TaxTMI 
TaxTMI 
2022 (3) TMI 1440
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....aw. 2. That on the facts and in the circumstances of the case and law, the Ld. Pr. CIT grossly erred in passing the order under section 263 even though the assessment order under section 143(3) dated 28th December 2018 passed by the Assessing Officer (AO) was neither erroneous nor prejudicial to the interest of the Revenue. 3. That on the facts and in the circumstances of the case and law, the AO after due examination of the relevant facts having already followed one of the courses permissible in law, the Ld. Pr. CIT was unjustified in setting aside the assessment for computing book profit under section 115JB of the act by making the addition of Rs.2,28,88,803/- for interest on service tax disallowed in computing income under normal provisions of the act. 4. That the Appellant having applied for Vivad Se Vishwas Scheme on the issue of addition under section 50C of the Act on the difference in sale consideration as per sale deed and the stamp duty value determined by the Addl. District Registrar and paid due tax thereon, which fact was brought to the notice of the Ld. Pr. CIT by filing evidence thereof, Ld. Pr. CIT thereafter was unjustified in setting asi....
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.... at Rs.8,07,33,801/-. The case of the assessee was selected for scrutiny assessment and notice u/s 143(2) & 142(1) of the Act, were issued and served upon the assessee. The ld. Assessing Officer has passed the assessment order u/s 143(3) of the Act on 28/12/2018 and determined the taxable income of the assessee at Rs.10,62,30,364/-. 4. The ld. Commissioner perused the assessment record and formed an opinion that action u/s 263 of the Act is required to be taken because the assessment order is erroneous one, which has cause prejudice to the interest of the revenue. Therefore, he issued a showcause notice u/s 263 of the Act on 12/03/2021. Copy of the showcause notice is available at page nos. 23 & 24 of the paper book. The ld. Commissioner thereafter issue two more showcause notices u/s 263 of the Act. Copy of these showcause notices are available at page nos. 31- 32 & 41-42 of the paper book. For better appreciation of the facts and circumstances, we deem it proper to take note of these showcause notices which read as under:- 5. Though the ld. Commissioner had issued three showcause notices but ultimately in the concluding paragraph of the impugned order he has relegated the i....
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....ee has raised certain grounds of appeal which do not arise from the impugned order. The ld. Commissioner has remitted the issues discussed in paragraph no. 2 of the impugned order and in this paragraph the issues are only qua the first notice issued u/s 263 of the Act. The ld. Counsel for the assessee while impugning the order of the ld. Commissioner contended that the first issue raised by the ld. Commissioner is that the assessee had made a provision for interest on service tax amounting to Rs.2,28,88,803/-. This provision ought to have been added back to the book profit while computing such book profit for the purpose of Section 115JB. He submitted that the ld. Commissioner was of the view that it is a contingent liability and, therefore, it should form part of the book profit. The ld. Assessing officer has rightly not included it in the book profit because the Commissioner Service Tax, Kolkata, had adjudicated this controversy and confirmed the demand as well as the interest payable by the assessee. For buttressing this aspect, he drew our attention to the order of the Commissioner Service Tax, Kolkata, which is available at page number 215 of the paper book. In the concludi....
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....sideration for the purpose of computation of capital gain u/s 48 would be deemed equivalent to the amount calculated by the Stamp Valuation Authority for the purpose of charging the stamp duty. He submitted that the assessee has not sold land or building. It has only assigned parking Part-II [Parking space] Right to park in 26 (twenty six) spaces for parking of medium sized car in or about the Building having cemented floor 11. With regard to this issue, the ld. Counsel for the assessee has raised two submissions. That Section 50C contemplates that when a house property including land or building or both are being sold then full sale consideration would be deemed equivalent to the amount on which the stamp duty has been paid. In other words, whatever may be the sale consideration received by the vendor such sale consideration for the purpose of computation of capital gain u/s 48 would be deemed equivalent to the amount calculated by the Stamp Valuation Authority for the purpose of charging the stamp duty. He submitted that the assessee has not sold land or building. It has only assigned parking Part-II [Parking space] Right to park in 26 (twenty six) spaces fo....
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.... Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under section 120; (b) "record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the ....
