2014 (6) TMI 470

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....7 of the Act. Grounds of the Revenue on this aspect read as follows- "1. The order of the CIT(A) is erroneous in law and on facts of the case. 2. The learned CIT(A) erred in holding that the Assessing Officer had no reason to believe that there was any escapement of income to initiate proceedings under S.147 of the I.T. Act 1961. 3. The learned CIT(A) erred in holding that the sum of RS.20 lakhs received on extinguishment of rights be charged as long term capital gains and in allowing deduction under S.54EC. 4. ....." 4. We heard both sides and perused the orders of the Revenue authorities and other material available on record. We find that the assessment originally completed under S.143(3) of the Income-tax Act, on 18.12.20....

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....at compensation was received for relinquishing the right of the assessee, which should be taxable as capital gains. The Assessing Officer did not accept the audit objection and requested the audit party to drop the objection. As the audit objection was not dropped, proceedings under S.147 were initiated, after obtaining approval from the competent authority. Thereafter, the orders under S.143(3) read with S.147 dated 31.10.2012 were passed, making the addition of Rs.20 lakhs under the head 'income from other sources, thereby denying the assessee, the benefit under S.54EC. 6. As rightly held by the CIT(A), with respect to the issue of validity of the proceedings under S.147, the Assessing Officer has accepted the income returned under S.1....