TMI Blog2018 (11) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer. It is very much evident that relevant details in this regard were submitted by the assessee during the course of assessment proceedings and the same form part of the record. Therefore, no inference can be drawn that the Assessing Officer has not examined the issue although he may not have expressed it in as many terms as may be considered appropriate by his superior authority and even if the inquiry was inadequate, the same cannot be a ground for revision. It is settled law that an order cannot be termed as erroneous unless it is not in accordance with law. Section 263 does not visualise the substitution of judgment of the Ld. C.I.T. for that of the Assessing Officer. Assessing Officer’s order cannot be held to be erroneous and prejudicial to the interest of the revenue within the meaning of section 263 - Decided in favour of assessee - ITA No.2775/Del/2015 - - - Dated:- 17-9-2018 - Shri N.K. Billaiya, Accountant Member And Shri Sudhanshu Srivastava, Judicial Member For the Assessee : Mr. Abhinav Mehrotra, Adv. For the Department : Smt. Meeta Singh C.I.T. DR ORDER PER SUDHANSHU SRIVASTAVA, JM This appeal has been preferred by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Land at ₹ 24,61,000/-. (b) The Sale value of plant machinery has not been given as the entire composite sale is appearing in the documents provided by the assessee. As per the sale deed the valuation of planting machinery has been shown at ₹ 24,96,000/-. The AO is directed to calculate the Short Term Capital Gain after taking sale price of plant machinery at ₹ 24,96,000/-. (c) . The Sale deed of the property shows stamp duty valuation of the entire property at ₹ 2,89,93,000/- and as the stamp duty value of Land is ₹ 24,61,000/- and the valuation of Planting Machinery is at ₹ 24,96,000/-, the remaining is being considered as stamp duty value of building and it comes to ₹ 2,40,39,000/-. The AO is directed to calculate Short Term Capital Gain after taking the value of full consideration of the building u/s 50C of IT Act at ₹ 2,40,39,000/-. 2.1 Aggrieved by the order of the Ld. Pr. Commissioner of Income Tax), the assessee has now approached the ITAT challenging the revisionary proceedings and has raised the following grounds of appeal:- 1. Because the impugned order passed by Ld. Principal Commissioner of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Because Without Prejudice the learned Pr. CIT Moradabad, grossly erred in Law, while directing the Assessing Officer to compute the Capital Gains on Sale of BUILDING as per provisions of Section 50C, when the same constitutes DEPRICIABLE ASSETS and forms part of BLOCK of ASSETS, hence provision of Section 50C has no application, thereto. 6.2 Because Without Prejudice the learned Pr. CIT Moradabad, grossly erred in Law in directing the AO to calculate Capital Gains in relation to Sale of Building on a stand-alone basis, whereas it is impermissible under law to, exclusively value, BUILDING for the purpose of Section 50C. 7. Because on the facts and in circumstances of the case the learned Principal CIT, Moradabad, failed to take cognizance of the cardinal error of jurisdiction committed by the AO while framing the assessment, to the extent that NO additions have been made by the Assessing Officer that are referable to the Reasons Recorded for reopening the assessment, hence the entire order is liable to be quashed in view of decision in the case of M/s Jet Airways - Mumbai HC, M/s Ranbaxy - Del HC. 8. Because on the facts and in circumstances of the case the learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Act, 1999 to facilitate the computation of capital gain in the case of transfer of undertaking as a whole and the same was defined in section 2(42C) of the Act as slump sale which would make transfer of one or more undertakings as a result of the sale for a lump sum consideration without values being assigned to the individual assets and liabilities in such sales as a slump sale. It was submitted that since the assessee had sold the entire business at one go, it was the case of slump sale and, accordingly, the provisions of section 50B would apply and not the provisions of section 50C. Ld. AR also placed reliance on a plethora of judicial precedents to support his contention that the order passed u/s 263 deserves to be quashed. 