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2012 (2) TMI 680

ya ORDER Per Pramod Kumar: 1. By way of this appeal, the assessee appellant has called into question correctness of the order dated 25th August 2009 passed by the learned Commissioner of Income Tax-XII Kolkata, under section 263 r.w.s. 143(3) of the Income Tax Act, 1961, for the assessment year 2006-07, on the following ground: That the order of the learned Commissioner of Income Tax -XII, Kolkata, under section 263 of the Income Tax Act, 1961, setting aside the order of the learned Assessing Officer and directing him to make a fresh assessment order is contrary to the law and facts of the case. 2. The relevant material facts, to the extent necessary for the disposal of this appeal, are as follows. During the course of the assessment procee .....

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s only 24.13% of the value arrived at by the DVO , and, therefore, there is no doubt that the order under reference is erroneous and prejudicial to the interest of the revenue . A show cause notice was, accordingly, served upon the assessee requiring him to show cause as to why the related assessment order under section 143(3) not be subjected to revision proceedings under section 263. 3. The assessee vehemently opposed the revision proceedings. It was contended that once the assessment proceedings were completed, there was no good reason for valuation proceedings to continue. Reliance was placed on the judgment of Hon ble Calcutta High Court in the case of Reliance Jute & Industries Ltd Vs CIT (150 ITR 643). It was also contended that .....

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ed 9.12.2003, Jaichand Lal Chopra HUF enhanced the offer price to ₹ 22,00,000 and submitted a cheque of ₹ 2,20,000 issued by the assessee. This offer was accepted by the Bank, and the assessee, nominated by Jaichand Lal Chopra HUF for purchasing a part of the property i.e. 14 A Cossipore Road, finally purchased the property from the Allahabad Bank. The draft sale deed was received from the bank on 1.9.2003, and finally it was approved on 4.8.2005. It was thus contended that there cannot be, as such, any dispute about the price at which the assessee has purchased the property in question. On the strength of these submissions, as also other submissions not being reproduced here for the sake of brevity, learned Commissioner was urg .....

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e case as also the applicable legal position. 6. We find that the foundation of impugned revision proceeding rests on the DVO s report, which came on record after the assessment was completed, which showed that the value of the property was much higher than the value stated in the purchase deed. The fact that the assessee bought the property at a rate lower than what could have been the prevailing market price, even if that be so, does not render the assessment order erroneous. It has no implications on the assessed income of the assessee, nor does it prejudice the legitimate interests of the revenue authorities in any other manner. We do not find any provisions in the statute which enable the Assessing Officer to substitute the purchase pr .....

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lier, there is no statutory provision requiring the assessee to adopt the value as per DVO as the purchase consideration, and, for that purpose, even if fair market price of the property is higher than the value at which it is purchased, it does not result in an addition in the hands of the assessee for that reason. Learned Departmental Representative s next plea is that it is not really necessary that the order must be actually erroneous because as long as Commissioner considers (emphasis supplied by the learned Departmental Representative) it erroneous, the provisions of Section 263 can be invoked. This plea is devoid of any legally sustainable merits. Hon ble Bombay High Court has, in the case of CIT Vs Gabriel India Limited (203 ITR 108 .....

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passed will be rendered erroneous because it is incumbent on the Income-tax Officer to further investigate the facts stated in the return when circumstances would make such an inquiry prudent and it is for this reason that the word erroneous in section 263 includes the failure to make such an inquiry . There is nothing to provoke an enquiry about market price of the property purchased in the present case, because an enquiry into market price cannot be simply an academic delight, it must serve some purpose, and some addition to the income of the assessee should result in the event of market price being too high vis-à-vis the price at which property is purchased. That is not the case here. Finally, learned Departmental Representative .....

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