TMI Blog2019 (8) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 2011-12. One of the argument of the revenue was that no prejudice is caused to the assessee - Decided in favour of assessee Revision u/s 263 - Availability of deduction u/s 54B - order being barred by limitation - HELD THAT:- We do not find any merit in the ground raised by the assessee as the impugned order is well within limitation as prescribed under the law. The order so revised was passed on 23.3.2016. The impugned order u/s 263 is dated 16.11.2017. As per the section 263(2) of the Act, no order can be passed u/s 263(1) of the Act after the expiry of 2 years from the end of the financial year in which the order sought to be revised was passed. In the present case, the impugned order was passed on 16.11.2017, which is well within time. Hence, ground No.1 is dismissed being devoid of any merit as the law speaks of the order sought to be revised but not the issue decided. Deduction u/s 54B - The basis of treating the agricultural land by the Pr. CIT as capital asset is that no evidence was placed on record proving that the agricultural activity was being carried out by the assessee. We find that a bare reading of section 54B of the Act makes it clear that for bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.3.2016. Subsequently, the Ld. Pr. CIT from the records observed that the assessee had shown advances given to one Ms. Smriti Chauhan of ₹ 59,73,000/- as on 31.3.2011 under the head loans and advances whereas Ms. Smriti Chauhan disclosed unsecured loan of ₹ 59,23,000/- from the assessee as on 31.3.2011. Thus, it was inferred by the Ld. Pr. CIT that the assessee had claimed bogus loans and advances of ₹ 50,000/-. On this ground, the Ld. Pr. CIT invoked the provisions of section 263 of the Act and issued a notice u/s 263(1) of the Act on 31.8.2017. In response thereto, the assessee was represented through its authorised representative and written submission was filed. The Ld. Pr. CIT did not accept the submissions as made by the assessee and proceeded to revise the assessment order and set aside the assessment order dated 23.3.2016 pertaining to the assessment year under appeal and directed the assessing Officer to reframe the assessment after examining the aforesaid issue related to loans and advances. Aggrieved against this, the assessee is in present appeal. 4. Ground Nos.1 2 are against initiating the proceedings u/s 263 of the Act and hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xamination was given to the assessee. Merely because Ms. Smriti Chauhan has shown unsecured loan at a lower figure that too of a meager difference of ₹ 50,000/- only would not make the assessment order erroneous and prejudicial to the interest of the revenue. 7. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. The only ground which the Ld. Pr. CIT revised the concluded assessment that Ms. Smriti Chauhan declared a lesser figure of the advances received from Shri Vipin Chauhan, the assessee herein. Ld. Counsel for the assessee has drawn our attention to paper book page No.5, wherein the ledger account of Ms. Chauhan is enclosed. It is noticed that a sum of ₹ 59,73,000/- was paid to Ms. Chauhan from 31.12.2010 to 29.3.2011. There is no dispute regarding this. All these payments have been made through banking channels. We find that Ld. Pr. CIT has not made any enquiry from Smt. Smriti Chauhan. Except that the accounts of Ms. Chauhan, no other evidence supporting that the assessee had not advanced a sum of ₹ 59,73,000/- to Ms. Chauhan. The Ld. Pr. CIT has accepted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsustainable in law. We may notice that the material which the CIT can rely includes not only the record as it stands at the time when the order in question was passed by the Assessing Officer but also the record as it stands at the time of examination by the CIT [see CIT Vs. Shree Manjunathesware Packing Products, 231 ITR 53 (SC)]. Nothing bars/prohibits the CIT from collecting and relying upon new/additional material/evidence to show and state that the order of the Assessing Officer is erroneous. 