TaxTMI 
TaxTMI 
2019 (3) TMI 78
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....ital gain was before AO and CIT(A) and as such CIT could not assume jurisdiction u/s 263 as same has merged with order of CIT(A). (ii) That in any case, issue of long term capital gain was considered in detail by AO and addition made by AO were deleted by CIT(A) and as such proceeding u/s 263 are merely based on change of opinion and not in conformity with provisions of section 263 of IT Act, 1961. (iii) That further, observations of Cit are highly arbitrary and not based on proper appreciation of facts. 3. That even subsequent notice was issued in an illegal and arbitrary manner without proper appreciation of acts on record, submission and clarification furnished by appellant and without recording any finding that assessment order is erroneous and prejudicial to interest of revenue in respect of such issues. 4. That there is no case of any lack of enquiry and finding and conclusion that assessment order is erroneous and prejudicial to interest of revenue in term of provisions of section 263 is illegal, arbitrary and without jurisdiction." 2. Succinctly stated facts of case shows that assessee is an individual who filed her return of income on 29/7/2013 declaring total inc....
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.... from purchase document dated 9/8/2007 and further from collaborators agreement dated 18/4/2012. Accordingly, he held that case of assessee is covered under section 54 of income tax act. With respect to total consideration received for working of long-term capital gain he decided issue whether INR 63,500,000 as per assessing officer or INR 6 3082378 as per appellant, is correct sales consideration. According to learned CIT - A total consideration is to be taken at INR 6 3082378 and not INR 6 3500000/- . he therefore decided this issue also in favour of assessee. With respect to quantum of long-term capital gain learned CIT - A held that net capital gain as returned by appellant is accepted. He also held that figure of deduction under section 54 for purchase of residential house within 2 years of date of transfer is taken at INR 31425000/- as claimed by appellant assessee. 4. Subsequently on examination of record, learned CIT found that order passed by ld AO u/s 143 (3) of act is erroneous and prejudicial to interest of revenue and therefore show cause notice was issued under section 263 on 8/3/2017. The assessee replied show cause notice on 14/3/2017. The assessee submitted that....
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....mining amount of sale consideration on basis of appreciation of correct facts in this manner and assessing amount of capital gain accordingly, increase amount of sale consideration by Rs. 417622/- and that too on estimated basis. Therefore order of learned assessing officer is clearly erroneous. It was further noted by learned CIT that that there are substantial deposits in bank accounts , huge investment in mutual funds and utilisation of heavy amount received from builder in pursuance of collaboration agreement and income earned thereon and source of investment wherefrom interest income was received is also required to be examined as case of assessee was selected for complete scrutiny. It was further noted that there are certain properties owned by assessee, however notional income on basis of annual letting value of a number of properties were not shown. It was further noted that since no income from house property in respect of 2 properties have been declared by assessee in her return of income for assessment year 13 - 14, income to that extent has escaped assessment. It was held that AO had failed to consider this issue, which has resulted in order being erroneous on this coun....
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....NR 53010040 whereas revised total capital gain computed by learned assessing officer pursuant to order under section 263 of income tax act is only INR 58846668. He further stated that there is no amendment in income from house property of Rs. 445200 shown in original assessment order and income under head other sources shown of INR 323291 in original assessment order which remained unchanged in order passed under section 143 (3) read with section 263 of income tax act. Therefore, he submitted that there is no error in order of learned assessing officer with respect to above two issues. c. With respect to issue of due enquiry he referred to decision of coordinate bench in case of Torrent Pharmaceuticals Ltd vs deputy Commissioner of income tax 164/AHD/2018 for assessment year 2014 - 15. He also placed on record a detailed note of various judicial precedents on issues having merged with order of learned CIT - A in pursuance of clause (c) of explanation 1 of section 263 of income tax act. He further submitted that when assessing officer has taken a possible view there is no reason for Commissioner to invoke jurisdiction under section 263 of income tax act to arrive at a different ....
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.... tax act has not merged with order of learned CIT - A as both are on different counts. With respect to order passed by learned assessing officer pursuant to order under section 263 of income tax act, she stated that even after examination of learned assessing officer does not find any error in original order, it does not mean that same conclusion has been reached by learned assessing officer after making due enquiry. It was further stated that even learned principal Commissioner of income tax has not directed learned assessing officer to make any addition but has directed only to examine issues involved in income from house property and income from other sources. Therefore, on all three counts with respect to computation of capital gain, income from house property and income from other sources, order of learned assessing officer is found to be erroneous and prejudicial to interest of revenue. She therefore stated that order passed by learned principal Commissioner of income tax is sustained under section 263 of income tax act. 7. We have carefully considered rival contention and perused orders of learned assessing officer as well as order of learned Commissioner of income tax act ....