2015 (3) TMI 49

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.... income of Rs. 1,59,360/- for A.Y 2009-10. The Income Tax Officer, Ward-2 Kothagudem picked up the case for scrutiny for examining the cash transactions in the bank account and completed assessment u/s 143(3) on 25.5.2011 by determining the income at `Rs.1,79,160/-. 3. During the course of the assessment proceedings, the assessee claimed that the cash deposits made in the bank a/c was by way of sale of agricultural land and certain other cash deposits made in the bank a/c were explained as receipt of loans advanced in the earlier years. The CIT assumed jurisdiction u/s 263 of the I.T. Act and held that no proper sale deed or registered copy of the sale deed was obtained by the AO with respect to agricultural land. Further, the AO had not c....

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....ve relatives and friends, section 269SS or 269T is not applicable. 4. It is further stated that the assessee is having 8 acres of agricultural land situated at Paloncha Village. The land is situated in schedule area and there is no registration under the A.P. Registration Act. In general, the people who live in this area, made agreements on non-judicial stamps. The assessee sold the agricultural land to an extent of 8 acres worth Rs. 13,90,000/- for his son's education expenses. The assessee has submited that notarized agreements copies entered with the parties were produced before the AO in scrutiny proceedings. The AO considered above said facts of local situations and accepted the same. 5. The CIT after going through the submissions of....

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....alleged purchasers and examined them to ascertain the genuineness of the transactions nor the AO conducted any independent enquiry to satisfy the genuineness of the above transactions. 6.5 It is settled law that an assessment order could be considered as erroneous not only if it contains some apparent error of reasoning or of law or of the fact on the face of it, but also for the reason that it is an order which simply accepted what the assessee has stated in his return &/or in the other particulars furnished by him and failed to make examination/verification/enquiries which are caled for on the facts and circumstances of the case. In this case, the AO has not examined the above issues in accordance with the law as well as on the establish....

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....sel that a thorough examination was made by the AO while in the scrutiny assessment and the AO completed the assessment only after such verification and determination of income at Rs. 1,79,160/-. It was pleaded that a mere change of opinion by the CIT cannot be the reason for assumption of jurisdiction u/s 263. 9. The ld DR on the other hand pointed out that the AO had not produced the alleged purchasers and examined them to ascertain the genuineness of the transactions and hence inquiry made by the AO was deficient. The DR also pointed out that in case of return of loans, details with respect to the area, purpose of taking the loan and the mode of taking the loan were all missing and hence the particulars have not been examined by interro....