TaxTMI 
TaxTMI 
TaxTMI 
2015 (5) TMI 712
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.... as against Long Term capital gains. The order of Id. CIT revising order neither erroneous nor prejudicial to the interest of revenue deserves to be quashed. It be so held now. 2 Ld. CIT erred in law and on facts in not taking into consideration replies submitted in response to the show cause notice issued u/s 263 of the Act. Ld. CIT erred in not following or distinguishing case laws relied upon by the authorized representative of the appellant. Ld. CIT ought to have taken cognizance of the submissions and commented upon the same. 3 Ld. CIT erred in law and on facts in directing AO to treat land sold as stock in trade and to tax sale transaction under the head profits and gains from business ignoring the fact that land sold held as investment since several years was valued at cost in the Balance Sheet. The order passed after due verification of the claim made by the appellant ought to have been upheld. It be so held now. 4 Ld. CIT erred in law and on facts in holding that order passed without ascertaining correctness of facts applying incorrect provisions of law made order erroneous and prejudicial to the interest of revenue. Ld. CIT without appreciating facts in detail erred in....
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....s of the assessee as 'Business Income'. He further directed the AO that the assessee's claim u/s.54 of the Act is to be disallowed and denied since the profit from sale of land is to be treated as 'business income' and not as 'capital gain'. Aggrieved by the order of the ld.CIT, the assessee is now in appeal before us. 3. Assessee is aggrieved by the order of the ld.CIT passed u/s.263 of the Act on the ground that the CIT erred in law and on facts in not taking into consideration replies submitted in response to the show-cause notice issued u/s.263 of the Act. The ld.CIT erred in not following the caselaws relied upon by the assessee. The ld.CIT erred in treating the longterm capital gain as 'business income'. The ld.CIT failed to appreciate the fact that the land so sold was held as investment since several years was valued at the cost in the balance-sheet. The ld.CIT failed to take note of the fact that the AO made queries and after verifying the claim made assessment. The ld.CIT erred in law and on facts in holding that in the order passed by the AO without ascertaining correctness of the facts applying incorrect provisions of law made such order is erroneous and prejudicial to....
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....the interests of the Revenue but it may not be erroneous. In case, any one of the conditions is not satisfied, then ld.CIT cannot invoke the provisions of section 263 of the Act. He submitted that in the case in hand, the basis for invoking the provisions of section 263 of the Act which can be inferred from the notice issued u/s.263 of the Act is that on verification of the case record, it was found that the assessee was engaged in the business of development of land and is a builder. And in AY 2009-10, the assessee had offered income from sale of non-agricultural land as business income. The said land sold in Financial Year relevant to AY 2009-10 was originally agriculture land after conversion into non-agricultural land it was sold and the income was offered as business income. In fact, assessee obtained relief from the Appellate Authority on the ground that the provisions of wealth tax were not attracted on the said land which had become business asset after conversion into non-agricultural land. He submitted that this reasoning of the ld.CIT is erroneous. It is not the case where the land in question was treated as stock-in-trade in the past years. He further submitted that the....
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....24,15,474/- Rs.1,68,89,233/- (ii) From the above working, it is apparent that sale price of land is taken at Rs. 4,52,75,125/- and cost of acquisition of land with improvement cost is taken at Rs. 59,70,418/-. Further assessee has claimed deduction u/s. 54F of the I. T. Act for Rs. 2,24,15,474/-, On verification of case record, it is found that assessee is engaged in the business of development of land and is builder and in A. Y. 2009-10, the assessee has offered income from sale of non-agricultural land as business income. The said land sold in Financial Year relevant to Assessment Year 2009-10 was originally agriculture land and after conversion into non-agricultural land it is sold and the income is offered as business income. In fact, assessee obtained relief from the Appellate Authority on the ground that the provisions of wealth tax were not attracted on the said land which had become business asset after conversion into non-agricultural land. (iii) In the year under consideration, the assessee, once again, converted one of his agricultural land holding at Revenue Survey No. 11 & 1036 of Sevasi, Baroda during the year under consideration (02/04/2009) .since, the sa....
