Case Laws
Acts
Notifications
Circulars
Classification
Forms
Manuals
Articles
News
D. Forum
Highlights
Notes
🚨 Important Update for Our Users
We are transitioning to our new and improved portal - www.taxtmi.com - for a better experience.
⚠️ This portal will be discontinued on 31-July-2025 at 23:59:59
⏳ Remaining Time: 4d 19h 9m 13s
If you encounter any issues or problems while using the new portal,
please let us know
via our feedback form
, with specific details, so we can address them promptly.
Home
2022 (11) TMI 973 - AT - Income TaxRevision u/s 263 - as per CIT assessee has not disclosed the sale transactions of two properties - HELD THAT - It is also settled proposition of law that both the conditions should be satisfied in order to initiate revision proceedings i.e. the order is not only erroneous but it should also be prejudicial to the interests of revenue. Merely because the Ld. PCIT has initiated revision proceedings he cannot set aside the assessment order for doing assessment de-nova on the issues on which the revision proceeding was initiated. As relying on NAGESH KNITWEARS P. LTD. AND ORIENT CRAFTS LTD. AND VOGUE SETTERS 2012 (6) TMI 65 - DELHI HIGH COURT it clear that the Ld. PCIT before holding an order to be erroneous should have conducted necessary enquiries or verification in order to show that the finding given by the assessing officer is erroneous and further the Ld. PCIT should have shown that the view taken by the AO is unsustainable in law. In the instant case as shown by the assessee that the properties belonged to a partnership firm in which he is a partner. It was also shown that relevant sale transactions have been duly disclosed in the returns of income filed by the partnership firm which has also been accepted by the assessing officer of the partnership firm. It is well settled proposition of law that the tax can be levied in right hands only as held by Hon ble Supreme Court in the case of ITO vs. Ch Atchiah 1995 (12) TMI 1 - SUPREME COURT as held tax the right person and the right person alone. Here right person means the person who is liable to be taxed according to law which respect to a particular income. Since the two properties referred by Ld. PCIT belonged to the partnership firm the profit on sale of those properties cannot be assessed in the hands of the assessee. When there is no revenue leakage in the hands of the assessee the impugned assessment order cannot be termed as erroneous and prejudicial to the interests of revenue in respect of this issue. Unsecured loan - We notice that the impugned assessment order has been passed u/s. 143(3) r.w.s 153A of the Act and the instant assessment year falls under the category of unabated assessment. It has been held in the case of Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT that the addition in case of unabated assessment years could be made only on the basis of incriminating material if any found during the course of search. When the AO is disabled to make any addition in our view the Ld. PCIT also cannot probe on that issue. On merits the assessee has submitted that it has taken fresh loan from five parties only during the year under consideration. Other loans are brought forward from earlier year. It is submitted that the assessee has furnished the details of five parties along with their confirmation letters which also contained PAN number. Leaving aside the question as to whether the enquiry so made by the AO on merits in respect of sundry creditors is adequate or not we are of the view that the revision order passed by Ld. PCIT on this issue is liable to be quashed on the basis of legal proposition discussed above. Accordingly we hold that the impugned revision order is not sustainable on this issue also. Deduction of cost of improvement made in the land sold by the assessee by way of construction of compound wall - assessee had sold a land and while computing capital gain he claimed cost of improvement of land which consisted of construction cost of compound wall - As per PCIT that the AO has not examined this claim - HELD THAT - We notice that the Ld. PCIT could not state how the assessment order is erroneous and prejudicial to the interests of revenue with regard to the claim of compound wall expenses. In the absence of such a finding the assessment order cannot be held to be erroneous and hence there is no scope for proceeding further with the proceeding initiated by Ld. PCIT u/s. 263 of the Act. However we notice that the Ld. PCIT has proceeded further and directed the AO to verify the claim which is not warranted at all. Accordingly we are of the view that the impugned revision order passed by Ld. PCIT could not be sustained. Accordingly we quash the impugned revision order passed by Ld. PCIT. Appeals filed by the assessee are allowed.
|