TMI Blog2019 (9) TMI 913X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of section 263 of the Act being prejudicial to the interests of the Revenue prevails. In this case, there was no material to show as to how the order of the Assessing Officer was erroneous in so far as it would become prejudicial to the interests of the Revenue to invoke the jurisdiction u/s. 263 - Decided in favour of assessee. - I.T.A. No. 421/Coch/2019 - - - Dated:- 20-9-2019 - S/Shri Chandra Poojari, AM And George George K., JM For the Assessee : Shri Shantham Bose, CIT(DR) For the Revenue : Shri R. Sridhar, CA ORDER PER CHANDRA POOJARI, AM: This appeal by the assessee is directed against the order of the Pr. CIT, Kochi passed u/s. 263 of the I.T. Act dated 21/02/2019 and pertain to the assessment year 2014-15. 2. The assessee has raised the following grounds of appeal: 1. The order of the PCIT is bad and erroneous in law and against the principles of natural justice. 2. The PCIT erred in not considering the written submission in proper perspective. 3. The PCIT erred in not considering the vital issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer while framing the assessment order. According to the PCIT, the relevant issues, i.e. ₹ 25,00,000/- out of the receipt of ₹ 35,00,000/- on sale of laterite and gravel earth and also the gift received from assessee s sister and mother amounting to ₹ 60,00,000/- remained to be added back and also tax was to be computed on undisclosed income @ 30% u/s. 115BBE. The PCIT observed that in respect of the above, the Assessing Officer had neither made any finding nor obtained any supporting documents from the assessee while allowing. Thus, the PCIT observed that no requisite disallowance/verification had been made by her while completing the assessment. Accordingly, the PCIT held that the assessment order was erroneous in so far as it was prejudicial to the interests of the Revenue. Accordingly, the PCIT set aside the assessment order to the file of the Assessing Officer for de novo examination and to pass a speaking order in accordance with law and per time limit specified u/s. 153 of the I.T. Act, after affording due opportunity to the assessee. 5. Against this, the assessee is in appeal before us. The Ld. AR submitted that sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was submitted that since material was on record and material was considered by ITO and particular view was taken, the mere fact that a different view may be taken should not be basis for action under 263 of the Act. 5.2 The Ld. AR relied on the judgment of the Gujarat High Court in 259 ITR 502 and 313 ITR 65. In case reported in 259 ITR 502 it was held as follows: Coming to the facts of the present case, it is the finding of fact given by the Tribunal that the assesse has produced relevant material and offered explanations in pursuance of the notices issued under section 142(1) as well as section 143(2) of the act and after considering the materials and explanation, the Income-tax Officer has come to a definite conclusion . The Commissioner of Income tax did not agree with conclusion reached by the Income-tax Officer. Section 263 of the Act does not empower him to take action on these facts to arrive at the conclusion that the order passed by the Income-tax Officer is erroneous and prejudicial to the interests of the Revenue. Since the material was there on record and said material was considered by the Income -tax Officer and a partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly when it is a case of lack of enquiry and not one of inadequate enquiry. The Ld. AR referred to the notice u/s. 263 wherein it was mentioned that The gift received from assesses sister and mother amounting to ₹ 60,00,000/- was also not found properly examined by the Assessing Officer while framing the assessment order dated 11-11-2016 . Thus, it was submitted that this was not a case of no inquiry, warranting order under section 263. 5.5 In the present facts, it was submitted that the Assessing Officer was satisfied, consequent to making an enquiry and examining the evidences produced by the assessee and this is a case where a view has been taken by the Assessing Officer on enquiry. Reliance was placed on 390 ITR. 292 (Bom). Thus, it was submitted that the Assessing Officer had made due enquiries with regard to cash deposits into the bank account, more particularly, after examining the details/explanation filed in the course of assessment proceedings. Hence, it was prayed that the order passed u/s. 263 of the Act by the PCIT may be dropped. 6. We have heard the rival submissions and perused the record. Section 263 of the Income-tax Act see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details: From, Mithra Paul 8/243, Pottayail House Mekkadampu (PO) Muvattapuzha Ernakulam- 682316 To, The Income Tax Officer Ward-1 Thodupuzha Dear Sir/Madam, Sub: PA No. ANGPP 7357Q Assessment Year 2014-15 Continuation of hearing conducted on 19-08-2016 Further to the above I am furnishing the details called for at the time of hearing. 1. I had received a rent of ₹ 9,350/- per month from M/s Ahalya Foundation on house property at X/X, Market (Po), Kadathy, Muvattupuzha. I had also received rent of ₹ 7,500/- per month from Sri. Muralidharan for an attached annexe building. The total rent received for the F.Y. 2013-14 amounted to Rs, 1,82,650/- as follows: From Ahalya Foundation 92,650 From Sri. Muralidharan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nkamma Paulose and Mithra my sister had inherited 1.5 acres of rubber plantation at Valakom Village upon demise of our father Sri. P. V. Paulose. Copy of land tax receipt dt. 21-04-2016 is enclosed. 4. Rubber plantation was very old and it was reaching its sag end of natural life. Also since rubber plantation was not economical due to fall in prices and scarcity of workers for tapping and maintenance, we opted to clear the rubber plantation and level the hilly slope into a plain ground. In the process we extracted substantial quantity of hard laterite (vettukal) and loose earth. The sale proceeds at the same in F.Y. 2013-2014 amount to approximately ₹ 60 lakhs. 5. Other than Mithra, only myself and my mother Thankamma PauJose were the owners. I confirm that myself and Smt. Thankamma Paulose allowed Mithra, my sister to enjoy the proceeds of the sale of hard laterite (vettukal) by herself and made a gift of our share of sale proceeds to her. Since Thankamma Paulose is no more and I am the only other heir to the property, I confirm the above facts on behalf of my deceased mother Smt. Thankamma Paulose also. Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eposits made into her bank account were out of sale of said laterite and gravel earth business. Since the assessee s turnover was less than ₹ 1 crore during the previous year, the Assessing Officer had taken a clue from the provisions of section 44AD of the I.T. Act and applied 10% of the total income as income of the assessee from the said business and made an addition of ₹ 9,50,000/- to the returned income of the assessee. 6.5 The PCIT was not agreeing with this view of the Assessing Officer. According to him, the impugned amount deposited into the bank account is to be re-examined by the Assessing Officer. In our opinion, since the Assessing Officer while framing the original assessment, had considered the entire material, was satisfied with the above factual aspect and thereafter, estimated the income of the assessee at 10% and made an addition of ₹ 9,50,000/-. The Assessing Officer had taken one possible view where two views are possible. When the PCIT does not agree, the assessment cannot be treated as erroneous in so far as it is prejudicial to the interests of the Revenue, since the view taken by the Assessing Officer is not unsustainable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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