2014 (8) TMI 1087 - ITAT PANAJI - Income Tax

Head Note / Extract:
Validity of the order passed u/s 263 - capital gain computation - income was divided between both the assessees as per the provisions of Sec. 5A of the Income Tax Act - Held that:- We have gone through the provisions of section 2(47). This section defines the term transfer for the purpose of charging the capital gain. Section 45 mandates that the capital gain is chargeable to tax in the year in which the capital asset is transferred. The assessing officer in our opinion was bound to inquire into the transaction which the assessee has entered into with M/s Emgee Housing Pvt Ltd on the basis of the seized material A/EB/21 dated 25.2.10.The AO, in this case, we noted, except asking for the note on the transaction with details, assessee entered into with M/s Emgee Housing P Ltd did not examine whether the provision of section 2(47) are applicable on these transaction or not during the year. Not only this, this an disputed fact that the assessee did not file any note or details on the transactions entered into by the assessee with M/s Emgee Housing P Ltd, even though the said information was duly asked for by the assessing officer, yet the assessing officer passed the assessment ignoring whether any income arises during the year. It is not a case where the AO has allowed the deduction by taking one of the possible views. It is also not a case of inadequate inquiry but a case where no inquiry has been conducted by the AO on the applicability of section 2(47) of the Income Tax Act for the gain arising on the transaction which the assessee had with M/s Emgee Housing P Ltd. Lack of enquiry will tantamount to be that the order is erroneous and prejudicial to the interest of Revenue. Our aforesaid view is duly supported by the decision of Full Bench of Guwahati High Court in the case of CIT vs Jawahar Bhattacharjee, (2012 (4) TMI 222 - GAUHATI HIGH COURT ) in which Hon‟ble High Court took the view “ Not holding such inquiry as a normal and not applying the mind to the relevant material in making an assessment would be an erroneous assessment warranting exercise of revisional jurisdiction.” The CIT has already restored this issue to the file of the Assessing Officer and the Assessing Officer, after giving proper opportunity to the assessee has to re-decide the issue whether any capital gain arise during the year. We therefore, cannot entertain the ground relating to the merit of the issue as CIT(A) has not decided the issue on merit. We, therefore, do not find any illegality or infirmity in the order of CIT invoking the jurisdiction u/s 263 of the Income Tax Act in all the cases. - Decided against assessee