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2022 (10) TMI 72 - ITAT NAGPURRevision u/s 263 by CIT - entitlement for indexation of the ‘cost of acquisition’ qua the property in question, for the reason that the property transferred was a building, i.e a depreciable asset, on which depreciation @5% of WDV had been claimed by the assessee - HELD THAT:- On a perusal of the assessment order, we find that there is nothing discernible therefrom which would reveal that the cost of acquisition of land as on 01.04.1981 that was adopted by the assessee as per “Explanation (b)(i)” to Sec. 55(2) pf the Act was verified by the AO before summarily accepting the same as such. As per “Explanation 2(a)” of Sec. 263(1), if the order is passed by the AO without making inquiries or verification which should have been made by him, then, the same is to be deemed to be erroneous in so far it is prejudicial to the interests of the revenue. As the AO while passing the order under Sec. 143(3), dated 24.12.2018 had failed to make any inquiries or verification as regards the F.M.V of land in question on 01.04.1981 that was taken by the assessee therefore, the order so passed by him as per “Explanation 2(a)” of Sec. 263(1) of the Act is to be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue. We, thus, in terms of our aforesaid observations uphold the order passed by the Pr. CIT u/s.263 of the Act qua the aforesaid issue. Whether Pr. CIT had erred in setting aside the order passed by the AO u/s. 143(3), dated 24.12.2018, for the reason that he had wrongly allowed the assessees’s claim of deduction u/s.54G? - As the assessee had failed to place on record any material which would irrefutably substantiate its claim that the capital gain on the transfer of land in question, i.e, land at Wani had arisen on transfer of land (that was used for the purposes of its business of an industrial undertaking situate in an urban area) in the course of, or in consequence of, the shifting of the said industrial undertaking to a non-urban area, therefore, the Pr. CIT had rightly observed that the summarily allowing of the assessee’s claim for deduction under Sec. 54G by the AO had rendered the order passed by him under Sec. 143(3), dated 24.12.2018 as erroneous in so far it is prejudicial to the interest of the revenue under Sec. 263 of the Act. Although we principally concur with the aforesaid observation of the Pr. CIT, but are of the considered view that the issue in hand, i.e, entitlement of the assessee towards claim of deduction u/s 54G in the absence of the requisite details requires to be revisited by the AO for de novo examination. We, thus, in terms of our aforesaid observations modify the order passed by the Pr. CIT on the aforesaid issue under consideration and, direct the AO to re-examine the assessee’s claim for deduction u/s 54G after calling for the necessary details and affording a reasonable opportunity of being heard to him. Accordingly, the order passed by the Pr. CIT as regards the aforesaid issue is modified in terms of our aforesaid observations. We are of the considered view, that the summarily acceptance of the sale consideration as was shown by the assessee in its return of income, and not taking cognizance on the aforesaid impounded document which referred to a receipt of an amount from the aforesaid purchaser, viz. Shri. Srikant Swaikar had rendered the order passed by the AO u/s. 143(3), dated 24.12.2018 as erroneous in so far as it is prejudicial to the interest of the revenue u/s.263 - We, thus, in terms of our aforesaid observations, finding no infirmity in the view taken by the CIT who had rightly observed that the failure on the part of the Assessing Officer to consider the aforesaid amount as was discernible from the impugned document impounded notepad had rendered his order as erroneous in so far as it is prejudicial to the interests of the revenue u/s. 263 uphold the same. ORDER:- We herein, viz. (i). set-aside the order of the Pr. CIT u/s. 263, to the extent he had concluded that the assessee had wrongly sought indexation of cost of acquisition; (ii). uphold the order of the Pr. CIT, on the ground, that the summarily acceptance by the AO of the F.M.V of land as on 01.04.1981 at Rs. 36,65,327/-, i.e, as adopted by the assessee for computing the LTCG on transfer of the same had rendered the order passed by him u/s 143(3), dated 24.12.2018 as erroneous in so far as it was prejudicial to the interests of the revenue u/s 263; (iii). though principally concur with the Pr. CIT that as the assessee had failed to establish its entitlement for claim of deduction u/s 54G of the Act, therefore, the summarily allowing of its claim of deduction by the AO had rendered the order passed by him u/s 143(3), dated 24.12.2018 as erroneous in so far as it is prejudicial to the interests of the revenue u/s 263 of the Act, but at the same time have modified the order of the Pr. CIT by directing the AO to re-examine the assessee’s claim for deduction u/s 54G, i.e, after calling for the requisite details and affording a reasonable opportunity of being heard to the assessee; and (iv). uphold the order of the Pr. CIT, on the ground, that the failure on the part of the AO in not considering the contents of an impounded document, i.e, a notepad which referred to receipt of ‘on money’ of Rs.11 lacs by the assessee on sale of flat from the purchaser, viz. Shri Srikant Swaikar had rendered the order passed by the AO u/s 143(3), dated 24.12.2018 as erroneous in so far as it is prejudicial to the interests of the revenue u/s 263 of the Act.
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