TMI Blog2021 (10) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... nature. We fail to understand what kind of enquiries is needed in such cases when the relevant facts are available on record both before the A.O. as well as the PCIT and only warrants a relook at the same. Explanation-2 to section 263 of the Act does not give a uncontrolled unbridled power to the revisional Commissioner to reopen a completed assessment to conduct further enquiries to verify and find out whether order passed is in fact erroneous or not. The facts explained on behalf of the assessee gives an infallible impression that the course adopted by the assessee in treating the gains as capital gains chargeable under section 45 of the Act and endorsed by the A.O. to be plausible. The revisional power exercised in the facts of the case is plainly without authority of law. Consequently, the revisional order passed under section 263 is liable to be quashed and set aside. - Decided in favour of assessee. - ITA Nos. 34 & 33/RPR/2021 - - - Dated:- 29-9-2021 - Pradip Kumar Kedia, Member (A) And N.K. Choudhry, Member (J) For the Appellant : Amit Maloo Jain, C.A. For the Respondents : R.K. Singh, CIT, D.R. ORDER PER PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - NOTICE FOR THE HEARING M/s/Mr/Ms Subject: Notice for Hearing in respect of Revision proceedings u/s. 263 of the THE INCOME TAX ACT, 1961 - Assessment Year 2016-17. In this regard, a hearing in the matter is fixed on 16/03/2021 at 11:30 AM. You are requested to attend in person or through an authorized representative to submit your representation, if any along with supporting documents/information in support of the issues involved (as mentioned below). If you wish that the Revision proceeding be concluded on the basis of your written submissions/representations filed in this office, on or before the said due date, then your personal attendance is not required. You also have the option to file your submission from the e-filing portal using the link: incometaxindiaefiling.gov.in On examination of your Income Tax records for the above assessment year, I find that the order passed u/s. 143(3) r.w.s. 147 on 24.10.2018 of the Income tax Act, 1961 is erroneous in so far as it is prejudicial to the interest of revenue in the following manner:- The order in the aforesaid case is erroneous so far as prejudicial to the interest of revenue on the following ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the transaction is an adventure in the nature of trade. Audit examination revealed that the assessee had purchased the land within limit of Municipality of Raipur situated at Village Mova, admeasuring area 36000 Sq. Ft. with another co-owner Shri Arvind Sangoi on 26.03.2007. Further, it was observed that the said land was diverted for residential use by the competent authority on 16.01.2015. During the year under consideration the assessee and co-owner had sold the land 7983 Sq. ft. out of 36000 Sqft. For ₹ 1,18,74,959/- to the four person. The assessee had disclosed his share from sale of land of ₹ 5,93,74,780/- and worked out LTCG from sale of land for ₹ 11,78,210/- after deducting indexation coast of land and adjustment of long term capital loss of ₹ 27,49,277/- on sale of Page 2 of 4 AJGPS3531D-DILIP SANGOI A.Y. 2016-17 ITBA/REV/F/REV1/2020-21/1031409603(1) unlisted shares and securities. Since, the assessee acquired land with a view to selling it later resulting in profit and the activity can only be described as business venture. The assessee had calculated LTCG from sale of land ₹ 42,96,423/- and claimed indexation cost was not in order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pur. 5. In response to the show cause notice, the assessee filed a detailed reply dated 19.03.2021 seeking to demonstrate that the surplus arising on sale of land has been rightly characterised as capital gains and the A.O. made necessary enquiries in this regard while accepting the stand of the assessee. The PCIT, however, alleged that the A.O. has not conducted proper enquiry regarding genuineness of the contentions put forth by the assessee. The A.O. was accordingly directed to make adequate enquiries with regard to the nature of transaction in the light of provisions of section 2(13) of the Act and consequent set off of loss. The assessment order was accordingly set aside and remanded back to the file of the A.O. for fresh adjudication of the issue by invoking the revisional power under section 263 of the Act. 6. Aggrieved, the assessee preferred appeal before the Tribunal. The learned counsel for the assessee, at the outset, submitted that the impugned assessment order is neither erroneous nor prejudicial to the interest of the revenue. Several contentions were raised in this regard:- i) The PCIT has wrongly assumed that the land purchased by the assessee along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the relevant documents and facts concerning the transaction were available on record before the PCIT. The PCIT has not done anything except directing the A.O. to recommence some un-spelled and so-called proper enquiry on the issue. The PCIT himself could have examined the issue if he so desired which depended on mere logical appreciation of facts which were duly available before him. vi) The PCIT is precluded from directing more enquiries without showing the nature of enquiries required to be conducted and without carrying out some minimum enquiries himself. The PCIT has only issued a single notice dated 19.03.2021 and passed the revisional order hurriedly dated 23.07.2021 without making any enquiry expected of him in this regard and after placing reliance on incorrect basic facts. In the light of submissions made, it was urged that the revisional order of the PCIT be set aside and the Assessment Order passed under section 143(3) of the Act be restored. 7. The learned Departmental Representative, on the other hand, relied upon the revisional order and contended that Explanation-2 to section 263 of the Act enables the PCIT to hold the order passed by the A.O. to be er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the A.O. as well as the PCIT and only warrants a relook at the same. 8.2. Explanation-2 to section 263 of the Act does not give a uncontrolled unbridled power to the revisional Commissioner to reopen a completed assessment to conduct further enquiries to verify and find out whether order passed is in fact erroneous or not. The facts explained on behalf of the assessee gives an infallible impression that the course adopted by the assessee in treating the gains as capital gains chargeable under section 145 of the Act and endorsed by the A.O. to be plausible. 8.3. The revisional power exercised in the facts of the case is plainly without authority of law. Consequently, the revisional order passed under section 263 is liable to be quashed and set aside. In the result, appeal of the assessee is allowed. ITA No. 33/RPR/2021 - A.Y. 2016-17 - Shri Arvind Sangoi 9. The assessee herein is other co-owner of the same land parcel, the character of gain arising on sale therefrom is in dispute. The configuration of facts being replica to the other co-owner (Dilip Sangoi - ITA No. 34/RPR/2021) supra, the conclusion drawn therein shall apply mutatis mutandis to the instant case a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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