TaxTMI 
TaxTMI 
2023 (2) TMI 125
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....turn of income on 12.03.2018 declaring taxable income of Rs. 1,39,35,090/-. Return was selected for scrutiny under CASS and, accordingly, statutory notices were issued and served upon the assessee. 4. Vide notice dated 21.11.2019, the Assessing Officer sought the following information / documents from the assessee: "1. Please furnish brief Note on the business activities undertaken by you and sources of your income during the year under consideration. 2. Computation of income. 3. Details of all immovable assets sold or purchased during the year alongwith copy of Sale/Purchase Deed and also give sources of income for the purchase of Immovable assets. 4. Documentary evidence with regard to deductions claimed on transfer of Immovable/Capital assets, if any. Copy of bank statements giving narration of all debit and credit entries related to transfer of Immovable property/capital asset." 5. Again, vide notice dated 13.12.2019, the Assessing Officer sought the following details from the assessee : "1. On perusal of Return filed for the A Y 2017-18 and materials and documentary evidences available on record, it is observed that y....
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....decided exparte on the basis of material/information available on record u/s 144 of the Act to the best judgment of the undersigned. It may please be noted that no further adjournment shall be given as already sufficient time has been allowed to file your reply." 6. The assessee filed detailed reply and furnished all necessary documents sought by the Assessing Officer. Reply dated 25.12.2019 read as under: "That I have become the owner of plot bearing number 25/14 situated in the area of village Nangli Sakrawati Colony known as Nangli Vihar in Block 8 New Delhi - 110059 by virtue of gift deed entered on the 4th day o October 2011 by Smt. Radha P Patel in favour of me. Thus the immovable plot has come to n r existence by way of gift deed for which no money or any sore ot consideration were paid for purchase of the same, it is pertinent to mention here in the so-called plot measuring 455 square yards was originally purchased for Rs. 2,15,000 wide, have also been shown by me in my Statement of affairs as the cost of acquisition or - indexation as per Act has been done based on the same cost. That, the plot mentioned in Para (2) above have been compulsorily acquire....
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....ted the taxable income by observing as under: "6. Finally a Show cause notice was issued to the assessee on date 20/12/2019. The Assessee submitted her online reply to the show cause through e-proceedings on ITBA module. On verification of the documents submitted by assessee in response to the Show cause notice, it was observed that the assessee has claimed a deduction of Rs. 2,10,00,375 under section 54 from the Income under the head long term capital gains on account of purchase and construction of a residential house property. The source of funds for purchase and construction of the residential house came from the sale proceeds of an immoveable property sold by the assessee during the year. The Assessee duly submitted the proofs of purchase of the residential property in her name and the proofs of construction expenses incurred by her on the residential house property in order to claim the deduction under section 54 of Rs 2,10,00,375/- It was observed that the Assessee has spent an amount of Rs 45,00,000 on account of Purchase of a Residential Plot of land and further the assessee had spent an amount of Rs 1,65,00,000 on account of the various expenses....
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....representations filed in this office, on or before the said due date, then your personal attendance is not required You also have the option to file your submission from the e-filing portal using the ink incometaxindiaefiling.gov.in The assessment records of Rakshita Prabhudas Patel for the AY 2017-18 were called for and examined. 3. On perusal of the assessment record in the case of the assessee, it is noticed that the case of the assessee was selected for limited scrutiny through CASS for the reason-Large deduction/exemption claimed from capital gains. 4. On perusal of the assessment record, it is noticed that the assessee has earned income under the head Long Term Capital Gains of Rs. 1,35,23,142/- from the sale of an immovable property. The assessee has sold the property at a consideration of Rs. 3,48,31,638/- and claimed a deduction of Rs. 2,10.00,375/- u/s 54 of the IT Act, 1961, on account of purchase and construction of a residential property. The assessee has submitted that she had purchased a residential plot of Rs. 45,00,000/- and spent an amount of Rs. 1,65,00,000/-for construction the house. The AO has added an amount of Rs. 8,25,000/-, which....
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.... be had to section 263(1) of the Act. The provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer, it is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous ". 13. The Hon'ble Bombay High Court in the case of Gabriel India Ltd 203 ITR 108 has held as under: "The power of suo motu revision under subsection (1) is in the nature of supervisory jurisdiction and the same can be exercised only if the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to exercise power of revision under this sub-section, viz., (i) the order is erroneous; (ii) by virtue of the order being erroneous prejudice has been caused to the interests of the Revenue. It has, therefore, to be considered firstly as to when an order can be said to be erroneous. We find that the expressions "erroneous", "erroneous assessment" and "erroneous judgment" have been defined in Black's Law Dictionary. According to the definition, "erroneous" means "involving error; dev....
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....n also the power of suo motu revision cannot be exercised. Any and every erroneous order cannot be the subject-matter of revision because the second requirement also must be fulfilled. There must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. We, therefore, hold that in order to exercise power under sub-section (1) of section 263 of the Act there must be material before the Commissioner to consider that the order passed by the Income-tax Officer was erroneous in so far as it is prejudicial to the interests of the Revenue. We have already held what is erroneous. It must be an order which is not in accordance with the law or which has been passed by the Income-tax Officer without making any enquiry in undue haste. We have also held as to what is prejudicial to the interests of the Revenue. An order can be said to be prejudicial to the interests of the Revenue if it is not in accordance with the law in consequence whereof the lawful revenue due to the State has not been realised or ca....
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....two possible views and the Assessing Officer has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry. Our view is fortified by the decision of Hon'ble High Court of Bombay in the case of CIT vs. Nirav Modi, [2016] 71 Taxmann.com 272 (Bombay). 15. The Hon'ble High Court of Gujarat in the case of CIT vs. Nirma Chemical Works Ltd. 309 ITR 67 has observed as under: "if assessment order were to incorporate the reasons for upholding the claim made by an assessee, the result would be an epitome and not an assessment order. In this case, during the assessment proceedings for both the Assessment Years, the Assessing . A.Y. 2009-10 Officer issued a query memo to the assessee, calling upon him to justify the genuineness of the gifts. The Respondent-Assessee responded to the same by giving evidence of the communications received from his father and his sister i.e. the donors of ....