TMI Blog2020 (2) TMI 1273X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee-Firm being the owner. This would also strengthen the case of the assessee that it was owner of the property in question. The assessee also produced sufficient evidence before A.O. to show that it has earned agricultural income out of the sale of agricultural land and agricultural produce. Since the case was selected for limited scrutiny only on these points and assessee furnished adequate explanation and evidences before the A.O, which have been examined by the A.O, therefore, it is not a case of even inadequate enquiry. In the show cause notice issued by the Ld. Pr. CIT, Dated 21.12.2018, at the end of Para No.6, after considering the facts of the case noted that it seems that the A.O. has not properly examined the documents filed and merely accepted the explanation of the assessee without even asking further queries on the above emanated issues. It seems that, Assessment order passed by the A.O. in this case is erroneous and prejudicial to the interests of the Revenue. The Ld. Pr. CIT has referred the word seems twice in para 6 of the above show cause notice. It would, therefore, show that even he was not sure whether it is a fit case of invoking jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at ₹ 4,27,442/-. The A.O. accepted the returned income vide Order Dated 25.11.2016 under section 143(3) of the I.T. Act, 1961. 3.1. The Ld. Pr. CIT on examination of the assessment records found that assessee has shown total agricultural income of ₹ 1,99,76,064/- arising out of profit on sale of agricultural land of ₹ 1,95,48,622/- and agricultural income from sale of agricultural produce of ₹ 4,27,442/-. During the year assessee has claimed to have sold agricultural land including trees etc., for a sum of ₹ 2.25 crores on 22.08.2013. On perusal of the Sale Deed Dated 22.08.2013, it was seen that Shri Satbir resident of Faridabad, sold the land measuring 12.15 hectares to Shri Dilip Arya through Attorney Shri Vinod Kumar Garg for ₹ 2.25 crores. The registration expenses on the sale of the land was of ₹ 18,65,870/- has been claimed to have been paid by the assessee. Shri Vinod Kumar Garg who had the Power of Attorney for sale of the abovementioned land is one of the partners of the Assessee-Firm. The land has not been sold by Shri Satbir on behalf of the Company or LLP Firm, but, by him in his individual capacity. In the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Satbir sold the property through Shri Vinod Kumar Garg for a consideration of ₹ 2.25 crores, therefore, neither the Company nor the Firm was owner of the property in question. 3.2. As regards stamp duty paid on sale of land at ₹ 18,65,870/-, it was explained that it has withdrawn cash from Union Bank amounting to ₹ 15 lacs on 05.08.2013 and ₹ 32,500/- on 08.08.2013 and furnished a Slip of ₹ 15,65,870/-. There was a difference found in the same since in the sale deed it is mentioned that purchaser has paid the expenses. Therefore, there is no question of assessee paying any expenses. This fact is also not verified by the A.O. It was also found that the audited accounts of the Company and the Firm have shown land at Berhore valued at ₹ 10,85,000/-, but, the land sold at Tehsil Kaluhera, District Jaipur, was purchased for a consideration of ₹ 30,83,200/-. Therefore, both are two different properties. The Ld. Pr. CIT, therefore, noted that these issues have not been verified by the A.O. Explanation- 2 to Section 263 of the Income-Tax Act, 1961 is clearly attracted in this case. The assessment order was set aside and A.O. was directe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s another reply filed before Ld. Pr. CIT. PB-3 to 4 are the balance sheet of assessment year under appeal to show that after sale of the land, it has removed from the fixed assets and value have been shown at NIL and in income, net agricultural income have been shown from sale of agricultural land as well as produce and claimed exemption. PB-5 onwards is statutory notice issued by the A.O. at assessment stage asking the copy of the land record of the land from which agricultural income has been earned, gross receipts from agriculture, total expenditure along with bills and vouchers, details of agricultural produce along with the sale bills etc. PB-7 is reply filed by the assessee at assessment stage submitting complete details of ownership of the land and the sale details along with audited accounts etc., to prove the above facts. PB-10 to 30D are the copy of the sale deed dated 22.08.2013 which clearly mentioned Khasra 197/12.15 Hectare and name of the Company M/s. Magic Landcon LLP which is mentioned in the sale deed who have received the sale consideration. PB-31 to 41 are the replies filed before A.O. to explain that profit on sale of agricultural land is exempt from tax. Detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after insertion of Explanation-2 to Section 263 of the Income Tax Act need to point-out the failure on the part of the A.O. in not conducting relevant enquiries which were critical for decision of the issue. He has relied upon Judgment of the Hon ble Delhi High Court in the case of Pr. CIT-11 vs., Indian Farmers Fertilizers Cooperative Ltd., ITA.No.597/2017, Dated 02.08.2017. Since, A.O. examined all the issues at assessment stage and accepted the contention of assessee, therefore, the assessment order is not erroneous insofar as prejudicial to the interest of revenue. Therefore, order need to be set aside. 5. On the other hand, Ld. D.R. relied upon the impugned order of the Ld. Pr. CIT and submitted that A.O. has not enquired into all the issues at assessment stage. Therefore, Ld. Pr. CIT has rightly set aside the impugned order. 6. We have considered the rival submissions and perused the material on record. It is not in dispute that case of the assessee was selected for limited scrutiny for the reason large agricultural income . The A.O. issued statutory notices to the assessee calling for explanation on the above issue. The assessee submitted necessary details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Holder. The explanation of assessee is thus acceptable that there may be a typographical error in mentioning the property at Berhore in the audited accounts of the assessee-company. Learned Counsel for the Assessee, during the course of arguments have also submitted that the Berhore is a big area and as such it might have been mentioned though the property falls in the same area. These facts also supports the explanation of assessee that assessee owned the agricultural land and sold it for a consideration which have been duly disclosed to the Revenue Department in earlier year as well as in assessment year under appeal. The assessee also filed complete details of the same before A.O. through various replies. The assessee also explained that agricultural income was earned out of the same agricultural land which is supported by bills of Krishi Upaj Mandi Samiti , Kotputli. Thus, the assessee produced all the documentary evidences and explanation before A.O. at assessment stage and explanation of assessee has been accepted that assessee earned exempt income on account of sale of agricultural land and sale of agricultural produce. It is well settled that when A.O. called for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the case of the assessee that it was owner of the property in question. The assessee also produced sufficient evidence before A.O. to show that it has earned agricultural income out of the sale of agricultural land and agricultural produce. Since the case was selected for limited scrutiny only on these points and assessee furnished adequate explanation and evidences before the A.O, which have been examined by the A.O, therefore, it is not a case of even inadequate enquiry. In the show cause notice issued by the Ld. Pr. CIT, Dated 21.12.2018, at the end of Para No.6, after considering the facts of the case noted that it seems that the A.O. has not properly examined the documents filed and merely accepted the explanation of the assessee without even asking further queries on the above emanated issues. Thus, it seems that the assessment order passed by the A.O. in this case is erroneous and prejudicial to the interests of the Revenue. The Ld. Pr. CIT has referred the word seems twice in para 6 of the above show cause notice. It would, therefore, show that even he was not sure whether it is a fit case of invoking jurisdiction under section 263 of the Income Tax Act, 1961. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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