TMI Blog2022 (3) TMI 1024X X X X Extracts X X X X X X X X Extracts X X X X ..... he part of Ld. AO. As out of 42 plots allotted by Bhopal Development Authority, the assessee sold a few plots in the immediately preceding assessment-year 2014-15 and declared the profit arising therefrom as long-term capital gain, which stand accepted by Ld. AO and also not disturbed by Ld. PCIT in revision-proceedings of that year. As the assessee has sold 11 plots during the assessment-year 2015-16 under consideration out of the very same bunch of 42 plots, the nature of income being long-term capital gain as accepted by revenue in the assessment-year 2014-15 must be accepted in the assessment-year 2015-16 under consideration too. We are of the considered view that the Ld. PCIT was not justified in invoking section 263 to the present matter of assessee. - Decided in favour of assessee. - ITA No. 248/Ind/2021 - - - Dated:- 9-3-2022 - Ms. Suchitra R. Kamble, Judicial Member And Shri Bhagirath Mal Biyani, Accountant Member For the Assessee : Shri S.S. Deshpandey, AR For the Revenue : Shri P.K. Mitra, CIT-DR ORDER PER BHAGIRATH MAL BIYANI, A.M: This appeal by assessee is directed against the revision-order dated 25.03.2021 passed by Ld. PCIT-1, Bh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d return on 17.08.2016 at a total income of ₹ 3,76,76,850/-. The case of assessee was selected under scrutiny through CASS and statutory notices u/s 143(2) and 142(1) were issued from time to time. In response thereto, the assessee attended hearings from time to time and submitted written submissions. Finally, the Ld. DCIT-4(1), Bhopal [ Ld. AO for short] completed assessment u/s 143(3) vide order dated 29.09.2017 at a total income of ₹ 3,76,76,850/-. 5. Subsequently, the Ld. PCIT invoked the provisions of section 263 of the Act by issuing notice dated 16.03.2021, the relevant extract of which is reproduced below: Notice u/s 263 of Income-tax Act for AY 2015-16 Show Cause reg. Please refer to the assessment order u/s 143(3) of the Income Tax Act, 1961 dated 29.09.2017 passed by DCIT-4(1) Bhopal for A.Y. 2015-16. On perusal of the assessment order and case records, it has been observed that the assessee had owned land admeasuring areas 10.41 acre which was acquired by the Bhopal Development Authority during the F.Y. 2009-10. The Bhopal Development Authority has transferred 42 developed plots to the assessee admeasuring area 1,30,767 sq. feet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion of the Principal Commissioner or Commissioner - (a) The order is passed without making inquiries or verification which should have been made; (b) The order is passed allowing any relief without inquiring into the claim; (c) . (d) 5. For the above reasons I am satisfied that this is a fit case where action u/s 263 is justified and inescapable. This view of mine further gains strength and support by the ratio of the decisions in the case laws mentioned here below: 1. Ram Pyari Devi Saraogi vs. CIT (1968) 67 ITR 84 (SC) - the Hon'ble Supreme court has held that assessment made in undue haste and without making inquiries which are called for the circumstances of the case in erroneous and prejudicial to the interest of revenue. 2. Malabar Industrial Co. Ltd. vs. CIT (2000) 243 ITR 83 (SC) - Hon'ble Supreme court has held that non-application of mind by the assessing authority on a particular issue, renders the assessment order susceptible to revision. 3. CIT v. Bhagwan Das (2005) 272 ITR 367 (All.) (HC) the Hon'ble High Court has held that non-application of mind by the Assessing Officer was prejudicial to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord. 4. The perusal of the submission of the assessee, it was noticed that in original recturn of income, the assessee offered income of ₹ 2,71,32,716/- on account of Long Term Capital Gain. Subsequently the return was revised on 17.08.2016 declaring income of ₹ 3,73,33,850/- from Long Term Capital Gain. After perusal of revised calculation of Long Term Capital Gain, copies of sale and purchase deeds and bank account, revised return of income filed by the assessee is accepted. The Ld. A/R submitted that Para No. 2 of assessment-order makes it very clear that the Authorised Representative of assessee attended hearings from time to time and filed written submissions and the Ld. AO considered those submissions. Thereafter Para No. 3 clearly states that the assesee is a timber merchant. It further states that the assessee has furnished not only the copy of income-tax return, computation of income, copy of capital account, P L A/c, Balance-Sheet, etc. but also filed copies of purchase deeds and sale-deeds of plots. Thereafter Para No. 4 clearly demonstrates that the Ld. AO has perused those documents. The last sentence of this para clearly states After perusa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, out of which the assessee sold a few plots during the financial year 2013-14 relevant to assessment-year 2014-15. The Ld. A/R referred to the copy of assessment-order dated 31.12.2019 for the assessment-year 2014-15 placed at Page No. 27-29 of the Paper Book and submitted that the assessment of that year was also completed as a scrutiny-assessment u/s 143(3) of the Act and the profit on plots sold in that year was also assessed by Ld. AO as long-term capital gain. The Ld. A/R further submitted that even the assessment-order of that year was also examined by the Ld. PCIT u/s 263 of the Act and the revision-order was passed on 14.01.2019, a copy of which is placed on Page No. 30 of the Paper-Book. The Ld. AR submitted that while passing revision-order, the Ld. PCIT has not raised any objection against the long-term capital gain assessed by Ld. AO, though he had objected to the deduction of brokerage expenditure claimed by the assessee u/s 48 and set aside the assessment-order with a direction to Ld. AO to examine the claim of brokerage expenditure. According to Ld. A/R, this clearly goes to show that the Ld. PCIT has accepted the profit on sale of plots as long-term capital gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f capital gain but also the purchase and sale deeds. The Ld. AO has clearly mentioned in the assessment-order that he has perused those submissions and documents and thereafter accepted the long-term capital gain declared by the assessee. We also observe that during assessment proceedings, hearings were conducted from time to time and attended by the assessee and the assessment-order has not been passed in haste. It is true that in Para No. 4 of assessment-order, it would have been better if the Ld. AO had made an elaborate discussion which he did not make, but still the assessment-order clearly transpires that the Ld. AO has perused the working of capital gain as well as the evidences of capital gain in the form of purchase and sale deeds and it is thereafter that he accepted the long-term capital gain. Thus, there is no lack of enquiry on the part of Ld. AO. We observe that the opening language of Explanation 2 to section 263(1) uses the words in the opinion of , as claimed by Ld. DR, but it is equally true that such opinion must be well-founded and not illusory. Further we cannot stop to this opening language of Explanation 2, we have to step further to Clause (a) which require ..... X X X X Extracts X X X X X X X X Extracts X X X X
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