AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2022 (1) TMI 1190
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssive. 3. The Principal Commissioner of Income Tax-2, Nagpur erred in not allowing relief U/s. 54 as well as index cost of acquisition, improvement and also purchase cost, which was allowed by the assessing officer and considered in the original assessment passed U/s. 143(3) of the Income Tax Act, therefore ex-party order passed is unjustified, unwarranted and excessive. 4. The Principal Commissioner of Income Tax-2, Nagpur has not granted reasonable opportunity to being heard before passing ex-party order, therefore, ex-party order passed is unjustified, unwarranted and excessive. 5. The Principal Commissioner of Income Tax-2, Nagpur erred in not considering the entire written submission of the assessee and passed the order U/s. 263(1) without going into merits of the case, therefore order passed is illegal, invalid and bad in law. 6. The Principal Commissioner of Income Tax-2, Nagpur erred in not considering the issue which was already discussed in the assessment order as well as entire detail explained before the assessing officer and said investment was duly reflected in the sale deed dated 06/06/2014 and same was also verified by the assessi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....its. On the above mentioned preposition assessee placed reliance on 1) Judgment of Hon'ble Supreme Court of India dated 08/03/2021 vide Suo Motu Writ Petition (Civil) No. 3 of 2020. 2) AIR 1981 SC - 1400 RAFIQ AND ANOTHER -VS.- MUNSHILAL 85 OTHERS 3) (1998) 7 SUPREME COURT CASES 123 N. BALKRISHNAN -VS.- M. KRISHNAMURTHY 4) 167 ITR 471(SUPREME COURT) COLLECTOR LAND ACQUISITION Vs. Smt. Katiji & OTHERS 5) 172 ITR 331 (M.P. HIGH COURT) MAHAVEER PRASAD JAIN -VS.- COMMISSIONER OF INCOME TAX 6) 133 ITR 339 (NEW DELHI) AUTAR KRISHNADAS -VS.- COMMISSIONER OF INCOME TAX Prayed: It is, therefore, humbly prayed that delay in filing of appeal by 210 days may kindly be condoned. 3. On the other hand, the ld CIT- DR opposed the prayer but could not rebut the facts submitted by the assessee before us for seeking condonation of delay. 4. We have heard the rival contentions and pursued the material available on record. There is no dispute and is an admitted fact that there has been a delay in filing the present appeal by 210 days. There is also no dispute that under section 253(5) of the Income Tax Act, 1961 (in short....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elay more so considering the fact that it has applied for settlement of present dispute and payment of appropriate taxes. Therefore, in the factual matrix of the present case, we find that there exists sufficient and reasonable cause for condoning the delay in filing the present appeal and as held by the Hon'ble Supreme Court, where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserved to be preferred. 6. In light of aforesaid discussions, in exercise of powers under section 253(5) of the Act, we hereby condone the delay in filing the present appeal as we are satisfied that there was sufficient cause for not presenting the appeal within the prescribed time and the appeal is hereby admitted for adjudication on merits. 7. The brief facts of the case are that the assessee has filed his return of income on 22/02/2016 declaring total income of Rs. 1,96,110/-. The case of the assessee was selected for limited scrutiny and finally the assessment was completed U/s 143(3) of the Act vide order dated 28/11/2017 enhancing the returned income at Rs. 7,07,915/-. Later on, the ld. Pr.CIT invoked provisions of Section 263 o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dings, specific stand has been taken by the assessee that the assessee had entered into an agreement of sale of plot in the F.Y. 2013-14 for Rs. 61,00,000/- lacs. Though, the sale deed was executed in F.Y. 2014-15 with market value of the plot at Rs. 70,61,000/-, therefore, while calculating the capital gains, the assessee has taken the stamp value and the actual amount settled for the sale of the plot at Rs. 61,58,000/-. As far as acquisition of the plot in question is concerned, it was categorically stated by the assessee that the said plot was an ancestral property of the assessee and he got the same from his father. The said fact has also been mentioned in the records, which have already been placed on record by the assessee and the assessee has taken cost of acquisition on estimated basis at Rs. 31,660/- being valuation as on 01/4/1981. The assessee had also placed on record copy of ITR filed alongwith computation of income before the ld. Pr.CIT. After perusal of the sale deed dated 06/06/2014, we noticed that the sale consideration got by the assessee is only by way of book adjustment towards the cost of apartment No. 102 in the proposed scheme on the above said plot to be co....