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....the assessee has to within a period of 3 years after the date of transfer of Long Term Capital Gain construct residential house, then only deduction from capital gain can be allowed as per Clause (a) & (b) of Sub-Section 1 of Section 54F. On verification of case record and the retails filed during the assessment proceedings, it is found that assessee has claimed deduction u/s. 54F on account of investment in construction of farm house at Kanchi, Sevasi. Total investment in Farm House Kanchi up to 15/10/2010 is claimed at Rs. 4,14,53,677.91. The assessee has claimed deduction to the extent of investment during the period from 01.04.2009 to 15/10/2010 at Rs. 2,58,18,842/- in construction of house because of extended due date for filing of return of income u/s. 139(1) for A.Y. 2010-11. On perusal of copy of ledger account of construction of farm house, Kanchi, it is found that assessee had invested sum of Rs. 27.46.703/- as on 31/03/2007 in the said farm house and such amount invested of Rs. 1,78.43,051.42/;- up to 01/04/2009 and investment in the said farm house up to 31/03/2010 came to Rs. 3,01,53,651.91/-. It is established from the copy of account filed during the assessment proce....
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.... Baroda, Akota and Rs. 18,35,000/- in Indian Bank during Financial Year 2009-10. The assessee has filed relevant cash book for cash deposits except Rs. 18,35,000/-. The AO has not obtained copy of bank statement and not verified the sources of deposit in the bank accounts through cash book. No verification at all of source of cash deposit of Rs. 18,35,000/- has been made by the AO. (4) The Assessing Officer has also failed to seek any clarification from the assessee with respect to the wealth tax liability for the year under consideration." 4.1 In response thereto, the assessee made submissions vide letter dated 12/09/2013 and also made further submissions vide written submissions letter dated 03/10/2013. At the outset, the contention of the assessee is that these written submissions were not considered by the ld.CIT before passing the impugned order. We find that the ground for revising the assessment order as stated in the impugned order is in two folds; firstly, the ld.CIT was of the view that the gain arising out of transfer of land in question ought to have been treated by the assessee as business income as the assessee is engaged in the business of development of land and i....
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.... be engaged into a business of sale and purchase of articles, goods and at the same time he can also make investment in such goods or articles as an investor. In a case of Jeweller, he can be engaged in the business of sale and purchase of jewellery, at the same time, he can also make investment in gold, jwellery and bullion. Therefore, we are of the considered view that the reasoning of the ld.CIT for revising the order on this basis cannot be confirmed as two view are possible. Another reason given by the ld.CIT is that the AO allowed deduction to the assessee which was otherwise not available under the facts of the present case. We find that the ld.CIT observed that on verification of case record and the details filed during the course of assessment proceedings, it was found that the assessee has claimed deduction u/s.54F on account of investment in construction of farm house at Kanchi, Sevasi. Total investment in Farm House Kanchi upto 15/10/2010 is claimed at Rs. 4,14,53,677.91. The assessee has claimed decuction to the extent of investment during the period from 01/04/2009 to 15/10/2010 at Rs. 2,58,18,842/- in construction of house because of extended due date for filing of r....
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....to be applicable to extension of existing house under construction, the allowable claim of exemption has to be restricted to the extent of investment/expenditure incurred in the said residential house subsequent to the transfer of original capital asset under consideration. So far this reasoning is concerned, we find that the AO has allowed deduction without examining this aspect. Contention of the assessee is that the AO had raised a specific query in this regard and after considering the facts, submissions and case-laws allowed the deduction. But no such material is placed on record of this Tribunal that the AO during the course of hearing raised query with regard to claim of deduction of u/s.54 of the Act. Therefore, in the absence of such material, we do not see any infirmity into the finding of ld.CIT that AO failed to examine the aspect of allowability of deduction u/s.54F of the Act. After considering the totality of facts, we deem it appropriate to modify the order of ld.CIT on this issue and restore the issue of allowability of deduction u/s.54F of the Act to the file of AO for decision afresh. Thus, grounds raised in the assessee's appeal are allowed for statistical purpo....