TMI Blog2013 (2) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... ependent application of mind; on otherwise debatable issues and by merely disagreeing on the view taken by the AO. - Decided in favour of assessee. - ITA No. 2939/Mum/2011 - - - Dated:- 27-2-2013 - Shri D. Karunakara Rao, Accountant Member And Shri Vivek Varma, Judicial Member Appellant by : Mr. F.V. Irani, Senior Advocate Respondent by : Mr. A.P. Singh ( CIT-DR ) ORDER Per Vivek Varma, JM The appeal is filed by the assessee, challenging the validity of action taken by the CIT under section 263 of the Income-tax Act, 1961, wherein, the CIT, set aside the order under section 143(3), passed by the ACIT -21(2), Mumbai, dated 15.12.2008. 2. The brief facts of the case are that the assessee is a 1/3rd owner of a plot, along with his mother, Mrs. Anjali Pratap Thacker, who is owner with 2/3rd share. The assessee along with his mother, the other co-owner, entered into a development agreement with M/s Reheja Universal Pvt. Ltd., who would construct the building on the land owned by the two co-owners. According to this agreement, the assessee along with the other co-owners shall retain 40% of the developed portion and 60% rights shall go to the developer. In acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ICICI Home Finance Co. Ltd. vs ACIT, in WP No. 430 of 2012, wherein there was a challenge against the issue of notice under section 148. The Hon ble Bombay High Court observes, In fact, the Supreme Court in the matter of India Eastern Newspaper vs. Commissioner of Income Tax, New Delhi, reported in 119 ITR page 996 has held that whether an assessment has escaped assessment or not must be determined by the Assessing Officer himself. The Assessing Officer cannot blindly follow the opinion of an audit authority for the purpose of arriving at a belief that income has escaped assessment. In the present facts, it would be noticed that the reasons for which the assessment for the assessment year 2006-2007 is sought to be reopened by communication dated 12.10.2011 are identical to the objection of the audit authority dated 29.12.2009. The reasons do not rely upon any tangible material in the audit report but merely upon an opinion and the existing material already on record. This itself indicates that there was not independent application of mind by the Assessing Officer before he issued the impugned notice. On this ground alone, the assumption of jurisdiction by the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mr. was not sustainable. The Commr. s order is, therefore, set aside . The AR also referred to the case of Sharma Engineering Co. vs ITO, ITA No. 523/Alld./1985, reported in 26 TTJ 629 (All). 12. With regard to applicability of section 50C on leasehold properties, the AR referred to the case of ITO vs. Sh. Prem Rattan Gupta, ITA no. 5803/Mum/2009 and Atul G. Puranik vs ITO reported in 11 ITR (Trib.) 120, Mumbai, wherein it was held, (iv) That under section 50C the deeming fiction of substituting adopted or assessed or assessable value by the stamp valuation authority as full value of consideration is applicable only in respect of land or building or both. If the capital asset under transfer cannot be described as land or building or both , section 50C will not apply. The lease rights in a plot of land are neither land or building or both nor can they be included within the scope of land or building or both . 13. The AR also referred to the case of Max India Ltd. reported in 295 ITR 282 (SC), wherein the Hon ble Supreme Court of India held, When the Assessing Officer took a possible view, while passing an order of assessment, the Commissioner exceeded his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT under section 263. The AR, therefore, submitted that the jurisdiction invoked by the CIT was therefore bad in law and hence should be held to be invalid. 17. The DR on the other hand submitted that the decisions quoted by the AR on non application of mind are not on the issue of 263 but on 148 and hence they are distinguishable on basic facts and therefore, cannot be relied upon. 18. With regard to the objection that directions under section 263 are not in consonance with that of the SCN, the DR submitted that the issue of application of section 50C on the impugned property was always there and since there was no application of mind by the AO and there being no adequate enquiry on the same, invocation of section 50C under section 263 was valid. 19. The third issue with regard to the receipt and payment of 64,00,000/- was also there and not adjudicated, hence, the CIT was correct in taking the issue in revision proceedings under section 263. 20. The DR, therefore, pleaded that the CIT was correct in setting aside the order passed under section 143(3) and giving directions to the AO for reframing the assessment order. 21. In the rejoinder, the AR once again touche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have seen from the impugned order of the CIT, dated 11.02.2011, the CIT admits, A proposal was received on 10.06.2010 from the AO under section 263 of the Income Tax Act, 1961, pointing out some discrepancies/short comings in the assessment order . This clearly shows that in so far as the CIT was concerned, he did not apply his own mind, which the Hon ble Supreme Court of India has said in ICICI Bank (supra) that there should be an independent application of mind. 24. On perusal of the SCN and the impugned order, we find that there is a departure from the reasons taken to invoke the provisions under section 263, this also finds favour with the arguments advanced by the AR and get covered by the decisions cited by him. 25. We also have to accept the arguments of the AR with respect of applicability of section 50C on lease hold properties, because, this is an undisputed fact that the impugned property was a leased property, even though, it is a long lease, but the title of the same shall always remain with the actual owner, in the present case, BMA. Though the issue is squarely covered by the cited decisions, but going by the submissions of the DR that it is a case of deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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