 01.01.2013 pertaining to assessment year 2007-08. 2. Revenue has raised following grounds in its appeal: (i) "On facts and in circumstances of case and in Law, Ld.C1T(A) erred in holding that A.O. could not make addition without incriminating material regarding claim of deduction u/s. 801B(10) of Act without considering fact that once assessment is initiated u/s. 153A or 153C of Act, it is open for AO to make addition on any issue whether any incriminating material related that is found in course of search or not". (ii)"On facts and in circumstances of case and in Law, Ld.C1T(A) erred in allowing deduction u/s. 801B(10) of Act relying on case of Vandana Properties, in respect of which SLP filed by Revenue is reported to be pending." (iii) "On facts and in circumstances of case and in Law, Ld.C1T(A) erred in deleting addition of Rs. 4,16,41,820/- representing deduction claimed u/s 801B(10) without considering fact and provisions of section 801B(10)(a) that entire project to K was approved on 20.03.2002 by local authority vide common plan considered as single project and accordingly, I & J was only extension of project to K requiring completion by 31.3.2008 which was not fulfilled in case of project I & J." 3. Briefly stated facts are that there was search u/s. 132 of of Act at premises of one of members of assessee (AOP) on 28.8.2008. Subsequently assessment was completed u/s. 143(3) r.w. Sec. 153A of Act on 30.10.2010 by Assessing Officer accepting total income declared at Nil by assessee after claiming deduction u/s. 80IB(10) of Act on housing project. It appears that Assessing Officer examined allowability of claim of assessee u/s. 80IB(10) and accepted claim of assessee while completing assessment. Subsequently search action u/s. 132 has taken place in case of 3 ITA No. 2395/M/2013 another member of assessee (AOP) alongwith other associated persons and group companies. Consequent to search notice u/s. 153C was issued requiring assessee to file return of income. assessee filed return of income declaring Nil income in response to notice issued u/s. 153C of Act. assessment was completed u/s. 143(3) r.w. Sec. 153C on 29.12.2011 determining total income at Rs. 4,16,41,820/- as against Nil income returned. While completing assessment, Assessing Officer rejected claim of assessee u/s. 80IB(10) of Act by observing that project does not fulfill two vital conditions prescribed u/s. 80IB(10)(a)(i) and 80IB(10)(b) of Act. 4. On appeal, Ld. CIT(A) deleted disallowance holding that no incriminating material was found in respect of claim made u/s. 80IB of Act during course of search and seizure proceedings and therefore he held that after initiating proceedings, Assessing Officer at best should have limited himself to making assessment same as that of original assessment framed u/s. 143(3) of Act. Further, he has held that even otherwise on merits it is admitted position that assessee s claim is directly covered by decision of Jurisdictional High Court in case of CIT Vs Vandana Properties. Against this order, Revenue is in appeal before us. 5. Ld. Departmental Representative vehemently supported orders of Assessing Officer in denying claim for deduction u/s. 80IB(10) of Act to assessee on housing project. 4 ITA No. 2395/M/2013 6. Ld. Counsel for assessee vehemently supports order of Ld. CIT(A). He further submits that there was no incriminating material found in course of search and therefore claim which was examined and allowed while completing assessment u/s. 143(3) and also u/s. 143(3) r.w. Section 153A cannot be disallowed while completing assessments u/s. 153C of Act in absence of any incriminating material. He submits that there is no pending proceedings for Assessment Year 2007-08 as on date of search and therefore assessment for Assessment Year 2007-08 has not abated. He further submits that disallowance u/s. 80IB(10) is not justified in non abated assessment where search u/s. 132 did not reveal any incriminating evidences to suggest that there is undisclosed income by assessee. For this proposition, he places reliance on decision of Bombay High Court in case of CIT Vs Continental Warehousing Corpn. (373 ITR 0645)(Bom), All Cargo Global Logistics Ltd Vs DCIT (137 ITD 0287)(SB). He further submits that even on merits, issue is covered by decision of Hon ble Jurisdictional High Court in case of