2015 (9) TMI 741

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....hat assessment order is erroneous and prejudicial to the interests of the Revenue and in setting aside the order of the Assessing Officer for de novo consideration and passing fresh assessment in accordance with law. 2. Brief facts are that assessee, an individual, filed return of income for the assessment year 2009-10 on 31.10.2009 declaring total income of Rs. 1,07,35,030/-. Assessment was completed under section 143(3) on 26.12.2011 accepting the income returned. Later, Commissioner of Income Tax passed order under section 263 of the Act setting aside the assessment for de novo consideration to pass fresh assessment in accordance with law for the reason that the Assessing Officer has omitted to cause enquiries in respect of business of ....

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....08-09 and on examination of all the details furnished by the assessee, the Assessing Officer accepted that the activities of the assessee in developing the land, making plots and selling them is not in the nature of business and the gains on such activity are to be assessed only under capital gains. He further submits that on satisfied with the submissions of the assessee, the Assessing Officer dropped 147 assessment and completed the assessment without making any computation under business. Referring to pages 77 and 82 of the paper book, counsel further submits that in co-owners case, the Tribunal has already held that sale proceeds from those plots are assessable only under the head capital gains and not under the head business income. 4....

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....gains. When asked for reasons for reopening of the assessment for assessment year 2008-09, counsel for the assessee expressed his inability to produce the reasons for reopening. In the absence of reasons furnished before us, the submissions of the assessee that Assessing Officer reopened the assessment for the immediately preceding assessment year and dropped the same accepting the contention of the assessee that income arising from sale of plots has to be considered only as capital gains has no relevance. Coming to the submission of the assessee that in co-owner's case the Tribunal has allowed the claim of the assessee holding that gains arising out of sale of plots has to be considered as capital gains instead of business income, we are u....

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....e under capital gains. The Commissioner of Income Tax clearly stated in his order that Assessing Officer passed an erroneous order allowing the claims of the assessee without properly investigating or examining the issues which means, the Assessing Officer has not applied his mind at all to the issues while completing the assessment. 6. In the case of M/s. Malabar Industrial Co.Ltd., (243 ITR 83), the Hon'ble Supreme Court held that "an incorrect assumption of facts or incorrect application of law will satisfy the requirement of the order being erroneous. Similarly, orders passed without applying the principles of natural justice or without application of mind are also erroneous". In the instant case, the Assessing Officer while completing....