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2020 (9) TMI 764 - AT - Income TaxRevision u/s 263 - proceedings for reopening the assessment were initiated and assessment was completed u/s 148/143(3) - assessee has wrongly shown this income under the head of capital gain which was actually business income - As per CIT assessee has sold the land of same area which was purchased and in the original return filed the transaction for the land sale was shown under the head capital gain whereas in the return filed in reopening proceedings it was shown as business income and the same was accepted by the AO and he had not examined this issue - HELD THAT:- The finding of the Pr. CIT are not correct because the assessee has purchased agriculture land measuring 36/68 part of 0.86 hectare whereas she sold the 3600 square meter industrial plot. So the land sold and land purchased was not same and the finding in the order u/s 263 is not correct. The important fact which has been ignored by the PCIT is that in computation of income filed with the original return the assessee has made a mistake that he has shown the land transactions under the head capital gain income whereas the transaction was purely a business transaction. The object behind the purchase of land is to convert it into the industrial land and after development sale it on good price for earning profit. Transaction of purchase and sale and conversion is purely a business transaction and the assessee has wrongly shown it as capital gain which has been corrected vide filing the revised return copy of which is placed on paper book. By filing return in response to notice u/s 148 the assessee has corrected her mistake and shown this transaction in business income. AO has examined all the issues regarding sale of lands. All the details were submitted before the learned AO. The assessment order passed by AO was neither erroneous, nor prejudicial to the interest of the revenue. Revision under section 263 by PCIT was not justified as all the four issues questioned by PCIT were thoroughly examined by AO during the assessment proceedings, and after considering relevant facts and explanations furnished by assessee had chosen to accept the claim of the assessee and hence, the same could not be termed as non consideration of issues or AO had failed to carry out required enquiries, which ought to have been carried out in accordance with law. Thus the order passed by the learned PCIT deserves to be quashed. Brokerage and commission payment - During the reassessment proceedings the assessee has submitted details of brokerage payment the vouchers and other details are placed on paper book page and TDS was also deducted on brokerage payment treating the transaction as business transaction. Therefore the expenditure incurred on brokerage and commission was fully verifiable and the detail was submitted during the reassessment proceedings.Therefore this objection was also not sustainable. Interest received are shown more as against the interest received - The reason for the difference was duly explained and the learned AO has verified the same. Therefore again this objection was not acceptable for invoking the provisions of section 263. Difference in Proprietor’s capital against the capital shown in earlier return - As clarified that the assessee was maintaining books of account for his business of M/s Gupta Engineering Works separately and individual books are kept separately. The individual capital of the assessee was ₹ 1,23,40,013/- out of which the assessee has invested capital of ₹ 26,21,641/- in M/s Gupta Engineering Works. So the capital in individual capacity was ₹ 1,23,40,000/- and capital of M/s Gupta Engineering was ₹ 26,21,641/-. Copy of balance sheet, Profit & Loss A/c and other relevant documents are placed on paper book page no. 71 to 82. Therefore the difference in the figures of other income and interest income was duly explained and the objection in this regard is also not sustainable. It is not a fit case for passing the order u/s 263 of the Act by the ld. Pr.CIT . The order passed u/s 143(3) r.w.s. 148 of the Act by the AO was neither erroneous nor prejudicial to the interest of the revenue. Thus the order passed by the AO is confirmed and the main grounds of appeal of the assessee are allowed.
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