TaxTMI 
TaxTMI 
2021 (2) TMI 219
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.... 56(1)(vii)(b)(ii) of the Act, without appreciating the fact, that the assessee had entered into 'agreement to sale' for the purchase of said plots of land in FY 2013-14 and had also paid the entire purchase cost in FY 2013-14 through payee's a/c cheque. Appellant prays that as per proviso to sec 56(1)(vii)(b)(ii), in such cases the stamp value applicable would be the value as on the date on which `agreement to sale' was executed and not the date on which the deed was registered. Therefore, invoking sec 263 without appreciating these facts and without carrying out any verification to point that stamp value as on the date of agreement to sell was more than the purchase cost paid and thereby treating the assessment order as erroneous & prejudicial to the interest of Revenue, deserves to be held bad in law and thus may be quashed." 2. The ld. AR submitted that assessee is an individual and for the year under appeal has filed his return of income declaring total income at Rs. 10,02,280/-. The case of assessee was selected for scrutiny under CASS under limited scrutiny and one of the reasons was to examine the issue of purchases of property by the assessee during the ....
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....building 5. It would not be out of place to mention here that during the course of assessment proceedings, no discrepancy whatsoever was found so far as reasons at serial no. (1) and (iii) are concerned. Accordingly, focus of enquiries made during assessment was on serial no. (ii), i.e. Purchase of Property. During the course of assessment proceeding ld. AO after obtaining all the information with respect to the purchases of both the industrial plots has made necessary enquires and reached to the conclusion that assessee has claimed certain expenses towards the cost which he failed to justify and according same were disallowed. Assessee preferred appeal against such order before the ld. CIT(A) who has partly allowed the grounds taken by the assessee on this issue vide order dt. 26.9.2018 after thorough analysis of the facts. After the order of ld. CIT(A), the CIT(Adm.) has invoked the provisions of section 263 and issued the first notice on 5.4.2019 alleging the assessment order as erroneous. 6. In this regard, attention is invited to the provision of explanation (c) to sub-section of section 263 which reads as under: Revision of orders prejudicial to Revenue. 263. (1) The Co....
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....) to sub-section (1) of section 263 it is evident that it clearly debars the CIT to visit the issues which had been considered and decided in appeal. Since the issue regarding exact cost of purchase of property has been the subject matter of appeal as after examining the issue the ld. AO has altered the same and after going through the facts on record regarding purchase value of property and submission of assessee and duly considering various issue related to purchase of property, the ld. CIT(A) allowed part relief to the assessee. Thus, the subject matter of the order u/s 263 being on purchase of property, same already stood merged in the order of CIT(A) and therefore, the order passed by the CIT(Admn.) u/s 263 is without the authority of law and deserves to be held void-ab-initio. 9. Provisions embedded in explanation (c) to sub section (1) of section 263 find support form Doctrine of Merger, according to which, where an appeal or revision is provided against an order passed by a court, tribunal or any other authority before superior forum and such superior forum modifies, reverses or affirms the decision put in issue before it, the decision by the subordinate forum merges in th....
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....1,00,000/- Ch dtd. 01.06.13 Rs. 6,00,000/- Ch dtd. 11.07.13 Rs. 7,50,000/- Ch dtd. 06.08.13 Rs. 7,50,000/- Ch dtd. 07.08.13 Rs. 1,00,000/- Ch dtd. 07.10.13 37 2. G 100. Agro Food Park, M.I.A. Alwar 09.09.2013 28.04.2014 Rs. 50,000/- ch dtd. 6.05.2013 Rs. 2,50,000/- ch dtd. 25.05.13 Rs. 24,00,000/- ch dtd 10.09.13 Rs. 2 lac cash 14 14. With this background, it is submitted that during the course of assessment, ld.AO sought complete documents/information of above properties purchased, which comprised agreements to sell as well as registered sale deeds and documentary evidences in respect to expenses claimed (over and above sale consideration mentioned in sale deed) for both properties purchased. In fact, at page 2 of Assessment order, ld. AO has observed both the properties were registered at sub registrar II on 28.04.2014 at Rs. 29 lacs each. During the course of hearing, on enquiry, it was explained to ld.AO that no addition was called for in respect of difference between DLC value of properties purchased and sale consideration thereof as the date of agreement and date of registration was different and assessee had received part of sale consideration through account payee c....
