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2015 (7) TMI 558 - AT - Income TaxRevision u/s 263 by CIT(A) - CIT while setting aside the assessment order held that the sale consideration at ₹ 35,00,000/- for shop was less than the circle rate at ₹ 69,72,402/- paid and that the stamp duty was paid on the said circle rate, therefore, the said circle rate was the most reasonable rate while accepting the sale rate - CIT invoked the provisions of section 50C - whether the provisions of section 50C of the Act are applicable to the assets held as stock-in-trade? - Held that:- The provisions of Section 50C of the Act are not applicable when the shops are treated as stock-in-trade and income from such transaction was held as a business income. Therefore, the ld. CIT was not justified in setting aside the assessment order only on this basis that the AO has not taken the sale value as per section 50C of the Act i.e. the circle rate. We, therefore, are of the view that the ld. CIT was not justified in setting aside the assessment order by invoking the provisions of section 263 of the Act. In the instant case, the assessee furnished all the details relating to the business profit earned and the sale of shops. The AO specifically asked the assessee to show cause as to why the interest should not be allowed proportionately with reference to actual sale of shops as reduced by the gross profit. Accordingly, interest on loans and income from business was worked out. The ld. CIT had not doubted allowable interest worked out by the AO, therefore, he was not justified in observing that the AO accepted the business income without making proper inquiry. Moreover, the ld. CIT had not pointed out how and in what manner the assessment order was erroneous and prejudicial to the interest of the Revenue. He simply stated that the AO had not made the proper inquiry but did not point out which inquiries were to be made but had not been made by the AO. Therefore, by considering the totality of the fact we are of the view that the ld. CIT was not justified in setting aside the assessment order dated 22.12.2010 and directing the AO to frame fresh order. He was also not right in holding that the sale price of the shop should have been taken at circle rate in accordance with the provision of Section 50C of the Act instead of actual sale price disclosed by the assessee and accepted by the AO. Accordingly the impugned order passed by the ld. CIT is set aside and the assessment order framed by the AO is restored. - Decided in favour of assessee.
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