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2022 (3) TMI 1158 - AT - Income TaxRevision u/s 263 by CIT - According to Ld. PCIT A.O. accepted the claim of the agricultural income without examining the expenses incurred to earn the said agricultural income and the estimated gross receipt from agricultural holding @ 52,000/- per acre was accepted as net income without considering the expenditure - HELD THAT:- Case of the assessee was selected for limited scrutiny under CASS for the issue relating to the agricultural income. The A.O. issued the Questionnaire to the assessee, in response to which, the assessee furnished the replies to the A.O. In the said replies it has been stated that the assessee was holding 41 Acres of agricultural land in the name of his family member and was used to take approximately 60 acres of agricultural land on lease (Theka) on the said land, cash crop like potato, vegetable, fodder etc. were grown. The assessee was also cultivating crop of wheat, paddy which were sold through Kaccha arathia in Raikot namely M/s Gupta Trader Raikot. The assessee furnished the copies of J Form in support of the claim for sale of wheat & paddy - The assessee also furnished an affidavit from the Sarpanch of the village, before the A.O. in support of the above contention, the contents of the said affidavit were duly verified by Sarpanch of the Village Tajpur, District Ludhiana Therefore it cannot be said that the A.O. had not applied his mind or had not asked the assessee about the agricultural income declared. A.O. framed the assessment after making the proper enquiry and applying his mind. In our opinion, when the assessment is framed after making the inquiries and by considering the relevant details relating to the issue on which the case was selected for scrutiny then it cannot be said that the assessment so framed was erroneous or prejudicial to the interest of the Revenue. CIT(A) exercised his jurisdiction under section 263 of the Act on the issue which was considered in depth by the A.O. while framing the assessment order, therefore the impugned order passed by the Ld. CIT(A) has no legs to stand, as the assessment order was passed by the A.O. under section 143(3) of the Act after due verification and application of mind on the issue relating to the agricultural income shown by the assessee. On the basis of the same agricultural income the Ld. Pr. CIT considered the assessment order as erroneous and prejudicial to the interest Revenue. Show cause notice was issued by the Ld. PCIT on the basis of the audit objection copy - As relying on SOHANA WOOLLEN MILLS. [2006 (9) TMI 157 - PUNJAB AND HARYANA HIGH COURT] PCIT was not justified in exercising his power to invoke the provision of Section 263 of the Act on the basis of audit objection by the Audit Wing of the Department. Appeal of assessee allowed.
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