Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (8) TMI 862 - AT - Income TaxJurisdiction of CIT u/s 263 - revision - erroneous order - nature of receipt of compensation - revenue or capital receipt – Held that:- The scheme of the IT Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue - If due to erroneous order of the assessing officer, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the revenue – relying upon Malabar Industries Co. Ltd., Vs. CIT [2000 (2) TMI 10 - SUPREME Court] – while making assessment on assessee, the ITO acts in a quasi-judicial capacity - An assessment order is amenable to appeal by the assessee and to revision by the Commissioner under Sections 263 and 264 - the AO carried on the enquiry and came to the conclusion that the addition is not warranted - even the Commissioner considered the position that the AO made enquiries, elicited replies and thereafter passed the assessment order. The grievance of the CIT was that the AO should have made further enquiries rather than accepting the explanation of the assessee - it cannot be said that it is a case of "lack of enquiry" - the CIT is not clear as to what treatment is to be given with reference to the issue - He wanted the AO to cause further enquiry and he had not stated what enquiry the AO has to do - It is not clear from the order of the CIT whether the receipt of ₹ 20 crores is to be treated as revenue receipt or as capital receipt - No doubt, in certain cases it may not be possible to come to a definite finding and, therefore, it is not necessary that in all cases, the CIT is bound to express a final view. But the least that was expected is to record the finding that the order sought to be revised is erroneous and prejudicial to the interests of the revenue - When the AO held that the amount paid to M/s. LECC vide agreement dated 5.5.2006 for purchase of land is a capital expenditure and consequent to non-acting on the MOU the assessee got refunded the ₹ 20 crores from M/s. Walden Properties Pvt. Ltd. which cannot be said to be a revenue receipt - assumption of jurisdiction u/s. 263 of the Act by the CIT itself is not proper and the view taken by the AO is one of the possible views and there is no material before the CIT to vary with the opinion of the AO and ask for fresh inquiry - assumption of jurisdiction by the CIT is bad in law – Decided in favour of Assessee.
|