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....sfer of such immovable property;] [8. Substituted by the Finance Act, 2013, w.e.f. 1-4-2014. Prior to its substitution, sub-clause (b), as substituted by the Finance Act, 2010, w.r.e.f. 1-10-2009, read as under: "(b) any immovable property, without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;"] 16. From perusal of above, it is evident that deeming provisions of section 56(2)(vii) regarding taxability of transfer of immovable property without consideration were brought on the statue book, by Finance (No.2)Act, 2009 w.e.f. 01.10.2009. Subsequently, clause (b) of the section was amended by Finance Act, 2013, w.e.f. 01.04.2014, which provided for taxability of even inadequate consideration in transfer of property. 17. So far as facts of the present case are concerned, part of the sale consideration was paid through banking channels before the date of agreement (as is evident from table at page 4 of this submission) and thus assessee was outside the purview of deeming provisions of section 56(2)(vii) by virtue of proviso thereof. 18. It is worthwhile to mention here that Ld. CIT(Admn.) in para 2 at page 3 of th....
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....ound of the case, it is humbly submitted that essential elements necessitated for invoking section 263 are not fulfilled. The basic ingredients to be fulfilled before invoking section 263 have been explained by the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. Vs. CIT reported in 243 ITR 83 (SC) in the following words: "A bare reading of section 263 of the Income Tax Act, 1961, makes it clear that the prerequisite for the exercise of jurisdiction by the Commissioner suo motu under it, is that the order of the Income Tax Officer is erroneous is so far as it is prejudicial to the interests of the Revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent - if the order of the Income Tax Officer is erroneous but is not prejudicial to the Revenue or if it is not erroneous but is prejudicial to the Revenue - recourse cannot be had to section 263(1) of the Act." 23. In fact, ld. CIT(Admn.) has relied upon the decision of Apex Court on the observation that "An incorrect assumption of facts or an ....
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....No.2690 & 2691/Mum/16 dated 06.05.2016 * Sanjeev Kr. Khemka vs Pr. CIT (Kolkatta ITAT) 27. It was further submitted that, the Hon'ble Bombay High Court in the case of CIT Vs. Gabrial India Ltd., reported in 203 ITR 108, has held that, "CIT cannot revise order merely because he disagrees with the conclusion arrived at by the ITO". Further, in the case of CIT Vs. Sunbeam Auto Ltd., reported in 227 CTR 133, the Hon'ble Delhi High Court drew a distinction between "Lack of inquiry" and "inadequate enquiry" and held that, 'in the case of inadequate enquiry, provisions under section 263 cannot be invoked.' It may however, be noted that the instance case is neither the case of inadequate enquiry nor lack of enquiry during assessment proceedings as it can be seen that due, necessary and most pertinent enquiries to all the issues emerging from the return filed by the assessee were conducted by the Ld. AO. Therefore, in view of such legal position, no action u/s 263 could have been taken. 28. It is thus submitted that for the sake of clarification and at the cost of repetition it is submitted that twin conditions as laid down u/s 263 i.e. erroneous and prejudicial to the interest of the r....
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....passed an order dated 26.09.2018. It was accordingly submitted that the subject matter of the impugned proceedings u/s 263, being related to purchase of property, stood merged with the order of ld. CIT(A) and therefore, the order passed by the ld. Pr. CIT is without any authority of law. We are however, not in agreement with the contention so raised by the ld. AR. We find that the subject matter of examination by the Assessing Officer was limited to the expenses which have been incurred in relation to these industrial plots however as far as the applicability of provisions of section 56(2)(vii)(b)(ii) of the Act is concerned, there is no material available on record that the Assessing Officer has carried out any inquiry/examination and sought any explanation from the assessee. Where the matter relating to applicability of provisions of section 56(2)(vii)(b)(ii) of the Act has not been examined by the AO and not subject matter of assessment order, there is no question of application of theory of merger with that of the order of the ld CIT(A) as so contended by the ld AR. We therefore find that it is a clear case where the applicability of provisions of section 56(2)(vii)(b)(ii) of t....