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TMI Blog2014 (7) TMI 635X X X X Extracts X X X X X X X X Extracts X X X X ..... it is necessary to file appeal against the impugned order u/s. 263 of the Act passed by the CIT. Being so, he realised that earlier advice given by Sri K. Zabi ur Rahaman, ITP is wrong. Accordingly, he filed the present appeal before this Tribunal on 18.6.2013 with a delay of 376 days. The learned AR prayed that the delay may be condoned and the appeal may be admitted for adjudication on merit. 3. The learned DR has not raised any serious objection for condoning the delay in filing the appeal. 4. We have gone through the reasons advanced by the learned counsel for the assessee. In our opinion, there is valid reasonable cause in filing the appeal belatedly by 376 days before this Tribunal. Considering the totality of facts and circumstances of the case and in the interest of justice, we are inclined to condone the delay and admit the appeal for adjudication on merit. 5. Originally the assessee had filed lengthy grounds which was pointed out to the assessee by the Tribunal and thereafter ha has filed concise grounds which are as follows: 1. The order of the learned CIT, Tirupati is erroneous both on facts and in law. 2. The learned CIT erred in holding that there is an error in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how this arrangement of paying Rs. 1.25 crores to Sri I. Venugopal Reddy and as to how the sale consideration receivable has been truncated from Rs. 52,94,117 to Rs. 8,33,000. The AO has failed to examine how this Rs. 44,61,117/- cannot be taxed in the hands of the assessee for assessee being owner of that portion of the land. (iii) On the reverse side of the Page '1' of the Sale Deed, it is noticed that the vendor has paid an amount of Rs. 13,56,000 towards stamp duty and registration on a sale consideration of Rs. 1.50 crores. The SRO value of the sale property is not clearly seen from the Sale Deed to be examined u/s. 50C of the Act. The AO in the absence of clarifying on the SRO's value and the sale consideration should have made enquiries with the concerned SRO for examining the same u/s. 50C. 7. The CIT further observed that the assessee has also debited Rs. 33,320 towards brokerage and commission paid with Rs. 75,630 towards the cost of improvement, levelling of land etc. The genuineness of expenditure has also not been enquired into by the Assessing Officer during the course of scrutiny proceedings. As against Rs. 15,192 of interest income from Canara Bank, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cated. Similarly, he has submitted that the fair market value of the property sold is Rs. 1.50 crores only but could not furnish any certificate from the SRO to this effect. Regarding the sources for cash deposits in the Canara Bank account he has repeated his version that part of the same was from realization of Sundry Debtors and from sale consideration received. He has not offered any additional evidence as to who were the debtors and how the same were returned. Regarding the receipt of money from Sri Rayapa Reddy of USA, it is merely stated that Rs. 10 lakhs was received by way of Sri Rayapa Reddy but could not submit the confirmation letter for the time being and requested for reasonable time to produce the confirmation. 9. The CIT observed that all the above explanations offered by the assessee during the proceedings u/s. 263 were not new of anything nor any additional information furnished to quench the nagging doubts arising from the erroneous assessment. Merely because a substantial chunk of a sale consideration was ordained to be paid to one of the co-sellers without any statutorily recognizable liability, the assessee cannot be absolved from liability on capital gains t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As described by the Vendor No. 1 and Vendor No. 3 the aforesaid payment has been made in the name of vendor No. 2. Further, the purchaser paid to the vendor the entire remaining balance sale consideration of Rs. 25,00,000 (Rupees twenty five lakhs only) in the following manner: A By pay order bearing No. 396645 drawn on Amanath Co-operative Bank Ltd., Shivajinagar Branch, Bangalore 1. Dt. 26.4.2005 in favour of vendor No. 1 8,33,000 B By pay order bearing No. 396643 drawn on Amanath Co-operative Bank Ltd., Shivajinagar Branch, Bangalore 1. Dt. 26.4.2005 in favour of vendor No. 2 8,34,000 By pay order bearing No. 396644 drawn on Amanath Co-operative Bank Ltd., Shivajinagar Branch, Bangalore 1. Dt. 26.4.2005 in favour of vendor No. 3 8,33,000 , 25,00,000 12. According to the AR the payment of consideration to various parties has been clearly mentioned in the sale deed and the sale deed was duly furnished to the AO and the AO after carefully going through the said sale deed satisfied with the offer of income by the assessee arising out of the sale transaction of the said property. He opted not to make any addition on this count and the capital gain accrued to the assessee has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of human activity. 