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TMI Blog2016 (1) TMI 1103X X X X Extracts X X X X X X X X Extracts X X X X ..... NIL. Order of assessment was passed on 30.12.2009 u/s 143(3) of the Act in which the total income of the assessee was assessed at Rs. 48,78,240/-. 3. The CIT in exercise of his powers u/s 263 of the Act was of the view that the previous year relevant to A.Y.2007-08 was the first year of the business of the assessee. The CIT found that the assessee had invested a sum of Rs. 1,01,04,668/- in land purchase and development. The assessee's own funds were only Rs. 2,00,000/-. CIT further found that during the previous year the assessee had availed of unsecured loan of Rs. 1,60,000/- only. CIT found that the assessee had received money from prospective buyers of developed land which was reflected as liability towards plot holders of Rs. 1,23,01,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of unexplained cash credit. In this regard the assessee placed reliance on the decision of the Hon'ble Gauhati High Court in the case of Bongaigaon Refinery and Petrochemicals 287 ITR 120 (Gau). The assessee accordingly prayed that the proposal for revision u/s 263 of the Act should be dropped. 5. CIT, however was of the view that the AO had not made proper enquiries with regard to the advance of Rs. 1.23 crores received from prospective purchasers of land. CIT observed as follows :- "As per the Balance Sheet, the assessee invested Rs. 1,01,04,668/- in land purchase and development during the year, but the assessee's own fund was Rs. 2 Lakh only. Besides, unsecured loan of Rs. 1,60,600/- only is reflected in the accounts. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records reveals that there were 23 hearings in the proceedings before the AO, before conclusion of the assessment proceedings. Copy of the order sheet in respect of the proceedings u/s 143(3) of the Act are placed at pages 17 to 24 of the assessee's paper book. The AO had specifically issued notice u/s 142(1) of the Act dated 29.09.2009 in which he had specifically called upon the assessee to submit the names and addresses, amount of payment, evidence of parties who have advanced for land. The AO also called upon the evidence in the form of plot holder agreement. The assessee had filed a list of prospective purchases of the plot who had given advances together with their addresses the same was filed before the AO during the proceedings u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to whether in the present case the AO made the necessary enquiry with regard to the money received by the assessee from prospective buyers of the developed land. As we have already seen, the AO made enquiries which he ought to have made with regard to receipt of advance from prospective purchasers of plot from the Assessee to ascertain whether the identity, capacity and genuineness of these persons. 9. The Hon'ble Delhi High Court in the case of CIT vs Sunbeam Auto Ltd. 332 ITR 167 (Del.) had taken a view that one has to see from the record that there was application of mind by the AO to an issue in question. Once the record reveals that there was application of mind by the AO then it cannot be said that there was lack of enquiry made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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