TMI Blog2018 (3) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... y, we uphold the order of the CIT and dismiss the ground of appeal of the assessee. - ITA No. 361/CTK/2014 - - - Dated:- 5-3-2018 - SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER For The Assessee : Shri B.K.Mohapatra AR For The Revenue : Shri Piyush Kolhe, CIT DR ORDER Per Pavan Kumar Gadale, JM This is an appeal filed by the assessee against the order of the CIT, Cuttack u/s.263 of the Income Tax Act dated 11.3.2014 for the assessment year 2009-2010. 2. Although various grounds of appeal have been raised by the assessee in its grounds of appeal, but the only issue required to be adjudicated before us is as to whether the CIT is justified in assuming jurisdiction u/s.263 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a show cause notice u/s.263 of the Act was issued to the assessee directing to explain as to why the assessment order dated 30.11.2011 should not be cancelled. 5. The assessee submitted that the land premium of ₹ 3,50,00,000/- was paid to the Government of Odisha towards enhanced cost of land for the lands already acquired in earlier years and the lands were already sold to different persons. Therefore, no lands were left to be shown as closing stock. 6. The CIT considered the submissions of the assessee and noted that it has been judicially settled that premium paid for land is capital expenditure and periodical rentals paid is revenue expenditure and referred to the judicial decisions in the impugned order. He observed that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, the CIT has erred in revising the order though it is not prejudicial and erroneous to the interests of the revenue. Ld A.R. explained that ₹ 3,50,00,000/- was paid to Government of Odisha towards lands premium which were sold in earlier years, which is fully allowable expenditure u/s.37 of the Act as the land is not a fixed asset. 9. Contra, ld D.R. relied on the order of the CIT and explained that in the assessment proceedings, the Assessing Officer has not discussed regarding land premium paid to Odisha Government and, therefore, the CIT is justified in setting aside the assessment order by invoking his power conferred u/s.263 of the Act. 10. We have heard the rival submissions, perused the orders of lower authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r should have made further inquiries before accepting the statements made by the assessee in his return. It was also held that the Income-tax Officer is not only an adjudicator but also an investigator. It is his duty to ascertain the truth of the facts stated in the return of income. When the circumstances of the case are such so as to provoke an enquiry, it is his duty to make proper enquiry. Failure to make enquiry in such circumstances would make the assessment order erroneous. The Hon ble Apex Court in the case of Smt. Tara Devi Aggarwal vs. CIT, 88 ITR 323 (SC), has held that the CIT may consider an order of the AO to be erroneous not only it contains some apparent error of reasoning or of law or of fact on the face of it but also bec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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