TaxTMI 
TaxTMI 
2021 (12) TMI 1073
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....I.T. Act 1961 the impugned order passed by the learned Pr.CIT being bad in law, null and void arbitrary, baseless, devoid of merits and without jurisdiction the same may please be annulled. 2. In the facts and circumstances of the case and in law, the learned Pr.CIT has failed to appreciate that the agricultural land transferred by the appellant as stock in trade of his business being not a capital asset within the meaning and provisions of Section 2[14] of the I.T. Act 1961, upon its sale no capital gains had arisen and hence all the observations and conclusions drawn by the learned Pr.CIT in this behalf being bad in law, null and void arbitrary, baseless, devoid of merits the same may please be vacated and the impugned revision order may pleas be annulled. 3. The learned Pr.CIT has grossly erred in holding that impugned Capital Gains had arisen on the date of conversion of the Capital gains and hence the deduction claimed by the appellant assessee u/s 54B was barred by limitation, by completely ignoring the provisions of Section 45[2] of the I,T. Act 1961. The claim of deduction made by the appellant assessee u/s 54B be allowed and all the observations and concl....
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....ther equitable and just order that may be deemed fit and proper by your honour may please be passed in the matter." 5. Briefly, the facts of the case are as under : The appellant is HUF engaged in the business developers and promoters of land. The return of income for the assessment year 2014-15 was filed on 29.11.2014 declaring total income of Rs. 1,48,230/-. The assessment, against the said return of income, was completed by the Income Tax Officer, Ward- 12(4), Pune ('the Assessing Officer') vide order dated 14.12.2016 passed u/s 143(3) of the Act accepting the returned income. 6. Subsequently, on examination of the assessment record, the ld. Pr.CIT formed an opinion that the claim for deduction u/s 54B of the Act of Rs. 4,69,91,740/- came to be allowed by the Assessing Officer without verification and enquiries. The ld. Pr.CIT, on perusal of the Balance Sheet as on 31.03.2014, observed that investment in land was made to the extent of Rs. 1,30,60,000/- and in purchase of another agricultural land. Accordingly, he concluded that the assessee had not invested the entire sale consideration in purchase of new agricultural land, therefore, he concluded that the Assessing Off....
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....e investments was made before the due date of filing of the return of income for the assessment year 2014-15. It is further submitted that the Balance Sheet as on 31.03.2014 was already filed before the Assessing Officer reflecting the re-investment of the sale consideration in purchase of another agricultural land and the claim was allowed by the Assessing Officer on being satisfied with the fulfilment of the conditions prescribed u/s 54B of the Act. It is further submitted that when the assessment order was passed after due enquiry on the issue, on being satisfied with the conditions of exemption allowed the claim and the assessment order cannot be termed as "erroneous" and "prejudicial to the interests of the revenue". It is further contended that there is no material on record to show that the appellant is not entitled for exemption u/s 54B of the Act. The power of revision cannot be exercised in order to carry out roving/fishing enquiry. 9. Without prejudice to the above, it is submitted that the land sold is not a capital asset within the meaning and the provisions of section 2(14) of the Act as the said lands were situated at the distance of more than 8 kilometres from th....
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....cer had carried out necessary enquiries and verification while allowing the claim of the assessee for deduction u/s 54B of the Act. We had examined the assessment record found that the Assessing Officer had called for the details of purchase and sale of the immovable transactions and examined the claim u/s 54B vide its notice dated 09.11.2016 u/s 142(1) and the assessee had filed a detailed reply explaining the nature of transactions. From the order of the assessment, it is clear that the Assessing Officer accepted the claim of the appellant by observing as under :- "04. ......... Apart from this assessee during the previous year relevant to AY 14-15 sold an agricultural land and capital gain on the said land is duly computed. Further investments made in new property deduction u/s 54B of the Act, is availed. The copies of agreements have been filed for verification. Details filed by the assessee have been verified and placed on record and the case is discussed and heard." From this very observation it cannot be said that the Assessing Officer had not examined the claim, therefore, the assessment order cannot be said to be erroneous for want of enquiry on the claim. 1....
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.... section 263, it is clear that the power of suo motu revision can be exercised by the Commissioner only if, on examination of the records of any proceedings under this Act, he considers that any order passed therein by the Income-tax Officer is 'erroneous insofar as it is prejudicial to the interests of the revenue'. It is not an arbitrary or unchartered power. It can be exercised only on fulfilment of the requirements laid down in sub-section (1). The consideration of the Commissioner as to whether an order is erroneous insofar as it is prejudicial to the interests of the revenue must be based on materials on the record of the proceedings called for by him. If there are no materials on record on the basis of which it can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, that ....