TaxTMI 
TaxTMI 
2015 (6) TMI 718
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....,32,212 has been made, therefore, it is outside the scope of sec. 263. 3. That without prejudice, the directions and findings of the learned CIT are unsustainable and contradictory so much so that on one hand he has directed the A.O. to decide the issue of assessabiity of income in the hands of the assessee relating to TDS of Rs. 1,09,32,212, afresh while on other hand he has held that the said income is taxable in the hands of another assessee namely M/s. Ambience Developers & Infrastructure (P) Ltd." ITA No.2501/Del/2012: (Ambience Developers & Infrastrucrure Pvt. Ltd.: 2. Assessee has questioned validity of revisional order passed under 263 of the Income-tax Act, The 1961 on the following grounds: "1. That under the facts and circumstances, Ld CIT exceeded his jurisdiction in invoking provisions of sec. 263 of the I.T. Act as the order of the A.O. is neither erroneous nor prejudicial to the interest of Revenue apart from that no such circumstance exist which may justify invoking of Sec.263 of the I.T. Act. 2. That under the facts and circumstances, Ld. A.O. after proper application of mind has accepted the claim of the assessee that income of lease rental from leasing of....
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....ion, inquiry, verification on the claim of TDS of Rs. 1,09,32,212 without offering corresponding income for taxation. The Learned CIT also noted that the Hotel had got Rs. 75 crores interest free deposits from Ambience Developers & Infrastructure (P) Ltd. (In short "developer") & and in turn the Hotel gave to the developer company the rights in some retails spaces in the hotel premises for managing leasing and to receive an appropriate revenue and receipts from said space. The revenue receipts from the said spaces during the year was Rs. 6,27,84,240. The learned CIT held that the provisions of sec. 60 of the Income-tax Act, 1961 are applicable in the case of the Hotel. The learned CIT held that the Assessing Officer without application of mind, verification and investigation has accepted the declared income of Rs. 6,27,84,240 as "income from house property" in the hands of Ambience Developers & Infrastructure (P) Ltd. The Learned CIT holding the assessment order as erroneous as well as prejudicial to the interest of revenue has set aside the same and restored it to the file of the Assessing Officer with direction to frame the assessment afresh on the issues as per the provisions of....
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.... of the paper book filed in the case of developers i.e. copy of the letter addressed to the Assessing Officer by the assessee on the subject of "assessment proceedings in the case of M/s. Ambience Developers and Infrastructure Pvt. Ltd. (ADIPL), assessment year 2008-09 -PAN AAECA6894P" explaining the receipt of Rs. 75 crores and about the arrangement with its sister concern. The Learned AR submitted further that both the assessment orders have been passed after taking approval from Additional CIT, Central Range-5, New Delhi who had also examined the complete file along with the issues and approved the same. Thus, there is no error of law and fact while passing the impugned assessment order. He submitted that even in the case of two possible opinions, section 263 cannot be invoked. It is not the law that if the body of assessment orders does not touch upon some issues specifically, then section 263 can be invoked. The Learned AR placed reliance on several decisions including the decisions in the cases of Malabar Industries Co. Ltd. 243 ITR 83 (S.C), Supper Cassettes Industries Pvt. Ltd. 41 ITD 530 (Del.), Salora International Ltd. - 2 SOT 705 (Del.), Ganpat Rai Vishnoi - 152 Taxman ....
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....directed to reduce the same from developers. In support, the Learned AR has referred concluding paragraph of sec. 263 order in the case of hotels. The Learned AR submitted further that the Learned CIT in the case of developers has directed that if the said income is assessed in the hands of developers, it will be assessed as income from subletting. In support, he referred beginning paragraphs of page 7 of section 263 order in the case of developers. The Learned AR pointed out that Learned CIT further said that the issue under consideration is not that the income should be taxed under which particular head but the fact that the issue has not been examined by the Assessing Officer during the course of assessment proceedings. In support, he referred page Nol. 8, para 2 of sec. 263 order in the case of developers. Fifthly, the Learned CIT has given finding that provisions of sec. 60 of the Act are applicable in the present case which is not the correct position of law, contended the Learned AR. He submitted that sec. 60 is applicable where the income arises from an asset which is not transferred, such income shall be taxed in the hands of transferor. The Learned CIT has failed....
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....x companies were held by the developers. The developer was having substantial share holding in those companies. All the shares were transferred during the year at face value/cost, hence no capital gain was declared. The learned CIT has held that the Assessing Officer had not examined the sale value and also with reference to sec. 40A(2)(b) of the Act. The learned CIT was thus not justified in giving direction to the Assessing Officer to examine the issue of capital gain on transfer of shares of six companies under sec. 40A(2)(b) of the Act. He submitted further that in the assessment framed under sec. 143(3)/263, no addition has been made on this issue. Without prejudice, he contended that this aspect has been fully examined by the Assessing Officer during original assessment proceedings as well as by the learned Additional CIT while giving approval. 8. The Learned AR also informed that consequential assessments have already been framed vide orders dated 28.3.2013 wherein the Assessing Officer has assessed Rs. 627,84,240 on substantive basis in the hands of hotel as income from house property and on protective basis in the hands of developers. The Learned CIT(Appeals) has confirme....
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....proposition of law that for invocation of the provisions laid down under sec. 263 of the Act, both the ingredients i.e. firstly the assessment order must be erroneous and secondly it must be prejudicial to the interest of revenue are to be examined. It appears from the assessment orders that taxability of Rs. 6,27,84,240 in the proper hand in view of the provisions of section 60 of the Income-tax Act, 1961 as well as Section 53A of the Transfer of the Property Act, has not been examined by the Assessing Officer as the issue was linked to both the assessees as it was to be taxed in one hand and effect thereof was to be given in the other hand. Thus, it can be said that in absence of examination/inquiry of the above aspect the assessment orders are erroneous as well as prejudicial to the interest of Revenue. To this extent the revisional orders in question are upheld. The ground Nos. 1 and 2 in the case of Ambience Hotel & Resorts (P) Ltd. and ground Nos. 1, 2, 3.2 are thus rejected. We, however, are of the view that when the learned CIT was setting aside the matter to the file of the A.O. for framing the assessment orders afresh as per the law after examining/making inquiry o....