TMI Blog2015 (11) TMI 584X X X X Extracts X X X X X X X X Extracts X X X X ..... do not find any error per se in taxing the income resulting from sale of plots impugned under the head “capital gains”. The Commissioner has also failed to take note of section 45(2) which helps the case of the assessee in the alternative. In our considered view, section 263 of the Act cannot be invoked only on any slightest pretext to chase a will-ò-the-wisp. - Decided in favour of assessee. - ITA No.869/PN/2014 - - - Dated:- 30-9-2015 - SHRI VIKAS AWASTHY, JM AND SHRI PRADIP KUMAR KEDIA, AM For The Appellant : Shri Pramod Shingte For The Respondent : Shri S. K. Rastogi, CIT ORDER PER PRADIP KUMAR KEDIA, AM : The captioned appeal filed by the assessee is against the order of Commissioner of Income Tax-I, Pune (in short the Commissioner ) dated 25.03.2013 relating to assessment year 2005-06 passed under section 263 of the Income-tax Act, 1961 (in short the Act ). 2. In this appeal, the assessee has raised the following grounds of appeal :- 1. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax has erred in passing the order u/s 263 of the Income Tax Act, 1961 without considering appellant s conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Revenue. Accordingly show-cause notice was issued to the assessee on 14.03.2012 calling upon her to show-cause as to why assessment order dated 29.11.2010 should not be revised under section 263 of the Act. 5. In response to the show-cause notice, the assessee submitted that she had inherited the land from her late husband and she does not hold any other land, nor purchased even a single piece of land in her life. As she was not having any source of income she decided to sell some portion of the inherited land. As the land was agricultural land within the Municipal limit and the law does not allow to sell portion of the land in piecemeal, she was constrained to covert the same into non-agricultural land so that she could get the required permission for sale and would also get maximum consideration for sale. Therefore, in this background, the assessee stated that the income derived by her on sale of land was liable to be taxed under the head income from capital gains and not under the head business income and that the same has been correctly assessed by the Assessing Officer. 6. The Commissioner did not accept the contention of the assessee. He observed that the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts pertaining to the case were duly placed before the Assessing Officer in the course of assessment proceedings. The assessee is an old lady and during her life time she has not purchased any property including the property on which the impugned capital gain has arisen. The property has been acquired under inheritance which was sold after converting it into nonagricultural land and then sub-dividing the same into smaller plots only to overcome the regulatory difficulties and to generate money for her personal needs. On the similar facts, the case of the assessee is squarely covered by the judicial decisions in the case of Sarojkumar Mazumdar vs. CIT, 37 ITR 242 (SC); CIT vs. Premji Gopalbhai, 113 ITR 785 (Guj.); and, CIT vs. Sushila Devi Jain, 259 ITR 671 (P H). It was submitted by the assessee that the afore-cited decisions would squarely apply to the facts of the present case. Inprinciple, the Ld. Authorized Representative for the assessee emphasized the decision in the case of Premji Gopalbhai (supra) wherein after considering the ratio of the decision of Apex Court in the case of G. Venkatswami Naidu vs. CIT, 35 ITR 594 (SC), it was held that profits arising on sale of ancest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise to tokenism and will not serve any purpose. 11. In the light of the aforesaid contentions raised and judicial decisions relied upon, the Ld. Authorized Representative for the assessee pleaded that the action of the Commissioner in invoking section 263 of the Act is primafacie without authority of law and deserves to be quashed. 12. The Ld. Departmental Representative for the Revenue, on the hand, heavily relied upon the order of the Commissioner under section 263 of the Act. He submitted in furtherance that the bare perusal of the assessment records would show that the Assessing Officer has not examined the issue at all as to whether the income generated from sale of plot is business income or capital gain . He contended that the Assessing Officer has not applied his mind at all to any of the view possible in the facts. The lack of enquiry itself has vitiated the assessment in the light of judicial decision in the case of DIT vs. Jyoti Foundation, (2013) 357 ITR 388 and CIT vs. Software Consultants, 341 ITR 240 (Delhi) and therefore, he pleaded that no interference with the order of the Commissioner is called for. 13. We have carefully considered the rival submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to business. The view is supported by the Hon ble Supreme Court in Sarojkumar Mazumdar (supra), and Hon ble Gujarat High Court in Premji Gopalbhai (supra). Therefore, it is a clear cut case that the Assessing Officer has come to a prima-facie conclusion supported by judicial dicta. The Commissioner is only seeking to replace the view of the Assessing Officer by indulging in long drawn and debatable process to assert his own view which is not permissible under section 263 of the Act. We do not find any error per se in taxing the income resulting from sale of plots impugned under the head capital gains . The Commissioner has also failed to take note of section 45(2) which helps the case of the assessee in the alternative. In our considered view, section 263 of the Act cannot be invoked only on any slightest pretext to chase a will- -the-wisp. The revisionary power under section 263 of the Act can be exercised only when the orders of the authorities are erroneous as well as prejudicial to the interest of the Revenue in terms of section 263 of the Act. When a view is plausible in law, which is taken by the Assessing Officer, the action cannot be said to erroneous. In the light of afo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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