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in nature itself indicates that view taken by Assessing Officer at relevant time was unsustainable in law - Whether since two views existed on word 'profits' in proviso to section 80HHC(3), on day when Commissioner passed his order and moreover mechanics of section have become so complicated over years that two views were inherently possible, subsequent amendment in 2005 even though retrospective would not attract provision of section 263, particularly when one had to take into account position of law as it stood on date when Commissioner passed order in purported exercise of his powers under section 263 - Held, yes" We also draw strength from the decision of Hon'ble Bombay High court in the case of Commissioner of Income Tax -Vs.- Garbrial India Ltd. (1993) 203 ITR 0108 (Bom. HC) wherein the Hon'ble Bombay High Court has held as under: "13. We, therefore, hold that in order to exercise power under sub-section (1) of section 263 there must be material before the Commissioner to consider that the order passed by the ITO was erroneous insofar as it is prejudicial to the interests of the revenue. We have already held what is erroneous. It must be an order which is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the whims or caprice of the revising authority. There must be materials available from the records called for by the Commissioner. 14. We may now examine the facts of the present case in the light of the powers of the Commissioner set out above. The ITO in this case had made enquiries in regard to the nature of the expenditure incurred by the assessee. The assessee had given detailed explanation in that regard by a letter in writing. All these are part of the record of the case. Evidently, the claim was allowed by the ITO on being satisfied with the explanation of the assessee. Such decision of the ITO cannot be held to be 'erroneous' simply because in his order he did not make an elaborate discussion in that regard. Moreover, in the instant case, the Commissioner himself, even after initiating proceedings for revision and hearing the assessee, could not say that the allowance of the claim of the assessee was erroneous and that the expenditure was not revenue expenditure but an expenditure of capital nature. He simply asked the ITO to re-examine the matter that, in our opinion, is not permissible. Further inquiry and/or fresh determination can be directed by the Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....5JB, of the Income-tax Act, 1961 - Revision - Of order prejudicial to interest of revenue - Assessment year 2002-03 - For relevant assessment year, assessee-company filed its return declaring loss of Rs. 4.70 crores - Assessment order under section 143(3) was passed and income was assessed at Rs. 11.3 crores - Commissioner set aside assessment order in exercise of power under section 263 mainly on two grounds, firstly, excess deduction had been allowed to assessee under section 80-IA and, secondly, provision for doubtful debts at Rs. 818.03 lakhs, debited in profit and loss account was not added back for calculating book profit under section 115JB - However, few days before this order of Commissioner, Assessing Officer had passed order under section 154 wherein purported mistake in regard to deduction under section 80-IA, had been corrected - On appeal, as regards first ground, Tribunal held that original assessment order was no longer in existence as it got merged with order under section 154 passed by Assessing Officer and, in such a situation, Commissioner could not exercise his jurisdiction under section 263 - As regards second ground, Tribunal relied upon judgment of this Cour....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ies with the assessee, it remains to be seen whether the provisions of section 209(3) mandating mercantile system of accounting for corporate assessees overrides the provisions of section 145. There is no warrant for coming to such a conclusion. There is no quarrel with the proposition, that provisions of the Income-tax Act have to be interpreted and implemented in consonance with the provisions of general law, which includes the Companies Act. But the question, however, is whether a provision of general law can override a specific provision of the Income-tax Act, like section 145 in the present case. The matter would be different, if there was no specific provision under the Income-tax Act. In that situation, one could go by the general enactment. But, when there is a specific provision under the Income-tax Act, the said provision could not be fettered by any provision under the general enactment, like, in the present case, the Companies Act. Even after the amendment of section 145 by the Finance Act, 1995, with effect from 1-4-1997, the assessee is left with the choice of following either mercantile system of accounting or cash system of accounting. If the Legislature intended to....