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2019 (8) TMI 1418 - HC - Income TaxRevision u/s 263 - non consideration of the provisions of Section 40(a)(i-a) in respect of land development expenses - non compliance ofT.D.S. provisions - HELD THAT:- The Tribunal rightly arrived at the finding that all the material in regard to land development expenses was before the AO who had required the assessee to produce all the documents in relation to the same and after inquiring about the details of contract and the contract executed by assessee, the bill submitted and payment schedule made, the AO accepted the books of account and only disallowed ₹ 1,20,000/- and added to the income of the assessee, which was also set aside by order of the CIT(A), while exercising the power u/s 263 CIT did not have any material for invoking the said provision and it merely did the same on suspicion and presumption. As, Clause (c) of Explanation 1 to Section 263 provides that when an appeal is pending before the CIT(A), the exercise of jurisdiction u/s 263 CIT is barred. Thus, in the present case, the CIT wrongly exercised jurisdiction u/s 263 by remanding back the matter to assessing authority on 25.3.2013, while the appeal was decided by CIT (A) on 5.6.2013. Thus, the order passed by the ITAT does not suffer from any irregularity and needs no interference. As far as the word “record” appearing in Clause (b) of Explanation-1 to Section 263 is concerned, it means the record available at the time of examination by the CIT and not any material or record available subsequent to his examination or exercise of power u/s 263. Thus, any order passed by the AO in the assessment proceedings after the remand by the CIT cannot be looked upon and the argument made by the counsel for the revenue for relying upon the fresh assessment order made on 7.3.2004 u/s 263/143(3) cannot be accepted in view of the above provision of law. In the present case, the Tribunal had recorded specific finding of fact that the assessing authority had examined each and every aspect of the case on which the remand order hinges, as such the remand order was not sustainable in the eyes of law. The revenue has failed to make any case for interference in the order of the ITAT, as the CIT had proceeded to remand the matter back to the assessing authority while the appeal of the assessee was pending u/s 250 and the power of exercise u/s 263 was barred by Clause (c) to Explanation 1 of Section 263. Further, the remand order by the CIT was based merely on suspicion and presumption - Decided in favour of assessee.
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