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2019 (1) TMI 274 - AT - Income TaxRevision u/s 263 - cash deposit found deposited in the bank account of the assessee - denial of natural justice - Held that:- There is no dispute that such show-cause notice dated 6.10.2017 has been duly served on the assessee and the assessee has been duly represented through its AR before the Pr.CIT in the revisionary proceedings and the principle of natural justice have thus been duly adhered to - merely because the show cause notice dated 06.10.2017 is signed by the ITO (Technical), the same will not affect the assumption of jurisdiction by the Pr CIT u/s 263 of the Act and we are unable to accede to contentions so raised by the ld AR in this regard. Coming to another contention of the AR that the proceedings U/s 263 of the Act were initiated after receiving the proposal from the ITO, Ward-1(1), Alwar and where such proceedings have been initiated after receiving the proposal from the ITO, the said proceedings again deserved to be quashed. Pr CIT has examined the assessment records and on being satisfied that the order passed by the Assessing officer is erroneous and prejudicial to the interest of the Revenue, he has directed to issue the show-cause notice. There is no dispute that a proposal has been sent by the ITO Ward 1(1), Alwar, however, the same has been duly examined along with the assessment records by the Pr. CIT and after duly application of mind and on being satisfied that the matter calls for his intervention, the ld Pr CIT has exercised his jurisdiction under section 263 of the Act. For cash deposit found deposited in the bank account of the assessee Pr CIT has given a specific finding that the AO has not ascertained whether the assessee was having in his possession and ownership as many number of plots of land in respect of which the assessee has received the advance from 76 persons. Pr CIT has held that the affidavits from these buyers and the statement of 5 of these buyers recorded by the AO nowhere narrate the plot serial number, area of plot, site plan, locality etc. And thereafter, he has held that by merely receiving the affidavits and taking the statements of 5 persons on face value without any further examination, the genuineness of the transaction and creditworthiness of these 76 buyers were not substantially proved. Thereafter, he has finally held that the order passed by AO based on incorrect and mistaken assumption of facts by way of accepting the statement of the assessee on face value and without due verification is erroneous as well as prejudicial to the interest of the Revenue and he has set-aside the assessment order with a direction to the Assessing officer to pass assessment order afresh. We therefore find that there is a clear finding recorded by the ld Pr CIT on examination of facts and material on record as to how the order passed by the Assessing officer is erroneous and prejudicial to the interest of the Revenue. Regarding the second issue of cost of acquisition in respect of plots of land sold during the year AO has considered cost of whole of the ancestral land valued at ₹ 1,25,000 as on 1.4.1981 as cost of acquisition and the same has been allowed set off in full against certain plots of land (out of whole of the ancestral land so converted and divided into plots of land) which have been sold during the year. We donot agree with the contention of the ld DR to exclude the cost relating to roads. What the assessee can claim is the proportionate cost of acquisition corresponding to the plots of land which has been sold during the year and we therefore find the order of the AO is erroneous to this extent. At the same time, we find that the assessment order passed by the Assessing Officer U/s 143(3) of the Act was also subject matter of appeal before the ld. CIT(A) wherein the assessee has challenged the assessment of long term capital gain on sale of agricultural land which in turn include determination of cost of acquisition for working out such capital gains. Therefore, the present ground relating to cost of acquisition raised by the ld. Pr. CIT in invoking his jurisdiction U/s 263 was very much the subject matter of appeal before the ld CIT(A) and to this extent, we agree with the contention of the ld AR that the ld Pr. CIT cannot exercise his jurisdiction under Section 263 of the Act as far as this matter is concerned and to this extent, order of the ld Pr CIT stand modified. We modify the order of the ld Pr CIT to the limited extent of issue relating to cost of acquisition not falling under his jurisdiction u/s 263, being the subject matter of appeal before the ld CIT(A) and the remaining order is hereby sustained. - decided partly in favour of assessee
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