TaxTMI 
TaxTMI 
TaxTMI 
2016 (12) TMI 1490
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....e Act on 24.12.2008 determining total income as returned by the assessee. Subsequently, notice u/s 148 of the Act was issued reopening the assessment u/s 147 of the Act, for the reason that income chargeable to tax has escaped assessment within the meaning of section 147 of the Act. The A.O. re-opened the assessment for the reason that on verification of assessment records, it was noticed that the assessee has computed short term capital gain towards sale of certain lands, as against sale consideration of Rs. 29,41,000/-, claimed cost of acquisition of Rs. 28,98,700/-. On verification of the sale deed no.4011/2005 dated 14.9.2005 registered with the SRO Bhogapuram, it is noticed that said land was purchased for a consideration of Rs. 4,45,805/-. The assessee has claimed cost of acquisition of the property of Rs. 28,98,700/- as against actual cost of acquisition of Rs. 4,45,805/-, which resulted in excess claim of cost of acquisition of Rs. 21,75,695/-, consequently, income chargeable to tax has been escaped assessment. Subsequently, the case has been taken up for scrutiny and accordingly assessment was completed u/s 143(3) r.w.s. 147 of the Act a....
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.... agreement for purchase of property and arrived at a short term capital gain. The A.O. after considering the copies of registered sale deeds as well as unregistered sale agreements has accepted the computation made by the assessee and hence the assessment order passed by the A.O. cannot be considered as erroneous in so far as it is prejudicial to the interest of the revenue. 5. The CIT after considering the explanations of the assessee, held that assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the interest of the revenue as the A.O. failed to examine cost of acquisition claimed by the assessee with necessary evidences. Though, the assessee supports the cost of acquisition by unregistered sale agreement, the fact that the registered sale deed shows cost of acquisition of Rs. 40,45,805/- as against which the assessee has claimed a cost of acquisition of Rs. 28,98,700/- which resulted in escapement of income to the tune of Rs. 21,75,695/-. Though, the documents clearly depicts actual consideration for purchase of property, the A.O. seems to have confused the need for proper scrutiny and objective evaluation of the unregistered agre....
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....ich is less than the cost of acquisition claimed by the assessee. The CIT was of the opinion that the A.O. failed to examine the issue with reference to necessary evidences to justify the cost of acquisition claimed by the assessee. Although, the assessee claims to have unregistered agreement to sell to justify the cost of acquisition, which is over and above the cost shown in registered sale deed, the A.O. failed to examine the authenticity of the sale agreements produced by the assessee. It is the contention of the assessee that in the re-assessment proceedings, the A.O. has examined the copies of registered sale deeds as well as unregistered sale agreements to come to the conclusion that the cost of acquisition claimed by the assessee is correct. The assessee further contended that she had considered sale consideration as per the unregistered sale agreement as against which claimed cost of acquisition as per unregistered sale agreement for purchase of property. These facts were furnished before the A.O. and the A.O. after satisfied with the explanations offered by the assessee has chosen to accept computation of capital gain, hence, the assessment order passed by the A.O. cannot....
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.... is not prejudicial to the interest of the revenue. 10. The CIT has power to revise assessment order u/s 263 of the Act, but to invoke the provisions of section 263 of the Act, the twin conditions must be satisfied i.e. (1) the order of the A.O. is erroneous (2) further it must be prejudicial to the interest of the revenue. Unless both the conditions are satisfied, the CIT cannot assume jurisdiction u/s 263 of the Act. It is not necessary that every order which is erroneous may be prejudicial to the interest of the revenue or vice versa. In some cases the order passed by the A.O. may be erroneous but it may not be prejudicial to the interest of the revenue or vice versa. Unless the order passed by the A.O. is erroneous and also prejudicial to the interest of the revenue, the CIT cannot assume jurisdiction to revise the assessment order, this is because the twin conditions i.e. the order is erroneous and the same is prejudicial to the interest of the revenue are co-exist. 11. In the present case on hand, on perusal of the facts available on record, we find that the A.O. has conducted detailed enquiry and also examined the issue of computation of cost of acquisition in the reassess....