4. In response, the Ld. C.I.T. DR supported the findings and observations of the Ld. Pr. C.I.T. as made in the impugned order and submitted that in view of Explanation 2 to section 263 which has been inserted w.e.f. 1.6.2015, the Ld. Pr. C.I.T. was well within his power to have invoked jurisdiction u/s 263 of the Act. Ld. C.I.T. DR also submitted that the department does not accept the contention of the assessee that it was a case of slump sale as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and examine the record of any proceedings under the Act. A bare reading of Section 263 also makes it clear that the Commissioner has to be satisfied of twin conditions, namely, (i) the order of the assessing officer sought to be revised is erroneous; and (ii) it is prejudicial to the interest of the revenue. If one of them is absent - if the order of the Assessing Officer is erroneous but is not prejudicial to the revenue or if it is not erroneous but it is prejudicial to the revenue - recourse cannot be had to Section 263(1) of the Act [See Malabar Industrial Co. Ltd. vs. CIT, (2000) 243 ITR 83 (SC)]. 5.3 It is also trite that there is a fine, though subtle distinction, between lack of inquiry and inadequate inquiry . It is only in cases of lack of inquiry that the Commissioner is empowered to exercise his revisionary powers by calling for and examining the records of any proceedings under the Act and passing orders thereon. In Gabriel India Ltd. (supra), it was expressly observed:- The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -open a concluded assessment. A bare reiteration by him that the order of the Income-tax Officer is erroneous insofar as it is prejudicial to the interest of the revenue, will not suffice. The exercise of the power being quasi-judicial in nature, the reasons must be such as to show that the enhancement or modification of the assessment or cancellation of the assessment or directions issued for a fresh assessment were called for, and must irresistibly lead to the conclusion that the order of the Income- tax Officer was not only erroneous but was prejudicial to the interest of the revenue. Thus, while the AO is not called upon to write an elaborate judgment giving detailed reasons in respect of each and every disallowance, deduction, etc., it is incumbent upon the Commissioner not to exercise his suo moto revisionary powers unless supported by adequate reasons for doing so. 5.5 The Hon ble Madras High Court held in the case of CIT v Valliammal (D.) (1998) 230 ITR 695 (Mad) that assessment order made after considering all fact and information cannot be revised. Where the assessee had furnished the requisite information and the Assessing Officer had completed the assessment af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5.6 The Hon ble Delhi High Court in CIT vs. Sunbeam Auto Ltd 332 ITR 167 (Del) has opined in Para 17 of its order as under:- 17. We have considered the rival submissions of the counsel on the other side and have gone through the records. The first issue that arises for our consideration is about the exercise of power by the Commissioner of Income-tax under section 263 of the Income- tax Act. As noted above, the submission of learned counsel for the Revenue was that while passing the assessment order, the Assessing Officer did not consider this aspect specifically whether the expenditure in question was revenue or capital expenditure. This argument predicates on the assessment order, which apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However, that by itself would not be indicative of the fact that the Assessing Officer had not applied his mind on the issue. There are judgments galore laying down the principle that the Assessing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an identical issue was examined by the Lucknow Bench of the ITAT in the case of Laxmi Ice Cold Storage vs. ITO in ITA No. 260/LKW/2016 for assessment year 2009-10 wherein, vide order dated 21.02.2018, the Lucknow Bench held that section 50C speaks about transfer of land or building or both and the adoption of deemed valuation being valuation of stamp purposes as the full value of consideration but this does not include plant. The ITAT Lucknow Bench observed that the term plant has been interpreted as cold storage building also and, accordingly, the Bench was of the view that provisions of section 50C would not be applicable to the cold storage building so as to substitute actual sales consideration by deemed sales consideration and, accordingly, the order of the Assessing Officer passed u/s 147/143(3) of the Act could not be a subject matter of revisionary proceedings u/s 263 of the Act. The case of the assessee is identical and for this reason also, we are unable to agree with the directions of the Ld. Pr. C.I.T. in setting aside the assessment order and requiring it to be framed de novo. Therefore, on facts, it is our considered opinion that in the instant case, the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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