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Smt. G. Lakshmi Versus DCIT, Circle-3 (1) , Visakhapatnam

2016 (12) TMI 1490 - ITAT VISAKHAPATNAM

Revision u/s 263 - A.O. failed to examine cost of acquisition of an asset claimed by the assessee even though registered deeds shows cost of acquisition, which is less than the cost of acquisition claimed by the assessee - Held that:- On perusal of the facts available on record, we find that the A.O. has conducted detailed enquiry and also examined the issue of computation of cost of acquisition in the reassessment proceedings. The re-assessment proceeding was initiated for a specific purpose of .....

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ous in so far as it is prejudicial to the interest of the revenue. In the present case, the assessment order passed by the A.O. is neither erroneous nor prejudicial to the interest of the revenue, therefore, the CIT was erred in assuming jurisdiction to revise the assessment order u/s 263 of the Act. We, therefore, set aside order passed by the CIT u/s 263 of the Act and restore assessment order passed by the A.O. u/s 143(3) r.w.s. 147 of the Act. - Decided in favour of assessee - I.T.A.No.231/V .....

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f the Act and it pertains to the assessment year 2007-08. Since, the facts are identical and issues are common, they are clubbed, heard together and disposed-off by way of this common order for the sake of convenience. 2. The brief facts of the case are that the assessee is an individual filed her return of income for the assessment year 2007-08 on 30.11.2007 declaring total income of Rs. 28,29,530/-, besides agricultural income of Rs. 2,40,000/-. The assessment was completed u/s 143(3) of the A .....

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tion of Rs. 29,41,000/-, claimed cost of acquisition of Rs. 28,98,700/-. On verification of the sale deed no.4011/2005 dated 14.9.2005 registered with the SRO Bhogapuram, it is noticed that said land was purchased for a consideration of Rs. 4,45,805/-. The assessee has claimed cost of acquisition of the property of Rs. 28,98,700/- as against actual cost of acquisition of Rs. 4,45,805/-, which resulted in excess claim of cost of acquisition of Rs. 21,75,695/-, consequently, income chargeable to t .....

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ssee. The CIT further observed that as per the copy of sale deed furnished at the time of assessment, it was noticed that the assessee has purchased lands for a consideration of Rs. 4,45,805/-, whereas claimed cost of acquisition of Rs. 28,98,700/-. While completing the re-assessment proceedings, the assessing officer accepted the contention of the assessee that although copies of unregistered purchase and sale agreements were not furnished by the assessee along with the return of income filed i .....

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ess than the cost claimed by the assessee, the assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the interest of the revenue. 4. It is the contention of the assessee that the assessment order passed by the A.O. u/s 143(3) r.w.s. 147 of the Act, is not erroneous in so far as it is prejudicial to the interest of the revenue, as the A.O. has examined the issue of computation of short term capital gain from sale of lands in the re-assessment proceedings by calling fo .....

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actual consideration paid as per the sale agreement for purchase of property and arrived at a short term capital gain. The A.O. after considering the copies of registered sale deeds as well as unregistered sale agreements has accepted the computation made by the assessee and hence the assessment order passed by the A.O. cannot be considered as erroneous in so far as it is prejudicial to the interest of the revenue. 5. The CIT after considering the explanations of the assessee, held that assessme .....

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e tune of Rs. 21,75,695/-. Though, the documents clearly depicts actual consideration for purchase of property, the A.O. seems to have confused the need for proper scrutiny and objective evaluation of the unregistered agreements, particularly, the purchase agreements with one of the principles of natural justice of perhaps opportunity of being heard without realizing and appreciating that the assessee in any case was given an opportunity to lead evidences in support of her contentions but the ta .....

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prejudicial to the interest of the revenue. Accordingly, set aside assessment order passed by the A.O. u/s 143(3) r.w.s. 147 of the Act with a direction to re-examine the issue of purchase consideration as claimed by the assessee with reference to the unregistered purchase agreements and take an objective and fair decision after giving the assessee a reasonable opportunity of being heard. Aggrieved by the CIT order, the assessee is in appeal before us. 6. The Ld. A.R. for the assessee submitted .....

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ition claimed by the assessee, therefore the CIT was completely erred in stating that the assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the interest of the revenue. 7. On the other hand, the Ld. D.R. strongly supported order of the CIT. 8. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The CIT revised assessment order u/s 263 of the Act, for the reason that the A.O. failed to exa .....

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egistered sale deed, the A.O. failed to examine the authenticity of the sale agreements produced by the assessee. It is the contention of the assessee that in the re-assessment proceedings, the A.O. has examined the copies of registered sale deeds as well as unregistered sale agreements to come to the conclusion that the cost of acquisition claimed by the assessee is correct. The assessee further contended that she had considered sale consideration as per the unregistered sale agreement as again .....

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ered sale consideration towards sale of property as per the unregistered sale agreement, as against which she had considered cost of acquisition of the property as per the unregistered sale agreement for purchase of property. Although, registered sale deeds towards purchase and sale of property shows a consideration, which is less than consideration claimed by the assessee, the fact that these documents were furnished before the A.O. at the time of re-assessment proceedings and the A.O. has cons .....

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which she had claimed cost of acquisition as per the unregistered sale agreement for purchase of property and computed short term capital gain of Rs. 42,300/-. If you consider registered deeds for purchase and sale of property, the assessee has purchased the impugned property for a consideration of Rs. 4,45,805/- and sold said land for a consideration of Rs. 4,50,000/-. If you work out the difference between sale consideration and cost of acquisition, the short term capital gain works out to le .....

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d. Therefore, we are of the view that there is no prejudice is caused to the revenue towards computation of short term capital gain from sale of property and hence, assessment order passed by the A.O. is not prejudicial to the interest of the revenue. 10. The CIT has power to revise assessment order u/s 263 of the Act, but to invoke the provisions of section 263 of the Act, the twin conditions must be satisfied i.e. (1) the order of the A.O. is erroneous (2) further it must be prejudicial to the .....

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ume jurisdiction to revise the assessment order, this is because the twin conditions i.e. the order is erroneous and the same is prejudicial to the interest of the revenue are co-exist. 11. In the present case on hand, on perusal of the facts available on record, we find that the A.O. has conducted detailed enquiry and also examined the issue of computation of cost of acquisition in the reassessment proceedings. The re-assessment proceeding was initiated for a specific purpose of examination of .....

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it is prejudicial to the interest of the revenue. In the present case, the assessment order passed by the A.O. is neither erroneous nor prejudicial to the interest of the revenue, therefore, the CIT was erred in assuming jurisdiction to revise the assessment order u/s 263 of the Act. We, therefore, set aside order passed by the CIT u/s 263 of the Act and restore assessment order passed by the A.O. u/s 143(3) r.w.s. 147 of the Act. 12. In the result, the appeal filed by the assessee is allowed. .....

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