TaxTMI 
TaxTMI 
2019 (10) TMI 1172
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....hich is contrary to the material on record and provisions of the Act, unjust and bad in law, more particularly when the case was selected for 'Limited Scrutiny' for assessment under section 143(3) to examine the purchase of property. 3. On the facts and circumstances of the case and applicable law, Ld. Pr. CIT-1, Indore erred in holding that the order passed by Ld. A.O. u/s 143(3) is erroneous and prejudicial to the interest of revenue within the meaning of section 263 which is contrary to the material on record and provisions of the Act, unjust and bad in law, also more particularly when it is not a case of lack of enquiry, at best could be possible termed as case of inadequate enquiry. 4. The appellant craves leave to add, amend, alter or otherwise raise any other ground of appeal." 2. The only effective ground in this appeal is against invoking the provisions of section 263 of the Income Tax Act, 1961 (hereinafter called as 'the Act'). Hence, all the grounds are taken together and are being disposed of together. 3. The facts giving rise to the present appeal are that the assessment in this case was framed u/s 143(3) of the Act vide order dated 7.12.2016. ....
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....ke it clear that there was no enquiry by the A.O. in respect of the issue in question i.e. difference amount of Rs. 55,33,00,000/- being the value adopted by the stamp valuation authority and declared by the assessee in terms of section 56(2)(vii)(b) of the Act. Further, the A.O. has not verified the source of registration expenses incurred by the assessee. 6. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. The basis of revising the order as stated in the reason by the Ld. Pr. CIT is as under: a. It is observed that you had purchased immovable property which was the basement of the building named "Palak Avanue" admeasuring 3700 sq.ft. 15.04.2013 from Sh. Kailash Sahu & Shri Motilal Sahu, through power of Attorney holder Sh. Kamal Verma, Indore for consideration of Rs. 1,25,00,000/- which was paid in cash to seller in various date and incurred registration expenses of Rs. 14,08,345/- which was also paid in cash. On perusal of purchase deed of above said property, it was noticed that the 'market value' of the property was adopted by Stamp Valuation Authority for Rs. 1,80,53,000/-. As such....
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....gard to adoption of stamp valuation for the purpose of adopting the sale consideration? Ld. Counsel for the assessee could not point out such query raised by the A.O. Not even the Ld. Counsel for the assessee bring to our notice any explanation by the assessee regarding value adopted by the stamp valuation authority. In this factual matrix, it is to be examined whether case laws as relied by the Ld. Counsel for the assessee are applicable on the facts of the present case. For the sake of clarity, section 263 of the Act is reproduced as under: "263. Revision of orders prejudicial to revenue (1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the ^2 Assessing] Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he, may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. 3 Explanati....
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....& 8 as under: 10 The Hon'ble Delhi High Court in Para-14 of the judgement observed as under: 11. Hence, from the above observation of the Hon'ble Court it is clear that there are three categories of the cases (i) where there is enquiry but the findings are incorrect/erroneous; (ii) where there is failure to make a proper or full verification or enquiry; and (iii) Where the Assessing officer had not made any enquiry or examined evidence whatsoever. There was total absence of enquiry or verification. The Hon'ble High Court further held that in cases of wrong opinion or finding on merits the CIT has to come to the conclusion and himself decide that the order is erroneous by conducting necessary enquiry, if required and necessary before the order u/s 263 of the Act is passed. In such cases, the order of the A.O. will be erroneous because the order passed is not sustainable in law and the said finding must be recorded. CIT cannot remand the matter to the A.O. to decide whether the findings recorded are erroneous. In cases where there is inadequate enquiry but not lack of enquiry the CIT must give and record the finding that the order/enquiry made is erroneous. This can....
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.... of the CIT that any extra stamp duty over and above the transaction value was payable because of the circle rates. The order under Section 263 of the Act was set aside/cancelled. Accordingly, Revenue is in appeal." 12. In that case, the Tribunal had set aside order observing that the CIT had not held and come to the conclusion or given a finding that the actual receipt of consideration was more than what was declared in the return. The CIT had not recorded any finding that the sale consideration of the property was higher. It has been held that the CIT could not have made any addition u/s 50C of the Act as the stamp duty had not been enhanced by registering authority and sale deed was registered. It was not the case of CIT that any extra stamp duty over and above the transaction value was payable because of circle rates. Hence, the order u/s 263 of the Act was set aside and cancelled. However, in the present case, the reasons for initiating the proceedings u/s 263 of the Act by the Ld. CIT are reproduced as under: a. It is observed that you had purchased immovable property which was the basement of the building named "Palak Avanue" admeasuring 3700 sq.ft. 15.04.2013 fr....
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....penditure incurred on registration amount to Rs. 14,08,345/- remained unproved/unexplained. The Ld. CIT was of the view that apparently the registration expenditure was paid on undisclosed income and was liable to be taxed which has not been done by the assessee. 14. During the course of hearing, Ld. Counsel for the assessee was specifically asked to point out from the records that any enquiry was conducted by the A.O. regarding the value adopted by the stamp valuation authority of the property in question. He could not brought to our notice any such query or notice issued by the A.O. Hence, it can be safely inferred that the facts of the present case would fall where the A.O. did not conduct any enquiry or examined the evidence whatsoever related to the issue under consideration. There was total absence of enquiry or verification. Therefore, we do not see any infirmity into the action of the Ld. CIT for setting aside the assessment order and remitting the assessment to the file of the A.O. with a direction to examine the issues of difference of market value of the property in question and verifying the source of expenditure incurred on registration of the property after affo....