Revenue classification: agricultural land treated as capital asset under s.2(14)(iii)(b); consideration fixed at Rs.1,00,44,000; s.54F exemption allow...
The ITAT allowed the revision challenge and set aside the exercise of power under section 263, holding that the AO's original treatment of the payments as taxable under section 194I was not erroneous when made, the issue being debatable and pending adjudication before the first appellate authority. The PCIT's subsequent cancellation of the assessment by invoking section 194C (with a lower withholding rate) was sustained as correctly treating EDC payments to the statutory authority as contract payments, but the PCIT erred in initiating revision while the matter remained before the CIT(A). There was no material prejudice to Revenue; matter ultimately decided in favour of the assessee.
The ITAT allowed the revision challenge and set aside the exercise of power under section 263, holding that the AO's original treatment of the payments as taxable under section 194I was not erroneous when made, the issue being debatable and pending adjudication before the first appellate authority. The PCIT's subsequent cancellation of the assessment by invoking section 194C (with a lower withholding rate) was sustained as correctly treating EDC payments to the statutory authority as contract payments, but the PCIT erred in initiating revision while the matter remained before the CIT(A). There was no material prejudice to Revenue; matter ultimately decided in favour of the assessee.
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