TaxTMI 
TaxTMI 
2022 (7) TMI 118
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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. It may please held that the long term Capital Gains arising on transfer of agriculture land are exempt from taxation and conclusions in this behalf drawn by the learned Pr.CIT may please be vacated. 4. It may please be held that the provisions of Section 54 to 54GB of the I.T. Act 1961 are the deductions prescribed for calculation of Capital Gains and the same are not provisions of exemptions as has been erroneously held by the learned Pr.CIT. It may please be held that the deduction prov....
X X X X Extracts X X X X
X X X X Extracts X X X X
....able and just order that may be deemed fit and proper by your honour may please be passed in the matter." 3. 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 2016-17 was filed on 17.10.2016 declaring total income of Rs.6,45,270/-. 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 28.12.2018 passed u/s 143(3) of the Act at total income of Rs.1,92,17,316/-. 4. 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.1,27,85,612/- came to be allowed by the Assessing Officer without verification and enquiries. The ld. Pr.CIT, on perusal of assessment record, it is observed that exemption u/s 54B in purchase of another agricultural land was made and allowed by Assessing Officer. 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 Officer, without carrying out the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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. 7. 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 the boundaries of Pune Municipal Corporation. Furthermore, on date of conversation of said land into stock in trade, the property was undoubtedly agricultural land. It was further submitted that during the course of assessment proceedings, the assessee vide letter dated 07.06.2018, 04.12.2018, 19.12.2018 and 21.12.2018 filed fu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ice dated 03.03.2015 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 :- "In support of the same, the assessee has filed copy of valuation report for claimed cost of acquisition & copy of Index-II in respect of investments of agricultural land claimed u/s 54B of the Act. The same has been kept on record." 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. 10. The courts have made a distinction between "lack of enquiry" and "inadequate enquiry". If there was enquiry even an inadequate that would be itself give no occasion to the Commissioner to exercise the power of revision u/s 263 as held by the Hon'ble Bombay High Court in the case of CIT vs. Gabriel India Ltd., 203 ITR 108 (Bombay) and followed by the Hon'ble Delhi High Court in the case of CIT vs. Sunbeam Auto Ltd., 332 ITR 167 (Delhi) and in the case of CIT vs. Anil Kumar Sharma, 335 ITR 83 (Delhi). The rel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....neous 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 stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity. [See : Parashuram Pottery Works Co. Ltd. v. ITO[1977] 106 ITR 1 (SC) at page 10]. ......" 11. Further, we find that the ld. Pr.CIT had not brought on record any material to show that the claim made for deduction u/s 54B is not allowable to the assessee. The power of revision u/s 263 cannot be exercised with a vi....