TaxTMI 
TaxTMI 
2021 (10) TMI 405
X X X X Extracts X X X X
X X X X Extracts X X X X
....ter making enquiries on the points set out in the notice which are stated to be already examined and considered during the original assessment proceedings concerning A.Y. 2016-17. The assessee has challenged the assumption of jurisdiction by the PCIT under section 263 of the Act on the ground that the Assessment Order under revision is neither erroneous nor prejudicial to the interest of the revenue. 3. The background facts leading to revision are that the return of income of the assessee was subjected to assessment proceedings for the A.Y. 2016-17 in question and the assessment was completed under section 143(3) of the Act dated 24.10.2018. The PCIT called for the examination of assessment records and was of the opinion that the assessment order so passed is erroneous in so far it is prejudicial to the interest of the revenue for the reasons that the A.O. has failed to make proper enquiries in respect of nature & character of income arising on co-ownership sale of land. The PCIT opined that the facts in the case of the assessee suggests that the profit arising on sale of land in question has given rise to 'business income' as against the 'capital gains' claimed by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cord that the intention of the assessee was not to perform any agricultural activity on the land and investment in agriculture land. The intent and purpose for purchasing the land, after conversion of land use for residential purpose and selling it of such land can by no means qualify for LTCG. Here it is worthwhile to mention and reproduced section 2(13) of IT Act: which states as under: Business includes any-trade, commerce or manufacturing or any adventure or concern in the nature of trade, commerce or manufacture. The issue was to what should constitute as adventure in the nature of trade, has been considered and examined by various higher courts. Hon'ble Supreme Court in its judgment in the case of CIT vs. M/s. Sutlej Cotton Mills Supply Agency Lt. 100 ITR 706 has held that "if the dominant intention was to carry on an adventure in the nature of business, the profit can be taxed". Since it is proved that the intention of the assessee was to earn profit from transaction of purchase and sale of agriculture land, profit earned can be taxed from sale of such agricultural land as business income. Further the Hon'ble Supreme Court in the case of G. Venkat swani/Naidu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g non-disclosure of investment in shares in the books of accounts, remained to be examine during the course of assessment proceeding, the assessment order is erroneous and prejudicial to the interest of revenue, the same needs detailed verification enquiry. 3. In view of these facts, there is no documentary evidence to satisfactorily explain the nature and source of cash transaction/contract receipts. Consequently, there is no proper verification made by the AO in this case. 4. Hence, there is no application of mind on the part of the AO to correctly tax the income of the assessee in the return of income and therefore, the assessment order passed u/s. 144 of the Act is erroneous in so far as it is prejudicial to the interest of revenue. Therefore, in exercise of the powers conferred on me by section 263 of the I.T. Act, 1961, I propose to suitable revise the order u/s. 263, which may include setting aside the order as such. Accordingly, an opportunity is being extended to explain your case along with details, documents and necessary evidences. An absence of any submission or reply shall lead to the conclusion that you have no objection for the proposed action and the proceedi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....leted the assessment proceedings after verification of documents and the assessment was completed by adopting one of the possible and plausible view towards nature & character of income which is, typically, a debatable issue and is subject matter of litigation in many cases. Thus, the opinion formed by the A.O. on the character of income i.e. whether taxable under 'business income' under the head 'capital gains' is a matter of subjective opinion having regard to the facts of a given case. The PCIT under section 263 of the Act could not have invoked revisional powers to substitute his opinion on debatable issue without showing as to how the A.O. was in legal error in adopting one of the plausible views. The decision of the Hon'ble Supreme Court in CIT vs. Green World Corporation (2009) 77 CCH 449 was relied upon. A reference was also made to the decision of the Tribunal in the case of Minal Nayan Shah vs. PCIT (2019) 180 ITD 149 (Ahd.), Torrent Pharmaceuticals vs. DCIT (2018) 173 ITD 130 for the proposition that a plausible view taken in exercise of quasi judicial function cannot be dislodged in a light hearted manner in the name of inadequacy in enquiries or ver....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n incurred. It is the claim of the assessee that the gain has arisen to the assessee due to efflux of time without any specific efforts and because of meteoric rise in value of land parcels arising to every land owners on account of unprecedented development of Raipur City. 8.1. When, we see the facts in its natural perspective, the characterisation of the income as 'capital gain' in the given facts, looks quite plausible. It cannot certainly be branded as an issue free of any debate. The law is well settled that where the A.O. has taken a view which is plausible in law, cannot be displaced and substituted by the subjective view of a superior authority. In the instant case, the PCIT has not shown as to how the A.O. has gone wrong while admitting the nature of income declared by the assessee. There is nothing on record to show that the A.O. acted arbitrarily in exercise of quasi judicial powers. The A.O. had merely adopted one of the courses permissible in law and backed by a long line of judicial precedents holding such income to be capital gains. In contrast, the PCIT has adopted erroneous measurement of land giving the impression of large parcel of land which is not true....