TaxTMI 
TaxTMI 
2015 (11) TMI 584
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....at for the assessment year 2005-06, the assessee did not originally file any return of income voluntarily under section 139 of the Act. Subsequently, during the course of the scrutiny proceedings for assessment year 2006-07 in the case of Shri Ashish Bhangire, son of the assessee, it was noticed by the Assessing Officer that the assessee had sold certain plots in the preceding previous year relevant to the assessment year 2005-06. The total consideration received by her on such sales was Rs. 12,98,400/-. On the basis of the aforesaid information, the Assessing Officer reopened the assessment of the assessee. In response to the notice under section 147/148 of the Act, the assessee filed return of income declaring therein long term capital gains of Rs. 7,92,404/-. The re-assessment was completed under section 143(3) r.w.s. 147 of the Act vide order dated 29.11.2010, accepting the returned income. This order of the Assessing Officer is subject-matter of action under section 263 of the Act by the Commissioner. 4. On subsequent examination of records, it was noticed by the Commissioner that the assessee had converted her agricultural land into nonagricultural land and then had sold t....
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.... Commissioner considered the judicial decisions cited by the assessee, during the course of hearing, as noted in para 6.2 and 6.3 of his order and held that question whether profit resulting from transaction could be assessed under the head "capital gains" or "business" would depend on the facts and circumstances of a given case and the intention of the assessee emerging from such facts and circumstances. In the present case, it is apparent that the Assessing Officer has merely presumed the facts and circumstances relating to the impugned transactions, as stated by the assessee, to be correct. The Assessing Officer did not make any enquiry on the correctness or otherwise of the various submissions made by the assessee. The correctness of the averments made by the assessee were simply taken for granted and no enquiry and verification were made. The Commissioner further observed that along with return of income, the assessee had enclosed copies of few bills in respect of work carried out before the plots were sold out. These included preparing lay-out, filling the land, leveling the land, etc.. This in itself shows that after the land was converted into non-agricultural, the same ....
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....en by the assessee is plausible and not erroneous. The view of the Assessing Officer on the issue is a possible view and therefore the Assessing Officer has not committed any error in accepting the aforesaid view. The Ld. Authorized Representative for the assessee next contended that the Commissioner merely indulged in invoking section 263 of the Act in an attempt to replace the view of the Assessing Officer with his own view, which may probably result in better assessment from revenue perspective. The mere substitution of plausible view by another view is not permissible in exercise of power conferred under section 263 of the Act. For this proposition, he relied upon the judicial decisions in the case of CIT vs. Max India Ltd., (2007) 295 ITR 282 (SC); CIT vs. Gabriel India Limited, 203 ITR 108 (Bom); and, CIT vs. Premji Gopalbhai, 113 ITR 785 (Guj.). 9. The Ld. Authorized Representative for the assessee next submitted that the assessment has been carried out under section 147/148 of the Act. As a corollary, the assessment proceedings have been initiated and completed as a result of some credible enquiry which led to formation of belief about the escapement of income. The appli....
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.... lower incidence of taxation as compared to taxability under the head "business income" is erroneous as well as prejudicial to the interest of the Revenue. It is seen that the relevant facts have been placed before the Assessing Officer in the assessment proceedings. The facts have been re-appreciated by the Commissioner on a different footing. The Assessing Officer has accepted the claim of the assessee under the head "capital gains" based on pertinent facts. The assessee has never purchased the impugned agricultural land or any other land in her life time as stated by her. The property was bestowed upon her by succession. We find no merit in the action of the Commissioner. In the background of fact narrated, mere selling of such agricultural land after its conversion into non-agricultural land and dividing the same into smaller plots for convenience and to overcome regulatory hurdles cannot be characterized as adventure in the nature of business under section 2(13) of the Act. We find that in the similar facts, the Hon'ble Supreme Court in the case of Sarojkumar Mazumdar (supra) have clearly held in favour of the assessee. Therefore, the view taken by the Assessing Officer cannot....