CIT Vs Vandana Properties (supra) wherein Hon ble High Court held that cluster of buildings from out of large lay out would be eligible for deduction u/s. 80IB(10) of Act. 7. Heard rival submissions and perused orders of lower authorities and decisions relied on. There was search u/s. 132 of of Act at premises of one of members of assessee (AOP) on 28.8.2008. Subsequently assessment was completed u/s. 143(3) r.w. Sec. 153A of Act on 30.10.2010 by Assessing Officer accepting total income declared at Nil by 5 ITA No. 2395/M/2013 assessee after claiming deduction u/s. 80IB(10) of Act. It appears that Assessing Officer examined allowability of claim of assessee u/s. 80IB(10) and accepted claim of assessee while completing assessment. Subsequently search action u/s. 132 has taken place in case of another member of assessee (AOP) alongwith other associated persons and group companies. assessee filed return of income declaring Nil income in response to notice issued u/s. 153C of Act. assessment was completed u/s. 143(3) r.w. Sec. 153C on 29.12.2011 determining total income at Rs. 4,16,41,820/- as against Nil income. While completing assessment, Assessing Officer rejected claim of assessee made u/s. 80IB(10) of Act. Assessing Officer rejected claim of assessee u/s. 80IB(10) by observing that project does not fulfill two vital conditions prescribed u/s. 80IB(10)(a)(i) and 80IB(10)(b). 7.1. We have gone through assessment order and find that there is no whisper about incriminating material found by Assessing Officer regarding claim made by assessee u/s. 80IB(10) of Act. It appears that deduction u/s. 80IB(10) has not been denied based on any seized materials. But it was done only on basis of assessee not explaining why deduction u/s. 80IB(10) should be allowed. Ld. CIT(A) has given categorical finding that no incriminating material was found and no disallowance can be made u/s. 80IB (10) stating as under: In view of above, it cannot be said that action initiated by Ld. CIT(A). A.O u/s. 153A was bad in law. Having said that, it is also important to note that in very said decision in Anil Bhatia (supra) Hon ble Delhi High Court took 6 ITA No. 2395/M/2013 pains to suggest that if there was no incriminating material found, Assessing Officer has to stop short in 153A proceedings and restrict himself to income already determined/assessed in concluded proceedings u/s. 143(3). It is admitted fact that no incriminating material was found in respect of 80IB claim of appellant during course of search and seizure proceedings and therefore after initiating proceedings, Assessing Officer at best should have limited himself to making same assessment as in original assessment framed u/s. 143(3). 7.2. In case of CIT Vs Continental Warehousing (supra), Jurisdictional High Court held that in absence of any materials unearthed during search u/s. 153A/C proceedings to show that relief allowed to assessee was erroneous, Assessing Officer while passing order u/s. 153A r.w. section 143(3) could not have disturbed assessment order finalized relating to relief/deduction already allowed by Assessing Officer. Similar is view of Special Bench, Rajkot decision in case of All Cargo Global Logistics (supra). 8. In this case, admittedly, there is no incriminating material found in course of search suggesting that claim of assessee u/s. 80IB(10) is false or wrong. assessment for Assessment Year 2007-08 was completed u/s. 143(3) and also u/s. 143(3) r.w. Section 153A and there is no pending proceeding to show that assessment is abated hence in absence of any incriminating material, question of denying deduction u/s. 80IB(10) of Act to assessee for Assessment Year 2007-08 does not arise. Hence, we hold that Ld. CIT(A) has rightly allowed claim of assessee and accordingly his order is sustained. 7 ITA No. 2395/M/2013 9. Since we are affirming order of Ld. CIT(A) deleting disallowance u/s. 80IB (10) of Act, C.O. filed by assessee is dismissed as infructuouse. 10. In result, appeal filed by Revenue and cross objection filed by assessee are dismissed. Order pronounced in open court on 30th September, 2016. Sd/- Sd/- (RAJENDRA) (C.N. PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 30th September, 2016 Rj , Sr. PS Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai DCIT, Central Circle-14, Mumbai v. M/s. Siddhi Twinkle Enterprise