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Mr. S.R. Nandakishore Versus Deputy Commissioner of Income Tax, Tambaram.

2015 (9) TMI 741 - ITAT CHENNAI

Revision u/s 263 - as per CIT(A) AO has omitted to cause enquiries in respect of business of buying and selling lands and development of lands by plotting them by the assessee and whether these activities are assessable under business income or under the head income from capital gains - Held that:- Assessing Officer neither called for any details with regard to the activities of the assessee nor made any enquiries before allowing the claims of the assessee while completing the assessment. Order .....

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g the Assessing Officer to do the assessment de novo examining all the issues. Accordingly, we uphold the impugned order of the Commissioner of Income Tax and dismiss the appeal of the assessee. - Decided against assessee. - I.T. A.No.984/Mds/2014 - Dated:- 19-8-2015 - SHRI CHANDRA POOJARI AND SHRI CHALLA NAGENDRA PRASAD, JJ. For The Appellant : Mr. N. Devanathan, Advocate For The Respondent : Dr. U. Anjaneyalu, CIT ORDER Per Challa Nagendra Prasad, JM: This appeal is filed by the assessee again .....

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ance with law. 2. Brief facts are that assessee, an individual, filed return of income for the assessment year 2009-10 on 31.10.2009 declaring total income of ₹ 1,07,35,030/-. Assessment was completed under section 143(3) on 26.12.2011 accepting the income returned. Later, Commissioner of Income Tax passed order under section 263 of the Act setting aside the assessment for de novo consideration to pass fresh assessment in accordance with law for the reason that the Assessing Officer has om .....

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that Assessing Officer had considered the details and income arising out of sale of lands as capital gains. However, on examining the records and perusing the assessment order, Commissioner of Income Tax was of the view that necessary enquiries were not made by the Assessing Officer on the activities of the assessee and therefore held that assessment order is erroneous and prejudicial to the interests of the Revenue. Thus he set aside the assessment for de novo consideration after giving adequat .....

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the immediately preceding assessment year i. E. 2008-09 and on examination of all the details furnished by the assessee, the Assessing Officer accepted that the activities of the assessee in developing the land, making plots and selling them is not in the nature of business and the gains on such activity are to be assessed only under capital gains. He further submits that on satisfied with the submissions of the assessee, the Assessing Officer dropped 147 assessment and completed the assessment .....

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tion. Departmental Representative submits that the Assessing Officer neither called for any details in respect of activities of the assessee nor examined them and passed order without verifying the activities of the assessee and this made the assessment order erroneous and prejudicial to the interest of the Revenue and thus the Commissioner of Income Tax has properly exercised the jurisdiction under section 263 of the Act. 5. Heard both sides. Perused orders of lower authorities. In this case, t .....

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either the Assessing Officer called for any details regarding the activities of the assessee nor assessee furnished any materials before the Assessing Officer so as to say that Assessing Officer examined the activities of the assessee and has accepted the claims of the assessee made under capital gains. When asked for reasons for reopening of the assessment for assessment year 2008-09, counsel for the assessee expressed his inability to produce the reasons for reopening. In the absence of reason .....

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pital gains instead of business income, we are unable to accept the submissions since the Assessing Officer has not examined the activities of the assessee at all. There is no finding as to whether the assessee is co-owner of the land, how he is co-owner of the lands of other co-owners, whether the property is jointly held by the other co-owners along with the assessee and in what way the assessee is concerned with those persons is not clear from record. Further on a perusal of the wealth-tax as .....

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er examined all those things while completing the original assessment under section 143(3) of the Act. Therefore, since the Assessing Officer has not called for any such details in respect of various activities of the assessee like developing lands, selling plots etc. and in the absence of any clarification or statement made in the course of assessment proceedings, it cannot be held that Assessing Officer had examined all these details and formed an opinion and allowed the claim of the assessee .....

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sumption of facts or incorrect application of law will satisfy the requirement of the order being erroneous. Similarly, orders passed without applying the principles of natural justice or without application of mind are also erroneous . In the instant case, the Assessing Officer while completing the assessment under section 143(3) never applied his mind to various issues as pointed out by the Commissioner of Income Tax in his order. The Assessing Officer has passed the assessment order allowing .....

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e order passed was erroneous and prejudicial to the interests of the Revenue. 7. The Hon ble jurisdictional High Court in the case of CIT Vs. Seshasayee Paper and Boards Ltd. (242 ITR 490) while examining the powers of Commissioner of Income Tax under section 263 observed as under:- That the Commissioner found that the Income-tax Officer was not correct in granting relief with respect to some of the items considered in the original assessment proceedings and from the instances or specimens of so .....

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