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TMI Blog2023 (6) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the captioned assessment year and had computed Long Term Capital Gain and had also paid Long Term Capital Gain Tax, but, the impugned property had been sold in piecemeal, in 14 transactions. The ld. PCIT was of the view that this indicated that the assessee was in the business of buying and selling land/properties. The ld. PCIT also noted that even in the Assessment Years 2015-16 and 2016-17, the assessee had declared Capital Gain and in view of repetitive transactions of the same nature, the properties held by the assessee were stock-in-trade and not capital asset and, therefore, benefit of indexation was not to be made available to the assessee. The assessee was required to show cause as to why the assessment framed was not erroneous inasmuch as being prejudicial to the interest of the Revenue. 3.2. In response to the show cause notice, it was the assessee's submission before the ld. PCIT that the assessee was not conducting any regular business in buying and selling of immovable property and further the Assessing Officer had duly verified the issue during the course of assessment proceedings and, therefore, revisionary proceedings were not required. 3.3. This content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e query and the assessee had duly replied to the same and, therefore, invocation of revisionary jurisdiction by the ld. PCIT was legally incorrect and the impugned order was liable to be quashed. The ld. AR further submitted that it was only after the examination of the various documents, sale deeds etc. filed by the assessee the Assessing Officer had a formed an opinion that the income declared by the assessee was taxable under the head Long Term Capital Gain. 5.1. It was submitted that it was one of the plausible views taken by the Assessing Officer and that the ld. PCIT had no power to overturn the view taken by the ld. Assessing Officer. It was submitted by the ld. Authorized Representative that whether an income was taxable as business income or as Capital Gain was a matter of subjective opinion having regard to the facts of the given case and provisions of Section 263 of the Act did not empower the ld. PCIT to invoke his revisional powers to substitute his opinion on a debatable issue without showing as to how the Assessing Officer had committed an error in adopting one of the plausible views. 5.2. Reliance was placed on the order of the Raipur Bench of ITAT in the cases of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty of the land i.e. when it was purchased and when it was sold. In both the years, it continued to be in the nature of agricultural land. On such facts, we are not in a position to concur with the observations of the ld. PCIT that the assessee was in the business of buying and selling of property. It appears that the ld. PCIT has been influenced by the fact that one piece of land was sold through 14 transactions. However, in our considered view, on the facts and circumstances of the case, the ld. PCIT was not justified in invoking his revisionary power to hold that the Assessing Officer should have treated the income as income from business of buying and selling of property. 7.1. At this juncture, reference may be drawn to the judgment of the Hon'ble Punjab and Haryana High Court in the case of Kaur Singh vs. CIT reported in 144 ITR 756 (1983) (P&H) wherein the Hon'ble Jurisdictional High Court, on a similar set of facts, had held as under: "11. Keeping in view the principles enunciated by the Supreme Court, we shall now independently examine whether on the facts found by the Tribunal, the sale was an adventure in the nature of trade. A bare analysis of the facts foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso on appreciation of material on record came to the conclusion that it was not business income but it resulted in Long Term Capital gains. The relevant findings noticed read thus:- "21. In the totality of the above said facts and circumstances and the evidence perused by us, the nature of land being agricultural land stands established: a) as the said land was part of notified forest area where admittedly no other activities except agricultural, if allowed. could be carried out; b) Girdawari of the landholdings of the assessee proves the stand of the assessee that it was agricultural land and also the notification issued for the urban usage/non-agricultural activities certifies that prior to its notification the said land was used for agricultural purposes. The land being registered in Land Revenue Records as Agricultural land, then there is no basis for holding the said land and as not agricultural land. We find support from the ratio laid down by the Chandigarh Bench of the Tribunal in DCIT v. A.P. Paper Mills Limited (supra). Accordingly, we hold that the nature of the land sold by the assessee as on the date of its sale was agricultural land, which was acquired by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was an adventure in the nature of trade. No error could be pointed out in the findings recorded by the CIT(A) and upheld by the Tribunal warranting interference by this Court." 7.3. In the instant case also, the impugned land has been recorded in the Revenue records as agricultural land. This fact is not in dispute. Just because the assessee had sold the land in piecemeal after entering into numerous transactions, it cannot be concluded that such transactions were in the nature of business and selling of immovable property. It is not in dispute that the assessee had duly filed the copies of the sale deed before the Assessing Officer and, therefore, it is a logical assumption that the Assessing Officer had duly examined these sale deeds before accepting the returned income of the assessee. Whether to accept the transactions as being taxable under the Long Term Capital Gain or to reject them and tax them under the head income from business would have been duly considered by the Assessing Officer at the time of assessment proceedings and the conclusion arrived at by the Assessing Officer was definitely one of the plausible views and, therefore, it cannot be said that the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enquiries is needed in such cases when the relevant facts are available on record both before the A.Q, 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." 7.5. Therefore, on an overall view of the facts and circumstances of the case and in view of the judicial precedents referred to by us in the preceding paragraphs, we are unable to concur with the view taken by the ld. PCIT and we quash the impugned order which has been passed u/s. 263 of the Act. 8. In the final result, appeal of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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