TaxTMI 
TaxTMI 
2022 (6) TMI 403
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.... expenses and in exchange were entitled to only part of the project and not the whole land. (iii) For that the Ld. CIT erred in assuming jurisdiction u/s. 263 when there was no purchase or transfer of any property so as to apply the provisions of section 56(2)(vii) since only the development agreement was executed. And thereafter there was no further act, nor any sanction of plan, the assessee did not received possession and hence, assessment order was neither erroneous nor prejudicial to the interest of the revenue. (iv) For that the Ld. CIT erred in holding the view that provision of section 56(2)(vii) was applicable when the same is applicable only if the assessee received any immovable property when the assessee did not receive any immovable property being land or building. (v) For that the Ld. CIT erred in holding that the assessment completed u/s. 143(3) was erroneous and prejudicial to the interest of revenue on the fact that the advance paid to landlord was shown as "Advance for Land" and not as "Stock-in-trade" whereas the money paid to landlord was actually the refundable deposit. (vi) For that the Ld. CIT erred in not accepting the exp....
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..../The developers has not been registered in any form' or under any act etc They are individuals. The landlords had transferred the above property to the developers (assessee along with 2 others) for construction of a multi-storied building; the sole purpose of which is to sale to customers by the three developers 1/3rd of the property (33.33%) was transferred to the assessee. An amount of Rs. 1.50 crore was paid to the landlords by the developers of which an amount of Rs. 50 lakh (1/3rd) being his share was paid by the assessee. The assessee did not disclose anything with regard to the property in his return. However, the Assessing Officer did not consider the purchase under the above stated section and allowed the inadequate consideration which resulted in underassessment of income by Rs. 2.38 crore (2,88,22,020 - 50,00,000) and thereby undercharge of tax amounting to Rs. 65,27 lakh (49.07 + 16.19). Under assessment of income/capital gain Rs.2,38,22,020/- Undercharge of tax 47,64,404/- Edu cess 1,42,932/- Total undercharge of tax 49,07,336/- Interest (234B) 16,19,420/- Total Tax 65,26,756 In this regard, it....
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....nce with you. Due to COVID-19, you may submit your written submission through official e-mail: [email protected]." 6. During the course of revisionary proceedings, it was submitted that the agreement entered between Mr. Mahendra Pratap Singh and the assessee was in the nature of development agreement and it was not purchase agreement. It was also submitted that no development work was taken up during the year and subsequently, the assessee received back his investment in the property. All these details were also called for by the Ld. AO and were verified. However, Ld. PCIT was not satisfied with the submissions and came to a conclusion that Ld. AO passed assessment order without making any enquiry or independent verification and accordingly exercised the jurisdiction conferred by Section 263 of the Act and set aside the assessment order with direction to the Ld. AO to pass an order in light of the observations made in the impugned order. 7. Aggrieved, the assessee is in appeal before the Tribunal. Ld. Counsel for the assessee reiterated the submissions made by the assessee before the Ld. PCIT during the revisionary proceedings. Reference was also made to various ....
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....upra) held that this phrase i.e. "prejudicial to the interests of the revenue" has to be read in conjunction with an erroneous order passed by the Ld. AO. Their Lordship held that it has to be remembered that every loss of revenue as a consequence of an order of Ld. AO cannot be treated as prejudicial to the interests of the Revenue. When the Ld. AO adopted one of the courses permissible in law and it has resulted in loss to the revenue, or where two views are possible and the Ld. AO has taken one view with which the Ld. PCIT does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue "unless the view taken by the Ld. AO is unsustainable in law". 10. Keeping the aforesaid judicial position of law in mind, we note that Ld. PCIT has alleged lack of enquiry on the part of Ld. AO to examine the transaction entered into by the assessee along with other two persons with Mr. Mahendra Pratap Singh and Mr. Abhisekh Kumar Singh. After going through the observation of the Ld. AO, details filed by the assessee in the paper book including the development agreement dated 28.08.2015 placed at page 6 to 47, detailed submissions made before the Ld. PCIT....