TMI Blog2021 (10) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... the value which is less than 10% as per the amended provision - we are of the view that the order passed by the AO is not erroneous and prejudicial to the interests of revenue, as held by the Pr. CIT. AO has taken a view on the issue, on which two views are possible, the view which is taken by the AO, if Pr. CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the Income-tax Officer is unsustainable in law, as per the ratio laid down by the Hon ble Supreme Court in the case of Malabar Industries ltd.[ 1991 (10) TMI 26 - KERALA HIGH COURT] . Every loss of revenue as a consequence of an order of AO cannot be treated as prejudicial to the interests of the revenue, for example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the Income-tax Officer is unsustainable in law. Therefore, in the case under consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs had sold immovable property and the Market value of the property for stamp duty was more than the sale consideration stated in the conveyance deed. Hence, a notice u/s.148 was issued as there was an escapement of LTCG in view of the provisions of Sec. 50C of the Act. During Hie reassessment proceedings, the assessee submitted that she invested the sale proceeds in purchase of flat at Lodha Constructions as per the sale agreement dated 30.07.2010 and filed return of income for the A.Y. 2012-13 disclosing unutilized amount of sale consideration of ₹ 26,08,001/- as Capital gain computed in accordance with the provisions of Sec.50C. Accordingly, the reassessment for the A.Y. 2009-10 was made u/s143(3) rws 147 on 29.05.2014 accepting the income returned of 8,27,280/-. 4.1 The Pr. CIT exercising the powers vested u/s. 263 of the I.T. Act, called for the assessment record of the assessee for the assessment year under consideration and found from the computation statement of total income that the LTCG was calculated by adopting the Market value at ₹ 9,44,98,000/- and assessee being the 1/4th beneficiary at ₹ 2,09,62,515/ and after claiming deduction u/s. 54F toward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich were clearly examined by the AO and reasons were also recorded on the same issues, to which, the AO examined all the issues, on the basis of which, reopening was done and no addition was called and the AO accepted the returned income. . He, therefore, contended that once the AO has formed his opinion, the Pr. CIT could not have examined the same issue. He submitted that the assessee had computed capital gains as per section 50C of the Act and, therefore, there is no room left for Pr. CIT to examine the issue. He further submitted that the AO had examined legal expenses and accepted the claims made by the Assessee and the AO has clearly mentioned in the order that the AO submitted evidences/entries for the expenditure claimed, which has been accepted while computing assessed income of the assessee. The very same issue has again been raised by the Pr. CIT, which is not required to be examined again. In support of his arguments, he relied on many judgments, which are placed in the written synopsis filed by the assessee. 7. The ld. DR, on the other hand, relied on the order of Pr. CIT and submitted that the assessee has wrongly shown the value of the property at ₹ 9,44,88, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue as sale consideration as per section 50C of the Act. In AY 2012-13, the assessee computed LTCG by adopting market value of ₹ 9,44,98,000/- and the assessee being 1/4th share beneficiary of ₹ 2,09,62,515/-, claimed deduction u/s 54F of ₹ 1,83,54,514/- against the investment in residential house and the amount of ₹ 26,08,201/- was offered as capital gain. But, later on, Pr. CIT verified from the record of the office of SRO and found that the market value of the above said property of ₹ 9,75,22,000/- and not ₹ 9,44,98,000/-, as adopted by the assessee. The 1/4th share of the assessee, which was sought to be admitted by the assessee at ₹ 7,56,000/- and before the Pr. CIT, the assessee admitted that there was a short of income of ₹ 7,56,000/- for the AY 2009-10. Further, on going through the latest amendments made by the Finance Act, in section 50(C)(1), 3rd proviso, where the value adopted or assessed or assessable by the same valuation authority does not exceed 10% of the consideration received or accruing as a result of transfer of consideration so received or accruing as a result of the transfer shall for the purpose of section 48 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 83-84? The facts giving rise to these questions may be noticed here. The case relates to the assessment year 1983-84 for which the accounting period of the appellant ended on February 28, 1983. The appellant is a public limited company. It entered into an agreement for sale of the estate of rubber plantation measuring acres 699 of land for consideration of ₹ 210 lakhs with M/s. Supriya Enterprises (for short the purchaser) on July 18, 1982. The Agreement provided, inter alia, for payment of the consideration in instalments as scheduled therein. However, the purchaser could not adhere to the schedule and on his request the parties agreed to extension of time for payment of the instalments on condition of his paying compensation/damages for loss of agricultural income and other liabilities in a sum of ₹ 3,66,649. Accordingly, the appellant passed a resolution also to that effect on September 25, 1983 and the purchaser paid the said amount. In the annexure to the return filed by it for the assessment in question the amount was noted as compensation and damages for loss of agricultural income. By Order dated October 31, 1985, the Income-tax Officer accepted the same an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejudicial to revenue - (1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous insofar as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation - x x x A bare reading of this provision makes it clear that the prerequisite to exercise of jurisdiction by the Commissioner suo moto under it, is that the order of the Income-tax Officer is erroneous insofar as it is prejudicial to the interests of the revenue. The Commissioner has to be satisfied of twin conditions, namely, (i). the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the revenue. If one of them is absent -- if the order of the Income-tax Officer is erroneous but is not prejudicial to the revenue or if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer. Every loss of revenue as a consequence of an order of Assessing Officer cannot be treated as prejudicial to the interests of the revenue, for example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the Income-tax Officer is unsustainable in law. It has been held by this Court that where a sum not earned by a person is assessed as income in his hands on his so offering, the order passed by the Assessing Officer accepting the same as such will be erroneous and prejudicial to the interests of the revenue. Rampyari Devi Saraogi Vs. Commissioner of Income-tax [67 ITR 84] and in Smt. Tara Devi Aggarwal Vs. Commissioner of Income-tax, West Bengal [88 ITR 323]. In the instant case, the Commissioner noted that the Income-tax Officer passed the order of nil assessment without application of mind. Indeed, the High Court recorded the finding that the Income-tax Officer failed to apply his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the Income-tax Officer is unsustainable in law. Therefore, in the case under consideration, the view which has been taken by the AO is one of the courses permissible in law, which cannot be brushed aside by the Pr. CIT u/s 263 of the Act. In view of the above observations, we set aside the order of the Pr. CIT passed u/s 263 of the Act, and restore the order of the AO. Accordingly, the grounds raised by the assessee on this issue are allowed. 10. In the result, appeal of the assessee is allowed in above terms. 11. We lastly acknowledge that although the instant appeals, except for the AY 2014-15, are being decided after a period of 90 days from the date of hearing as per Rule 34(5) of the IT(AT) Rules 1963, the same however, does not apply in the covid lockdown situation as per hon'ble apex court's recent directions dated 27-04-2021 in M.A.No.665/2021 in SM(W)C No.3/2020 'In Re Cognizance for extension of limitation' making it clear that in such cases where the limitation period (inclu ..... 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