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2012 (2) TMI 680

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..... 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 proceedings under section 143(3), the Assessing Officer noted that the assessee had purchased, vide registered conveyance deed dated 11.8.2005, a property situated at 14A Cossipore Road, Kolkata 2 , consisting of land admeasuring 677.16 square meters and a building constructed thereon, for a stated consideration of ₹ 17,65,000. The Assessing Officer was apparently not satisfied with the stated value of the land and he made .....

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..... 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 a valuation report is nothing more than an estimation and, therefore, the value as per valuation report could not be said to be binding or conclusive. Reference was also made to a coordinate bench s decision in the case of Sahara India Mutual Benefit Co Ltd Vs CIT (74 TTJ 67) in support of the proposition that the Commissioner must examine records personally before satisfying himself that it is a fit case for initiating rev .....

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..... 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 urged to drop the revision proceedings. 4. None of these submissions, however, impressed the learned Commissioner. He observed that the fact that a reference ( to DVO ) was made during the assessment proceedings, suggests that the AO did not make any enquiry vis-à-vis the transactions in respect of the said property and that it is also a fact that the declared value of godown (i.e. the property in question) is only 24.1 .....

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..... 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 price by market price, and, on that basis, proceed to make any additions to income. In any case, the fact that the price on which the assessee has purchased the property is arrived at as a result of bidding in response to public advertisement issued by a nationalized bank does show the bonafides of the price. We are unable to share the perception of learned Commissioner that the assessment order, which was subjected to revisi .....

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..... ually 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), inter alia observed as follows: …..in the instant case, the Commissioner himself, even after initiating proceedings for revision and hearing the assessee, could not say that the allowance of the claim of the assessee was erroneous and that the expenditure was not revenue expenditure but an expenditure of capital nature. He simply asked the ITO to re-examine the matter that, in our opinion, is not permissible. Furt .....

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..... y 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 contends that the assessee cannot be aggrieved of this revision order because the Commissioner has decided nothing against the assessee, and the assessee will have full opportunity of presenting his case to the Assessing Officer. This contention is too naïve to meet any judicial approval. If we have to accept this contention, the concept of finality of assessment will have to be buried deep and time limit for framing t .....

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