TaxTMI 
TaxTMI 
2019 (12) TMI 301
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....come-tax also erred in holding that the assessment order passed by the Assessing Officer dated 07.12.2016 was erroneous as well as prejudicial to the interest of revenue without properly considering and appreciating the submissions made by the appellant in respect of each of the issues mentioned in the show cause notice dated 03.10.2018 and, accordingly, the order under reference deserves to be quashed. 3. That the Commissioner of Income-tax also erred in passing the order u/s 263 of the Act directing the Assessing Officer to carry out the verification whereas the Assessing Officer had already made necessary verification while passing the order u/s. 143(3) of the Act dated 07.12.2016 and the appellant had duly submitted evidence in reply to show cause notice dated 03.10.2018. 4. That the Commissioner of Income-tax also erred in passing the order u/s 263 of the Act on the ground that the Assessing Officer had not initiated proceedings u/s *201 of the Act in respect of non-deduction of tax at source by purchasers of plots of land from the appellant without appreciating that on this ground the order passed by the Assessing Officer in the case of Appellant could not b....
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.... by the Assessing Officer is erroneous and prejudicial to the interest of revenue. Accordingly, the show cause notice u/s.263 dated 03.10.2018 was issued to the assessee, the content of which has been reproduced in the impugned order. 4. In sums and substance, the relevant observations of the Ld. CIT in the show cause notice were that; • Firstly, there were cash deposits amounting to Rs. 1,07,81,000/- in the savings bank account of the assessee in Punjab National Bank and the Assessing Officer did not get the details of the said bank account and did not examine the deposits along with the source. • Secondly, the important issue involved in the case was that there was a low capital gain return by the assessee and in fact there was a capital loss of more than Rs. 96 lac from the transaction of sale of property and Assessing Officer has failed to examine the said loss. The assessee had adopted the value of the property sold as on 01.04.1981 on the basis of the Valuer's report which is arbitrary. • Thirdly, the fair market value adopted 32 years back was not based on inquiries. The details of any inquiries are not disclosed in the report and As....
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....reditworthiness of the payer in respect of both the bank accounts and to conduct the enquiry of payers for credit entries exceeding Rs. 10,00,000/-. b. From the perusal of the assessment records,, it was observed that the assessee had sold a property to 32 different persons on different dates and on different circle rates claiming a long-term capital loss of Rs. 96,25,104/- thereon. The cost of acquisition of the land was valued as on 01.04.1981 adopting the rate decided by a valuer which is totally arbitrary. During the original assessment proceedings, the AO failed to conduct the enquiry from the concerned Registration Authority regarding the rate of land prevail during 01.04.1981. As the assessee himself claimed to be an NRI, the TDS was not deducted by any purchaser for the purchase of land from the assessee. The AO did not initiate any penalty proceedings u/s 201 of the Act and is now directed to initiate the proceedings under section 201 /201 (1)(A) of the Act in the case of the purchasers. The AO is directed to verify the sale of land as per the map provided by the assessee during the proceedings under section 263 of the Act and to conduct the enquiry7 from local La....
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....rongly relied upon the observation of the ld. CIT and submitted that the points which has been raised in the show cause notice have neither been examined by the Assessing Officer nor have been inquired, and therefore, such an assessment order without carrying out proper inquiry is deemed to be erroneous and prejudicial to the interest of revenue. In his write up, he has cited catena of judgments, the list of which as under: 1. Deniel Merchant Pvt. Ltd. vs. ITO (Appeal No.2396/2017 (SC) 2. Malabar Industrial Co. Ltd. vs. CIT [2000] 243 ITR 83 (SC) 3. Rajmandir Estates (P) Ltd. vs. PCIT (2016) 386 ITR 162 (Calcutta) 4. Rajmandir Estates (P) Ltd. vs. PCIT (2017) 77 taxmann.com 285 (SC) 5. Shree Manjunathesware Packing Products & Camphor Works vs. CIT (1998) 231 ITR 53 (SC) 6. CIT vs. Amitabh Bachchan 384 ITR 200 dated May 11, 2016 (SC) 7. PTC Impex (India) Pvt. Ltd. vs. CIT, ITA No.2860/Del/2010 dated 03.04.2018 (Tribunal) 8. CIT vs. Infosys Technologies Ltd., 341 ITR 293 (Kar.) 9. Gee Vee Enterprises vs. Addl. CIT, 99 ITR 375 (Del.) 10. Perfetti Van Melle India Pvt. Ltd., ITA No.3046/Del/2016 fo....
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....o. 759/216, vide judgment and order dated 14th September, 2017. 8. If he analyze the aforesaid principle of law on the facts of the present case, we find that the assessee, who is a non resident and citizen of USA, had declared Long Term Capital Loss of Rs. 96,25,104/- on sale of various pieces of land to 32 parties, which was devolved upon him in family partition amongst brothers as per award of Sole Arbitrator way back in 28.11.1983. The assessee's case was selected for scrutiny precisely to examine the Long Term Capital Gain and the cash deposits in the bank account. Since the selection of the case was precisely on same issue, therefore, Assessing Officer had asked the assessee to submit various documents and details along with bank statement, copy of sale deeds, Valuation report, etc. to ascertain the value of the land as on 01.04.1981 and also to verify the source of cash deposits from the sale deed. In response, the assessee vide reply dated 03.11.2016 submitted a Valuation report of the Government Approved Valuer for determining the Fair Market Value of the property as on 01.04.1981. In the said valuation report, the registered valuer had mentioned that though no sale tra....
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....valuation report on his own and in case if he had any doubt, then he should have carried out some minimal inquiry himself to find out, whether Fair Market Value determined by the valuation officer as on 01.04.1981 is erroneous or not and then he could have held the said report is not reliable. Simply based on certain premise and presumption ld. CIT cannot reject the valuation report valued by an expert duly approved by the Government of India. From the perusal of the impugned order, it appears that one of the main charges of the ld. CIT is that, the Fair Market Value of the property as on 01.04.1981 has been inflated for which no inquiry has been done by the Assessing Officer. First of all, if the Government Approved Valuer on the basis of his own inquiry has ascertain the Fair Market Value and has given the range and has adopted the minimum rate prevailing at that time, then to hold that some further inquiry should have been done is not correct. And if he had any doubt then it was incumbent upon the ld. CIT to himself verify and could have conducted his own inquiry to bring something on the record that the valuation adopted by the registered valuer is not tenable or has been value....
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....per the Sale Deeds in only 1902.99 sq. mtrs The aforesaid figure of 2305.47 sq. mtrs. was including the common area. You will kindly appreciate that though in the Sale Deed the area was mentioned on net basis, the assessee had also utilized the area on common facilities like roads etc. and that area was also be considered for the purpose of determining the capital gain. It is also slated that sale consideration even on the basis of gross area i.e. 2305.47 sq.mtr. on average basis for the front area comes Rs. 6,678/- as against average rate of sale consideration of other area at Rs. 5,009/ -per sq. mtrs. The Valuer had mentioned the front area taking in strict view about it but actually the front area sold by the assessee including the common area was higher and since the assessee had charged higher rate from the customers for the front area, cost of acquisition has been considered at a higher rate in respect of total area sold including the common area. It may further be slated that as per details already submitted, there was capita loss of Rs. 96,25,108/- which has not even being earned over for set off in subsequent years in terms of provisions of Section 80 of the Act. ....