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2014 (10) TMI 656 - AT - Income TaxJurisdiction of the CIT to invoke section 263 - Erroneous and prejudicial to the interest of revenue or not - Failure of AO to examine taxability of sale proceeds of the land as business income as against capital gains as offered in Return of Income or not – Held that:- As decided in Malabar Industrial Co. Ltd. vs. CIT [2000 (2) TMI 10 - SUPREME Court] - no specific query was raised by the AO about the amounts received on sale of land as income from business - even after the receipt of reply about the details about the sale of various pieces of land, no further query was raised by the AO about the treatment of tax of the receipts on sale of land and the AO had accepted the submissions of the assessee - AO has not inquired about the details of the land development expenses, amount of advance received by the assessee, details of sales made to parties - CIT has rightly exercised the powers by invoking the provisions of Section 263 - It is true that the AO is not required to pass a very detailed order but his order must show that he has dealt with various aspects of the matter and should not be a general order - while setting aside the assessment, CIT has directed the A.O. to compute the assessee's income by treating the profit on sale of land as income from business instead of short term or long term gains - CIT cannot direct the AO to make the assessment in a particular way – thus, the order of the CIT is to be modified to the extent of deleting the direction of CIT to treat the profits as business income and thus modify the direction to AO to decide the matter of taxation on sale of land as per law – Decided against assessee.
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