18. It is in this context that the Supreme Court in Malabar Industrial Co. Ltd. Vs. Commissioner of Income Tax, (2000) 243 ITR 83 (SC), had observed that the phrase prejudicial to the interest of Revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of Revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of revenue. Thus, when the Assessing Officer had adopted one of the courses permissible and available to him, and this has resulted in loss to Revenue; or two views were possible and the Assessing Officer has taken one view with which the CIT may not agree; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d himself in coming to the conclusion that the difference between the figures of ₹ 50,000/- i.e. disclosed by the assessee as a loan and advance and disclosed by Ms. Smriti Chauhan as loan and advance received from the assessee. Therefore, the finding of the Ld. Pr. CIT is not accordance with law. Hence, we hold that Ld. Pr. CIT is not justified in holding that the assessment order sought to be revised is erroneous and prejudicial to the interest of the revenue. Therefore, we set aside the order of the Ld. Pr. CIT and restore the original assessment order. The grounds raised in this appeal are allowed. 12. Now coming to the ITA No.53/Ind/2018, the assessee has raised following grounds of appeal: 1. That on the facts and in the circumstances of the case of the assessee the order passed is barred by limitation. 2. That on the facts and in the circumstances of the case of the assessee, the Ld. CIT was not justified in holding that the order passed by the A.O. is erroneous and prejudicial to the interest of the revenue. 3. That on the facts and in the circumstances of the case of the assessee, the Ld. CIT wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income Tax Act, if he is satisfied that order so passed is erroneous in so far as it is prejudicial to the interest of the revenue. Ld. CIT(DR) further submitted that the assessee is raising such absurd objection just for the sake of objection. It is not supported by the law. 15. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. We do not find any merit in the ground raised by the assessee as the impugned order is well within limitation as prescribed under the law. The order so revised was passed on 23.3.2016. The impugned order u/s 263 of the Act is dated 16.11.2017. As per the section 263(2) of the Act, no order can be passed u/s 263(1) of the Act after the expiry of 2 years from the end of the financial year in which the order sought to be revised was passed. In the present case, the impugned order was passed on 16.11.2017, which is well within time. Hence, ground No.1 is dismissed being devoid of any merit as the law speaks of the order sought to be revised but not the issue decided. 16. Ground Nos.2 to 4 are against invoking the provisions of section 263 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts has merely restored the issue to the file of the A.O. for decision afresh. If the assessee is entitled for any deduction, he can prove before the A.O. Ld. CIT(DR) submitted that no prejudice is caused to the assessee under the facts of the present case. 18. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. We find that Ld. Pr. CIT has observed in the impugned order as under: 4.2 the submissions of the assessee is duly considered. The assessee has failed to substantiate with official documents to support his claim that land sold is being agricultural land. On perusal of the sale deed, it is apparent that the capital gain had arisen on sale of plot admeasuring area of 9310 sq.ft. to M/s. Krishna Builders on 2.6.2011 for ₹ 22,50,000/- (being half share of the land) and claimed exemption u/s 54B of the Act of ₹ 16,92,237/-. It is also noticed that nowhere in the sale deed it is mentioned that the impugned land sold is agricultural land except in page No.02, wherein krishi has been handwritten before Bhumi . 4.3 the relevant por ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) the order is passed allowing any relief without enquiring in to the claim; 5. After careful examination of the facts placed on record, I am of the view that the Assessing Officer did not examine the facts of the case properly as it was required from him. Considering the above facts, I am satisfied that the order passed by the Assessing Officer u/s 153A r.w.s. 143(3) for A.Y. 2012-13 on 23.3.2016 is erroneous and prejudicial to the interest of the revenue. Therefore, the order passed by the Assessing Officer u/s 153A r.w.s. 143(3) for A.Y. 2012-13 on 23.3.2016 is set aside. The assessing Officer is directed to reframe the assessment after examining the above said issue and after affording sufficient opportunity to the assessee of being heard. 19. The basis of treating the agricultural land by the Ld. Pr. CIT as capital asset is that no evidence was placed on record proving that the agricultural activity was being carried out by the assessee. We find that a bare reading of section 54B of the Act makes it clear that for being eligible for deduction u/s 54B of the Act, the land ought to have been used for agricultura ..... X X X X Extracts X X X X X X X X Extracts X X X X
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