TMI Blog2016 (1) TMI 1103X X X X Extracts X X X X X X X X Extracts X X X X ..... t: Shri Subash Agarwal, Advocate For the Respondent: Shri Niraj Kumar, CIT(DR) ORDER Per Shri N.V.Vasudevan, JM This is an appeal by the assessee directed against the order dated 27.03.2012 of CIT- I, Kolkata passed u/s 263 of the Income Tax Act, 1961 (Act) relating to A.Y.2007-08. 2. The Assessee is a company engaged in the business of land development and sale. It filed the return of income for A.Y.2007-08 declaring total income at Rs.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 ₹ 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 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting documents filed in the course of assessment proceedings. He contended that the AO had applied his mind after proper inquiry and concluded the assessment. The assessee pointed out that with regard to the liability of ₹ 1.23 crores received from prospective buyers of the developed land the agreement with the land holders were duly examined by the AO on a test check basis. It was also pointed out that in the case of a company which was the first year of the operation there cannot be any addition 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 tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s respect nor any enquiry/verification was made during the assessment. CIT accordingly set aside the order of assessment with the direction to frame assessment after making thorough enquiry regarding the source of funds claimed as advance by the assessee received from prospective plot purchasers and also to examine their identity, creditworthiness and genuineness of the transaction. 6. Aggrieved by the order of CIT the assessee preferred the present appeal before Tribunal. 7. We have heard the rival submissions. A perusal of the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O failed to make proper enquiries with regard to the money received from prospective buyers of developed land. The jurisdiction of the CIT u/s 263 of the Act can be exercised only when he find that order of the AO which is sought to be reviewed u/s 263 of the Act was erroneous and prejudicial to the interest of the revenue. The law is well settled that failure of the AO to make an enquiry which he ought to have made before concluding the assessment, renders his order erroneous and prejudicial to the interest of the revenue. The question before us is 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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