TMI Blog2022 (1) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... n one of the possible view that transactions are in order. Various courts have held that in order to invoke provisions of section 263 of the Act twin conditions has to be fulfilled i.e., not only erroneous but also has to be prejudicial to the interest of the Revenue. In the given case Ld. Pr.CIT has never found/quantified the prejudicial to the interest of the Revenue. In our considered view, he cannot invoke the provisions of section 263(1) when the Assessing Officer has made the enquiry and formed an opinion. The facts on record indicate that the issue involved are similar to the facts in the previous assessment year and also in the case of other family members. Ld. Pr.CIT has not brought nothing on record to show that Assessing Officer actually has passed the order without making any enquiry or verification. As found from the record that Assessing Officer has verified the transactions in the present assessment year as well as in the previous assessment year i.e. A.Y.2015-16. He reached the conclusion based on the verification he carried on in the previous assessment year and case of the other family members. Therefore Pr.CIT cannot invoke provisions of section 263 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a return of income on 17.10.2016 declaring Total Income at ₹ 13,61,55,860/comprising of business income, capital gains and other sources. The total income was computed as per the provisions of the Income Tax Act. In computing the capital gains the cost of the shares transferred and the full value of consideration was correctly disclosed by the assessee. b. The gains were computed as per the provisions of S.45 to 55 including S. 54EC and rules and there are no errors in such computation found either by the AO or by your honour in the notice. c. Kindly note that the calculation of capital gains under consideration was made as per the regular provisions of the Act. For removal of doubts, the facts in brief and the basis thereof is explained hereunder, i. The assessee purchased 960 shares of Anant Developers Pvt. Ltd. for a total consideration of ₹ 12,96,00,000/-. ii. The payment against the said purchase of shares was made through banking channel. iii. The said shares were lying in the Demat of the assessee for the whole period in which it was held by the assessee. iv. The indexed cost of such shares for the assessment year 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by the AO. iii. The term Full Value of Consideration is neither the market value not any other value in the context of the shares. It is the full value consideration in my case represents the price that was bargained for by me with the purchaser of shares. Adequacy or otherwise of the price cannot be questioned unless there are material facts to indicate that | had received something more than the agreement value which had remained to be accounted and taxed. There is no material on records what so ever to even suggest the receipt of such consideration. iv. May I in this context respectfully invite the attention to the established position in law on the subject of full value of consideration; v. The SC in the case of George Henderson and Co. Ltd., 66 ITR 622 held as under; The expression full value of the consideration cannot be construed as the market value but as price bargained for by the parties to the sale. vi. The same SC again reiterated the position in the case of Gillanders Arbuthnot Co., 87 ITR 407 confirming that in the case of sales, all that one has to see is what is the consideration bargained for. vii. Once again th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccruing as a result of such transfer. ii. These provisions do not apply to the Assessment Year under consideration. S. 50CA has introduced a deeming fiction for the 1st time for substituting the rule value for the agreement value in determining the full value of consideration u/s. 48 in computing the capital gains. The said provision is made effective from 01.4.2018 and was brought in specifically for adoption of a rule value where such value was higher than the agreed value. iii. I therefore submit that up to A.Y. 2017-18 the law did not permit any Substitution and permitted no option but to adopt the agreed value as the full value consideration till such time. In fact S. 50CA has been inserted specifically to provide for such substitution as is clarified by The notes to clauses, 391 ITR 113 (st.), and The Memorandum explaining the provisions of the Finance Bill, 391 ITR 165 (st.) g. It is respectfully submitted without prejudice to the fact that in the assessee s Case the view adopted was the only possible view and no other view was Possible, that even where different view was possible and the AO has adopted the one which also was possible, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SC), Bismillah Trading Co. v. Intelligence Officer [2001] 248 ITR 292 (Ker.), Venkatakrishna Rice Co. v. CIT [1987] 163 ITR 129 (Mad.) and CIT v. Pushpa Devi [1987] 164 ITR 639 (Pat.) and accordingly, he set aside the order passed u/s. 143(3) of the Act