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.... authoritative pronouncements including the decision of Hon'ble Supreme Court in the case of Malabar Industries 243 ITR 83 and has propounded the following broader principle to judge the action of CIT taken under section 263. (i) The CIT must record satisfaction that the order of the AO is erroneous and prejudicial to the interest of the Revenue. Both the conditions must be fulfilled. (ii) Sec. 263 cannot be invoked to correct each and every type of mistake or error committed by the AO and it was only when an order is erroneous that the section will be attracted. (iii) An incorrect assumption of facts or an incorrect application of law will suffice the requirement of order being erroneous. (iv) If the order is passed without application of mind, such order will fall under the category of erroneous order. (v) Every loss of revenue cannot be treated as prejudicial to the interests of the Revenue and if the AO has adopted one of the courses permissible under law or where two views are possible and the AO has taken one view with which the CIT does not agree. If cannot be treated as an erroneous order, unless the view taken by the AO is u....
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....ade a provision and if that provision is not unascertained liability then book profit computed by the assessee as shown in the statement of profit and loss account would be increased by such unascertained liability for which a provision has been made. Thus, if the interest liability for which a provision has been made by the assessee is to be treated as a contingent liability then the assessment order would be suffering from an apparent error. The question before us is whether, it is a contingent liability or not. A competent authority under the Service Tax has adjudicated the proceedings and quantified the demands required to be made. In other words the Commissioner Service Tax, Kolkata, has passed an executable order on the basis of which a demand can be recovered from the assessee. If that be so, how the interest liability for which a provision has been made can be construed as a contingent liability. The only reasoning available at the end of the revenue is that the assessee has challenged the order in higher appellate forum. But that would not absolve the assessee from making the payments on the basis of this order during pendency of any appellate proceedings. The revenue has ....
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....et but it is not absolute transfer of land or building or both. Therefore, Section 50C is not applicable as it is common parking space in an office premise. It is to be appreciated that parking space has to be assigned and not to be sold. Though there is a very narrow distinction between the both because if it is to be sold by the vendor, the vendee may erect a structure after obtaining the absolute right of such space. Therefore, parking spaces are not subject to sale and a rather assigned. If some structure is erected it could create problem for the co-users of the parking space. If this aspect has to be viewed with the above angle the, it will show that ld. Assessing Officer has taken a plausible opinion. There might be a debate on such opinion but there should not be any action u/s 263 of the Act. Therefore, on the second point also the order of the ld. Commissioner, is not sustainable. 19. As far as the other show cause notices issued by the ld. Commissioner and discussed in the impugned order are concerned, on these show cause notices, he has not issued any specific directions for the assessing officer. One way to appreciate this situation would be that he might be satisfi....
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....sment order passed u/s 143(3) of the IT Act, 1961 on 28.12.2018 for A.Y. 2016-17 is, prima facie, erroneous in so far as it is prejudicial to the interests of the revenue for the following reasons completed at a In the instant case, the assessment was of total income Rs. 10,62.30.364/-. The provision for interest on service tax of Rs.2.28.88,803/ deserves to be added to book profit while computing MAT and the same has not been done by the AO this resulted in under assessment of income. AO has passed the impugned assessment order without conducting any enquiries or verifications which should have been made in this case. 2. Having regard to the facts and circumstances of the case and in law and in accordance with the provisions of Sec. 263(1) of IT Act. 1961 you are hereby given an opportunity of being heard to show cause as to why the impugned assessment order passed u/s 143(3) on 28.12.2018 for A.Y. 2016-17 should not be held as erroneous in so far as it is prejudicial to the interests of the revenue. You may accordingly furnish your written submissions u/s 263(1) of 1961 by 16.03.2021 in this regard. elaborating and/or evide....
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....ubmissions. Considering the pandemic situations arising due to COVID-19, physical attendance is not considered necessary and you are requested to make written submissions with necessary details through E-mail ID: [email protected] and it will be treated as compliance to this notice u/s.263(1). SAMAR BHADRA PCIT, Kolkata-1 (In case the document is digitally signed please refer Digital Signature at the bottom of the page) Document 4 To INCOME THE INPARTHE GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX PCIT, Kolkata-1 INTELLIGENT INFRASTRUCTURE LIMITED 3/1 DR UN BRAHMACHARI STREET, KOLKATA 700017,West Bengal India PAN: AABCP8597P Assessment Year: Dated: 2016-17 DIN & Letter No: 26/03/2021 ITBA/COM/F/17/2020-21/1031799618(1) Sir/Madam/ M/s. Subject: Communication with Government departments and authorities INCOS MENT fa/Sub: Revised Show Cause notice u/s 263(1) of the IT Act, 1961 in respect of assessment order for A.Y. 2016-17 - Matter Regarding Whereas the undersigned had called for and examined the reco....