TaxTMI 
TaxTMI 
TaxTMI 
2014 (9) TMI 195
X X X X Extracts X X X X
X X X X Extracts X X X X
.... admitted in its show cause notice at para 2 that all the details was available before Assessing officer on 7.12.2011. 2.2 The Commissioner of Income Tax ought to 'have appreciated that if the assessing officer has taken one of the two possible views it cannot be termed as erroneous and prejudicial to the interest of revenue. [Malabar Industrial Co. (vs) CIT 243 ITR 83 (SC)]. 3. The Commissioner of Income Tax erred in holding that the amount of Rs. 1407.30 crores towards upfront lease rent received by the appellant and paid to Government account as sale consideration cannot be treated as being expenses u/s 37 since it is a capital expenditure. Such asset has to appear in the balance sheet of the appellant and the proportionate lease income should have been brought to tax and remitted the matter back to the file of assessing officer to redo the assessment as per law. 3.1 The Commissioner of Income tax ought to have appreciated that the lands under consideration were given by the Government of Tamilnadu to the appellant in order to develop a special economic Zone for information Technology enabled services along with int....
X X X X Extracts X X X X
X X X X Extracts X X X X
....RIL Infopark Ltd. The Assessing Officer completed the assessment under section 143(3) of the Act accepting the income returned by the assesse. Therefore, assessment order passed by the Assessing Officer under section 143(3) of the Act is neither erroneous nor prejudicial to the interests of the Revenue. Counsel for the assessee referring to page 3 of the paper book filed before us submits that transaction details between the assessee and M/s. TRIL Infopark Ltd. with reference to lease agreements were placed before the Assessing Officer. The counsel submits that Assessing Officer has arrived at one of the possible views and therefore Commissioner of Income Tax is not justified in invoking the provisions of section 263 of the Act. 4. Departmental Representative vehemently supports the order of the Commissioner of Income Tax in revising the order passed under section 143(3) of the Act. Departmental Representative submits that Assessing Officer has not formed any opinion as he has not gone into the details of transactions between the assessee and M/s. TRIL Infopark Ltd. and in the absence of any enquiry whatsoever in this regard, the order passed by the Assessing Officer under section....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Lr.No.ACD/A1/1T/A.Y.2009-10 dated 07/1212011. 3. Therefore, on the above issues the assessment completed u/s 143(3) is proposed to be revised and you are requested to show cause why the assessment u/s.143 (3) dt. 30.12.2011 of the Act should not be treated as erroneous and prejudicial to the interest of revenue and revised u/s 263. In this connection, you are requested to appear before the undersigned on 25.11.2013 at 3.00 p.m. at my office in the above mentioned address either in person or through a duly Authorized Representative along with the written submissions, if any, in the above matter and on failure to do so, it will be presumed that you have no objection to the proposal for revision and proceedings finalized." 6. The assessee filed reply dated 22.11.2013 stating that assessment order cannot be reopened when there is no jurisdictional error in the order. The order of the Assessing Officer cannot be also revised if it has been passed after application of mind and merely because of the opinion of the Commissioner of Income Tax is different from that of the Assessing Officer provisions of section 263 cannot be invoked. It was the contention that all the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... also prejudicial to the revenue. The Commissioner was/ therefore right in exercising his power of revision under section 263 and directing the Assessing Officer to examine that aspect thoroughly and in accordance with law. b) In the case of Indian textiles Vs Commissioner of Incometax, (1986)157 ITR 112(MAD.), the Madras High Court held as under: "The ITO gave relief to the assessee in respect of certain matters which according to the Commissioner. was not justified. Once that finding was reached by the Commissioner; the revisional jurisdiction under Section 263 could validly invoked by the Commissioner ........" c) In the case of CIT Vs Kohinoor Tobacco Products P ltd (234 ITR 557) the Madhya Pradesh High Court has held as under: " ........... This failure on the part of the Assessing Officer to make necessary enquiry rendered the assessment erroneous and also prejudicial to the interests of the Revenue ..... 11 d) The Allahabad High Court decision in the case of Swarup Vegetable Products Industries Ltd. (187 ITR 412) wherein it was o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erm Capital Gains in the hands of TIDCO and this treatment would not make any difference and there would be no loss of revenue" 3.4.1. The assessee's above objection is not acceptable as there is no question of treating the above transaction as short term capital gains by the following reasons: a) It is stated in para No:3 of Go(s) No 28 dated 11/03/2010 as "The Government also directed TIDCO for collecting the upfront lease rent of Rs. 1326.42 crores for 25.27 Acres of land at the rate of Rs. 12,0501- per Square feet from the Joint Venture partner and pay the land value to the Government at the rate of Rs. 12,000/- per Sq.ft. TIDCO is supposed to retain Rs. 501- per s.ft i.e.Rs.5.504 crores". Accordingly, TIDCO has paid Rs. 1407.30 Crores(1320.95 crores plus 12% escalation charges of RS.86.95 crores converted as loan) to the Govt of Tamilnadu. On payment of the entire land value to the Govt, M/s.TIDCO being a separate entity became the absolute owner of the land. b) On a careful reading of various GOs and Revised lease deed dated 3/02/2009 it is found that the above land....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rvative way, the proportionate lease amount for the Financial year 2008-09 is Rs. 3.55 crores and Rs. 14.27 crores from the Financial year 2009-10 as detailed below: Total lease amount for 99 years (A) RS.1412.80 crores Lease amount for one year (A) 199 =8 RS.14.27 crores Lease amount for 2008-09 From 13/08/2008 to 31/03/2009 (B/366) X 232 RS.9.05 crores Amount admitted by the assessee as Service charges in F.Y. 2008-09 RS.5.5 crores Balance lease amount escaped assessment in F.Y. 2008-09 (AY 2009-10) Rs. 3.55 crores It has been held by the Apex Court in the case of CIT Vs Malabar Industrial Co. Ltd, that if due to an erroneous order of the ITO, revenue is losing tax lawfully payable by persons, it will be certainly prejudicial to the interest of revenue. The assessing officer failed to examine the reasons why the property leased out to M/S.TRIL info park Pvt Ltd has not appeared in the balance sheet and how the value of the land paid to the Govt has claimed as expenditure being capital in nature. In view of the above reasons, it is conclusive that the order dated 30/12/2011 is erroneous and prejudicial to the interest of revenue." 7. On a perusal of ....