13. According to the learned AR if the AO failed to mention the nature of enquiry carried on by him in the assessment order that does not make the assessment order erroneous or prejudicial to the interests of revenue. The assessee at best could furnish the details which are relevant for assessment and it is the duty of the AO to examine the same before reaching to a conclusion. In the present case the assessee furnished supporting evidence regarding his claim which has been accepted by the AO and the AO has not gathered any evidence to suggest that there is any escapement of income. Being so, he has accepted the admitted income and completed assessment. The only grievance of the learned CIT was that the AO should have made further enquiry rather than accepting claim of the assessee. Therefore, it cannot be said that it is a case of "lack of enquiry". The assessee's case does not fall in the sphere where there was no enquiry by the AO. He submitted that provisions of section 50C are not applicable to assessee's case and there is no material to suggest that the assessment order is erroneous and prejudicial to the interests of revenue. Therefore, accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,000 , 25,00,000 17. The contention of the assessee's counsel is that the consideration is paid as per the contract to each party involved in the sale deed and the sale deed is the basis for payment. However, we are unable to appreciate on what basis the consideration is determined to each person. When these parties joined together to sell the properties mentioned herein above, the consideration shall be in proportionate to the value of the respective property what they sold. It cannot be on any unilateral basis of these three vendors. The value of consideration is attributable to each of the property is to be payable to the corresponding vendor. It it noted by the CIT that the basis of consideration of each property is not in accordance with the share of their property. Being so, there is error in offering capital gain by the assessee in respect of his share in the property. Thus, it is apparent that the AO in the course of assessment proceedings, though all the materials available on record, failed to cause enquiry regarding the share of assessee in the sale consideration. He just collected the data and without examining the same passed the assessment order, which makes the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conclusion that more than one view is possible then he has necessarily to choose a view, which is most appropriate on the facts of the case. In order to apply the aforesaid observations to a given case, it must therefore first be shown that the Assessing Officer has "adopted" a permissible course of law or, where two views are possible, the Assessing Officer has "taken" one such possible view in the order sought to be revised under Section 263. This requires the Assessing Officer to take a conscious decision; else he would neither be able to "adopt" a course permissible in law nor "take" a view where two or more views are possible. In other words, it is the Assessing Officer who has to adopt a permissible course of law or take a view where two or more views are possible. It is difficult to comprehend as to how the Assessing Officer can be attributed to have "adopted" a permissible course of law or "taken" a view where two or more views are possible when the order passed by him does not speak in that behalf. We cannot assume, in order to provide legitimacy to the assessment order, that the Assessing Officer has adopted a permissible course of law or taken a possible view where his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udice either to the assessee or to the State Exchequer or to both, the order so passed by him is liable to be corrected. The assessee can have the prejudice caused to him corrected by filing an appeal; as also by filing a revision application under Section 264. But the State Exchequer has no right of appeal against the orders of the Assessing Officer. Section 263 has therefore been enacted to empower the Commissioner to correct an erroneous orderpassed by the Assessing Officer which he considers to be prejudicial to the interest of the revenue. The Commissioner has also been empowered to invoke his revisional jurisdiction under Section 264 at the instance of the assessee also. The line of difference between Sections 263 and 264 is that while the former can be invoked to remove the prejudice caused to the State the later can be invoked to remove the prejudice caused to the assessee. The provisions of Section 263 would lose significance if they were to be interpreted in a manner that prevented the Commissioner from revising the erroneous order passed by the Assessing Officer, which was prejudicial to the interest of the revenue. In fact, such a course would be counter -productive as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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