TaxTMI 
TaxTMI 
2018 (9) TMI 213
X X X X Extracts X X X X
X X X X Extracts X X X X
....16-17/4207 Dated: 21/03/2017 To Sri Ramesh Chandra Bansal, 73/20, Collector Ganj, Kanpur Sub:-Show Cause Notice u/s 263 of the income Tax Act 1961 in the case of Ramesh Chandra Bansal, 73/20, Collector Gang, Kanpur,(PAN:AAMPB6026F), A.Y.2013-14-Reg- The assessment in your case for A.Y. 2013-14 was completed on 23.01.2015 u/s143(3) of the Income Tax Act, 1961 at an income of Rs. 1,93,81,882/-. From the perusal of the records, it has been noticed that you were the co-owner of a land property and the same was sold on 07.01.2013 for a sale consideration of Rs. 7,50,00,000/-. Further, on going through your return of income and the computation of income, it is noticed that you have not disclosed this transaction to the department. Even during the course of assessment proceedings, you could not furnish any justification about non-disclosure of this transaction as well as non- payment of due taxes on resultant capital gain income. When you were confronted by the AO on this issue, you could not prove your claims. However, you revised your return of income just 02 days before the completion of assessment proceedings. This clearly shows th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iled oral and written submissions which are placed on record. Pr. Commissioner of Income Tax-I, Kanpur has passed order under section 263 of the Act as according to the Pr. Commissioner of Income Tax-I, Kanpur, Assessing Officer has not conducted enquiry and has not examined the issues in relation to three important aspects of the return filed by the assessee. These three issues/aspects are also evident from the show cause notice issued under section 263 of the Act, which are as under:- (1) Regarding claim of deduction under section 54F of the Act, it is the contention of the Revenue that the Assessing Officer has accepted revised return filed just two days before completion of assessment without appreciating the facts and circumstances of the case. The Pr. Commissioner of Income Tax-I, Kanpur is of the opinion that Assessing Officer has not conducted proper enquiry since revised return was filed just two days prior to completion of assessment. (2) Assessee was engaged in the business of share trading and that the Assessing Officer has not made any enquiry in this regard. (3) Loan of Rs. 0.925 crores has been taken by the assessee from his brother and the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pur under section 263 of the Act. Ld. D.R. specifically argued that revised return was filed two days prior to completion of assessment and that time was too less for the Assessing Officer to make enquiry on all the three aspects for which order under section 263 was passed by the Pr. Commissioner of Income Tax-I, Kanpur. Ld. D.R. also argued that in the absence of proper enquiry and lack of material before the Assessing Officer and for the fact that within two days assessment was completed after filing of revised return, order passed under section 263 of the Act by the Pr. Commissioner of Income Tax-I, Kanpur is justified in law, since the order of the Assessing Officer was erroneous insofar as prejudicial to the interest of the Revenue. 9. We have perused the case records, heard the rival contentions and we would at the very outset look into the notice dated 5/9/2014 issued under section 142(1) of the Act by the Assessing Officer along with questionnaire, which is reproduced hereunder:- Government of India Office of the Income Tax Officer- 2(3), Kanpur PAN.:- AAMPB6026F Room No. 323, 3rd Floor, 16/69, Aayakar Bhawan Civil Lines, - K....
X X X X Extracts X X X X
X X X X Extracts X X X X
....come/trading account, balance sheet, bank statement, copies of ledger account of all the banks, purchase deed of property No.16/79D & D1, Civil Lines, Kanpur purchased for Rs. 1,50,00,000/-; withdrawal of household expenses; ledger copy of expenses; closing stock of shares; TDS certificates and copy of sale deed of agricultural land sold." We, therefore, find that on this issue and first of all in the questionnaire annexed to the notice issued under section 142(1) of the Act, a specific question has been raised by the Assessing Officer with regard to the purchase and sale of moveable and immoveable properties and the ld. A.R. of the assessee attended the hearing and has filed copy of sale deed of agricultural land which was sold by the assessee and in which he was the co-owner. Similarly, assessee has also filed purchase deed of the property for which he has claimed deduction under section 54F of the Act. 11. Revenue has also raised an objection before us that property purchased was residential-cum-commercial property. On this issue we take guidance from the decision of the Co-ordinate Delhi Bench of the Tribunal in the case of Mahavir Prasad Gupta vs. CIT [2006] 101 TTJ 1078 wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that nothing contained in this sub-section shall apply where the assessee,(i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or(ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or(iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and(b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head "Income from house property". The essence of the proviso is, therefore, that deduction under section 54F of the Act shall not be applicable in case an assessee owns more than one residential house at the time when new asset is procured. This aspect was not examined by the Assessing Officer and nothing on record shows that this issue was enquired or investigated by the Assessing Officer to verify eligibility of deduction under section 54F of the Act. 14. So far all other factors are concerned, as we have examined earlier though the assessee qua....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g Officer and entire source of income was in the knowledge of the Revenue. Assessee has not only stated that he was into share trading but also stated that for the last eight years he is not doing share trading business and he has also provided address of the trading office which he agrees that is still in existence at Ahmedabad. These evidences clearly show that factual verifications were conducted by the Assessing Officer. 16. Third issue for passing order under section 263 of the Act by the Pr. Commissioner of Income Tax-I, Kanpur is with regard to the loan taken of Rs. 0.925 crores from the brother of the assessee and it is the allegation that the Assessing Officer has not conducted any enquiry on this aspect. We observe that in the questionnaire attached with the notice under section 142(1) of the Act issued by the Assessing Officer Point No.6 reads as "Please explain the business expediency of borrowed unsecured loans, if any. The information about unsecured loans may please be furnished in a consolidated chart in the following format...................As regards fresh unsecured loans taken during the year, prove the identity, creditworthiness and genuineness of these tran....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ioner of Income Tax through Explanation 2 to section 263 of the Act, that would lead to innumerable litigations. 18. In view of above discussion, so far as deduction under section 54F of the Act is concerned, the order of the Pr. Commissioner of Income-tax passed under section 263 of the Act is valid in view of the proviso to section 54F whereas regards the other issues are concerned, they have been already examined by the Assessing Officer and for them there is no applicability of revisional jurisdiction under section 263 of the Act by the Pr. Commissioner of Income-tax and to that extent i.e. share trading business of the assessee and the loan transaction from brother of the assessee, for these issues, we quash the order under section 263 of the Act. Therefore, the order under section 263 of the Act is quashed in part as indicated hereinabove. 19. In the result, appeal of the assessee is partly allowed. Order pronounced in the open Court on 24/08/2018. ============= Document 1 ANNEXURE TO NOTICE UNDER SECTION 142(1) DATED 05.09.2014 ASSESSMENT YEAR: 2013-14 Shri Ramesh Chand Bansal In connection with the assessment proceedings for the A.Yr. 2013-14 you a....