TaxTMI 
TaxTMI 
TaxTMI 
2014 (11) TMI 343
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....iled in response to the notice u/s. 153C of the Act. Assessment order was passed on 30.12.2011 by determining total income at Rs. 29,28,267. 3. The assessee had admitted agricultural income of Rs. 32,85,870 after claiming expenditure on account of selling paddy produced from his ancestral lands which had been stacked for the last three years. The paddy was stacked in the godown at his residence in Kakanur village. The paddy was sold out between September, 2008 and March, 2009. The assessee during the course of search operations had stated that he having agricultural income from his ancestral property and during the course of scrutiny proceedings filed documentary evidence from the Agricultural Market Committee regarding cultivation of land....
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....e notice is as follows: "The assessee in the HUF status has filed his return of income for the A.Y. 2009-10 on 30-8-2010. In the Balance sheet filed along with the return of income the assessee has shown advance Rs. 13,00,000/- received on 30.03.2009 towards sale of rural agricultural land in S. No. 273/B admeasuring 5 acres situated at Kakunur Village. In the subsequent year return of income i.e. Asst. year 2010-11 the assessee has received balance sale consideration of Rs. 2,00,000/- The total advance of Rs. 15,00,000/- is admitted in the Balance Sheet filed with the return of income. As the asset sold is rural agricultural land no capital gain was admitted in the return of income filed for the A.Ys. 2009-10 and 2010- 11. During the cour....
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....sst. year 2010-11 as income from other source and paid taxes at higher rate. It was offered to tax in the Asst. year 2010-11 because the final payment was received in that year. The assessment order u/s 143(3) passed by the Assessing Officer is therefore neither prejudicial to the interest of revenue nor erroneous." 6. However, the CIT was not convinced with the submissions made by the learned counsel for the assessee and set aside the assessment order by remanding the issue back to the file of the Assessing Officer to examine whether the land in question was agricultural land which was not liable to capital gains. The Assessing Officer was also directed to enquire into the assessee's contention that the amount of Rs. 8,45,000 was rec....
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....subsequent year for A.Y. 2010-11 it was shown in the return of income that the assessee has received balance sale consideration of Rs. 2 lakhs. The total advance of Rs. 15 lakhs was admitted in the Balance Sheet filed with the return of income as the asset sold is a rural agricultural land, no capital gain had been admitted for the A.Ys. 2009-10 and 2010-11. 10. The Assessing Officer has verified during the course of assessment proceedings the details filed by the assessee in order to prove that the land sold is a rural agricultural land and that also taken cognizance of agricultural income shown in the return of income. The assessee claimed capital gain exemption on the sale of agricultural land on the ground that the land is situated in ....
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..... An order cannot be termed as erroneous unless it is not in accordance with law. Section 263 does not visualize a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer who passed the order, unless the decision is held to be erroneous. An order to be termed as prejudicial to the interests of the revenue, there must be some prima facie material on record to show that tax which was lawfully eligible has not been imposed. The Hon'ble Bombay High Court in the case of Gabriel India Ltd. (203 ITR 108) (Bom), has laid down the principles for exercising jurisdiction Under Section 263 as follows: "Two circumstances must exits to enable the Commissioner to exercise the power of revision under this sub-sectio....
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.... the Revenue. But that by itself would not be enough to vest the Commissioner with the power of suo motu revision because the first requirement, namely, that the order is erroneous, is absent. Similarly if an order is erroneous but not prejudicial to the interests of the Revenue, then the power of suo-motu revision cannot be exercised. Any and every erroneous order cannot be the subject-matter of revision because the second requirement must be fulfilled. There must be some prima fade material on record to show that tax which was lawfully exigible has not been imposed. When exercise of statutory power is dependent upon the existence of certain objective facts, the authority before exercising such power must have materials on record to satisf....