2024 (5) TMI 96

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....a) investment in immovable property; (b) claim of deduction on capital gains. The assessment was completed at the returned income accepting the explanations and evidences furnished by the assessee on several dates, the last of which is dated 22.02.2021. The operative part of the assessment order reads as under: - 4. In response to the notice issued the assessee stated that "I have sold an agricultural land for Rs. 9,00,00,000/- and capital gain on the above transaction comes to Rs. 8,14,19,048/-. I have invested Rs. 8,21,50,000/-. I am eligible to get exemption on capital gain u/s. 54B as I have invested the capital gain for purchase of new asset." 5. Relying on the explanation and documentary evidences submitted, the assessee's clarification has been accepted. The data pertaining to the assessee has been collated and re-examined. After due diligence, the assessment is completed accepting the returned income that was shown by the assessee. (emphasis, ours) 3. Subsequently, the ld. Pr.CIT called for and examined the assessment records. The following two aspects had been omitted to be verified by the Assessing Officer (AO), integral to the claim of d....

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....ions in Rampyari DeviSaraogi v. CIT [1968] 67 ITR 84 (SC) and Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 (SC), held that where a sum not earned by a person is assessed as income in his hands on his so offering, the order passed by the AO accepting the same would be subject to sec. 263. The decision by the Hon'ble jurisdictional High Court, reported at [1992] 198 ITR 611 (Ker), holding the assessment as without application of mind, was, accordingly, affirmed. Absence or lack of enquiry is an attribute, a manifestation, of this non-application, so that an order imbued therewith would be liable to revision. This represents trite law, since co-opted on the Statute itself vide Explanation 2(a) to s. 263(1). In Gee Vee Enterprises v. Addl. CIT [1975] 99 ITR 375 (Del), again with reference to judicial precedents, it stands explained that the order of the AO becomes erroneous on a failure to make enquiry where the circumstances call for it. This is not because there is anything wrong in the order if all the facts stated there in are assumed to be correct. However, the AO is not only an adjudicator but also an investigator and, therefore, cannot remain passive in the face of a return which....

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....eriod of three years of its purchase, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be reduced, by the amount of the capital gain. (2) The amount of the capital gain which is not utilized by the assessee for the purchase of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already uti....

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....ay proceed further. 4.5 Perusal of the revision order reveals the following aspects of assessment: (a) True, the payment of Rs. 52 lakhs comprising a part of the purchase consideration of Rs. 691.50 lakhs, stands made on 17/10/2018. The question, however, would be, the satisfaction of the condition of s. 54B(2), to which exemption of capital gain u/s. 54B(1) is subject, and qua which there is no finding by the AO. In fact, the issue of satisfaction of the condition of s. 54B(2) would extend to the entire sale consideration of Rs. 9 cr. (b) There is then the question of the purchase of this land being complete, in view of it being per an agreement to sell, which has to translate into an agreement of sale/sale deed. This becomes relevant in view of the changed position of law by the enactment of Registration and Other Related Laws (Amendment) Act, 2001, with simultaneous and consequential amendments in Transfer of Property Act (s. 53A); Indian Registration Act, 1908 (ss. 17 & 49), even as clarified in CIT vs. Balbir Singh Maini [2017] 398 ITR 531 (SC). That apart, there is nothing, other than a bald claim, of the assessee being in possession and enjoyment of the ....