TMI Blog2017 (4) TMI 1604X X X X Extracts X X X X X X X X Extracts X X X X ..... by the CIT u/s 263 of the IT Act, 1961. Appeal of the assessee in the proceedings u/s 263 of the IT Act is dismissed. - ITA Nos. 596(Bang)/2013 & 42(Bang) 2015 - - - Dated:- 21-4-2017 - SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER For the Assessee : Shri G. S. Sitaraman, CA For the Revenue : Shri G.R.Reddy, CIT DR-I ORDER PER SHRI A.K. GARODIA, AM Out of this bunch of two appeals, which are filed by the assesee for the same assessment year, it is seen that one appeal is directed against the order passed by the ld. CIT, Bangalore-IV, Bangalore dated 05-03-2013 passed by him u/s 263 of the IT Act, 1961 and the remaining appeal is directed against the order of the ld. CIT(A)-V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... juncture, the Bench wanted to know as to whether any query was raised by the AO on this aspect of the matter as to whether this income is assessable under the head Income from capital gains or income from business . In reply, it was submitted by the ld. AR of the assessee that no such specific query was raised by the AO but he examined the claim of the assessee regarding the LTCG declared by the assessee in the return of income and therefore, a view has been formed by the AO which is a possible view and therefore, the ld. CIT cannot replace his own view in place of the view of the AO by exercising his powers u/s 263 of the IT Act, 1961. In support of this contention, he placed reliance on the following judicial pronouncements; 1) CIT V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Devi Saraogi Vs CIT 67 ITR 84(SC) b) CIT Vs Infosys Technologies Ltd. 341 ITR 293(Kar.) c) Swarup Vegetable Products Vs CIT 187 ITR 412(Alld.) d) Malabar Industrial Co. Ltd. Vs CIT 243 ITR 83 (SC) 6. We have considered the rival submissions. We find that there is no dispute on this aspect that the property in question was always shown by the assessee in the previous years as stock-in trade and this is not the case of the assessee that at any point of time before the sale of such stock in trade, it was converted into capital asset because if that is the case then it has to be shown then on the date of such conversion, profit earned by the assessee till the date of conversion being the market value of property on that date and cos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sheet as on 31-03-2006 available on page-25 of the paper book, the value of land under heading inventories is shown at Rs.2,69,63,010/- which means that there is addition of Rs.5,32,760/- in the value of land during financial year ending on 31-03-2006. Hence, it is seen that this contention is not factually correct that no expenses was incurred by the assessee in respect of land acquired during the financial year 2004-05. This contention being factually incorrect, no discussion is called for in respect of various judgments cited by ld.AR of the assessee in support of this contention that when no expense were incurred in respect of land, it cannot be considered as stock-in trade and it should be accepted as capital asset. 7. Now, we exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has to be assessed as profits and gains from business and profession and therefore, in view of conclusive finding of CIT in the order passed by him u/s 263 of the Act, this appeal of the assessee is not admissible and not maintainable. Thereafter, he submitted that in the order passed by ld. CIT u/s 263 of the Act, he has not decided the issue regarding taxability of this income under the head income from business and profession . He has set aside the assessment to the AO for re-doing the same and therefore, the issue on merit has to be decided by the ld. CIT(A) and since this has not been done by the ld. CIT(A), the matter has to be restored back to his file for decision on merit. 10. The ld. DR of the revenue supported the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to this direction, the ld. CIT has given some other directions also that the AO should verify the veracity of compensation claimed to have been paid to Shri Sanjay Godhath. Hence, the facts being different, this judgment of the Hon ble Madras High Court followed by the ld.CIT (A) is not applicable in the present case in our humble opinion. We therefore, set aside the order of the ld. CIT(A) and restore the matter back to his file for a decision on merit after affording adequate opportunity of being heard to both sides. 13. In the result, the appeal of the assessee in ITA No.596(B)/2013 is dismissed and the second appeal of the assessee in ITA No.42(B0/2015 is allowed for statistical purposes. Order pronounced in the open court on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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