and directed the Assessing Officer to pass afresh Assessment Order considering the issues raised in the notice issued u/s. 263 of the Act and directed to give proper opportunity of being heard to the assessee in accordance with law. 5. Aggrieved with the above order, assessee is in appeal before us raising following grounds in its appeal: - 1. INVALID REVISION U/s. 263 a. The Ld. PCIT erred in law and facts of the case in initiating revisionary proceedings u/s. 263 and thereafter in passing an order u/s 263 dt. 26.03.2021 ignoring that; i. the order passed by the Ld. A.0. u/s 143(3) dt. 11.04.2018 was neither erroneous nor prejudicial to the interest of the revenue in as much as the Ld. A.O. had adopted the view in Law which was the only possible view permissible on due application of mind after making proper inquiries to his satisfaction before passing the assessment order and the ld. PCIT further erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PCIT erred in law and on facts in completing the revisionary proceedings in a complete haste and without giving sufficient time and opportunity and erred in law in ignoring all the evidences and proofs and documents available on records and further erred in treating the order passed by AO as erroneous and prejudicial to the interest of the revenue and setting aside the same without bringing any material of whatsoever nature on record. b. Your appellant submits that proper procedure as required by law was not followed before passing of order u/s 263. c. Your appellant pleads that an assessment made in violation of the provisions of natural justice be quashed. 3. COMPUTATION OF CAPITAL GAINS AS PER LAW a. Without prejudice the Ld. PCIT erred in law and on facts in setting aside the assessment order by not appreciating that your appellant on merits had computed capital gains on transfer of shares which was as per the provisions of law and was also allowable on merits of the case. b. Your appellant submits that Long Term Capital Gains on sale of shares was computed in accordance with the provisions of s. 45 r.w.s. 48 was eligible for claim as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submission with Annexures - letter dt. 14.08.17 189-190 [32] 4th submission with Annexures - letter dt. 17.11.17 191 [33] Notice u/s. 143(2) dt. 26.07.2016 192-193 [34] Notice u/s. 142(1) dt. 10.02.2017 194-195 [35] Notice u/s. 142(1) dt. 25.07.2017 196-197 [36] Notice u/s. 142(l)di. 14.11.2017 198-199 [37] Computation of income 200-202 [38] Assessment order u/s. 143(3) dt. 20.12.17 203-207 NITINVADOR-A.Y.: 2015-16 [39] 2nd submission with Annexures - letter dt. 14.08.17 208-209 [40] 3rd submission with Annexures - letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [59] Computation of income 268-271 [60] Assessment order u/s. 143(3) dt. 22.12.17 272 - 276 7. Ld. AR submitted that above evidences are essential for the purpose of disposal of the current appeal. These are the details submitted by the assessee as well as relatives of the assessee before the respective Assessing Officers for completion the Assessment Order for A.Y. 2015-16. Considered the submissions and after considering the details submitted by the assessee we admit the additional evidences which are submissions and Assessment Orders relating to A.Y. 2015-16. 8. At the time of hearing Ld. AR submitted that Ld. Pr.CIT set-aside the Assessment Order passed u/s. 143(3) of the Act for the A.Y. 2016-17 and he submitted that the facts are exactly similar to the A.Y. 2015-16. He submitted that section 50CA of the Act was introduced in the Act which are applicable from A.Y. 2018-19. Further, he submitted that the assessee has sold the shares of same company in A.Y. 2015-16 and current assessment year also. The assessment was reopened with a limited purpose s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record, we observed that assessee has sold the total shares of 1910 shares of Anant Developers Pvt. Ltd., and sold shares which were subscribed by the assessee in A.Y. 2003-04, out of which assessee has sold 950 shares in A.Y. 2015-16 and declared the same in his return of income. Subsequently sold 960 shares in A.Y. 2016-17 i.e. impugned year. Assessee has declared the capital gain in his return of income as per the sale consideration after adjusting indexed cost of acquisition. Assessee also claimed deduction u/s. 54EC of the Act by depositing ₹.50 lacks as per the provisions of section u/s. 54EC of the Act. We noticed from the record that the case of the assessee is selected for scrutiny for limited purpose in order to verify only the transactions relating to long term capital gain and accordingly, Assessing Officer issued notices and questionnaire to collect information from the assessee and from the record we noticed that assessee has submitted all the relevant information relating to long term capital gain and has submitted that same transactions were carried in A.Y.2015-16. The Assessing Officer has verified the same and allowed the claim of the assessee. We observ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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