TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 1273
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....07.2017 declaring income of Rs. 1,54,420/-. Return was selected for limited scrutiny under CASS with the following reasons: (i) investment in immovable property; (ii) deduction/exemption from capital gains; and (iii) capital gains/loss on sale of property. 5. Statutory notices were issued and served upon the assessee and assessment was completed on an assessed income of Rs. 19,14,920/- after making an addition of Rs. 17,60,500/-. 6. Assuming jurisdiction conferred upon him by provisions of section 263 of the Act, the PCIT, Faridabad served a notice and after receiving the reply to the queries raised by the PCIT, directed the Assessing Officer to examine issue of taxation of capital gains arising from sale of land and availing exemption u/s 54B of the Act on purchase of land. 7. The Assessing Officer was further directed to enquire, examine, verify and investigate all the issues relating to the claim of exemption/deduction u/s 54B and 54F of the Act and directed the Assessing Officer to pass a fresh assessment order and recompute the income of the assessee after making enquiries as mentioned in the order u/s 263 of the Act. 8. Before us, the ld. counsel for ....
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....c as per Questionnaire by 22.07.19 failing which action will be taken as per law." 13. Third notice was issued on 16.10.2019 with the following question: "please refer to your last submission whereby you have just uploaded a few copies of sale/purchase of property, in this regard you are requested to kindly file your point wise reply as per questionnaire with complete details." 14. Fourth notice was issued on 06.11.2019 with the following question: "please refer to your last reply, you have not furnished the details regarding Investment made nor furnished the copies of deeds of purchases made, so, in this regard you are requested to categorically mention in your reply the details of sale of properties, amount, date of sale/purchase, area of land and amount of consideration also for the properties purchased along with copies of deeds and payment details date wise with complete narration." 15. Fifth notice was issued on 24.12.2019 with the following question: "please refer to your last reply kindly explain the purpose and basis for making agreement with the purchaser on the basis of some payment received immediately and mostly as PDC, Please give complete details alongwith c....
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....2016-17, details of sale consideration are as under: Copies of Sale deeds are already submitted for your reference. 2. hat I had claimed transfer expenses of Rs. 17,71,000/-on said sale transaction, documentary evidence is enclosed herewith as 'Annexure-1'. 3. That I had sold my agriculture land during the FY 2016-17. That out of total sale consideration of Rs. 17,77,40,000/-, I had received Rs. 3,82,37,600/- in FY 2016- 17 and remaining amount received as PDC Cheque dated 30/07/2018 of Rs. 13,77,25,000/- which was encashed in FY 2018-19. 4. That I had invested Rs. 15,09,24,500/- in agriculture land on the basis of PDC Cheque as payment was received in FY 2018-19. 5. That statement showing summary of exemption claimed under section 54F and 54B of the Income Tax Act, 1961 is enclosed herewith as 'Annexure-2'. 6. That explanation regarding exemption of Rs. 1,79,00,000/- claimed under section 54F of the Income Tax Act, 1961, I purchased a residential plot of land of Rs. 98,50,000/- and incurred Rs. 85,00,000/- on construction of residential Building, Copy of purchase deed dated 15-09-2016 and Copy of Valuation Report ....
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....y exemption benefit against the said purchases under the income tax. iv. That I had also relied on below judgments: HON'BLE HIGH COURT OF RAJASTHAN in case of Laxmi Narayan vs Commissioner of Income-tax, JP-II [2018] 89 taxmann.com 334 HON'BLE HIGH COURT OF DELHI in case of Commissioner of Income-tax-XII vs Kamal Wahal [2013] 30 taxmann.com 34. HON'BLE HIGH COURT OF PUNJAB AND HARYANA in case of Commissioner of Income-tax vs Gurnam Singh [2008] 170 Taxman 160 Copies of Orders are enclosed herewith. (Annexure-3) 4. That affidavit of my wife Smt. Bishembari Devi is enclosed herewith. (Annexure4) In view of above, your honour will find the above in order. Thanking You, (Raghubir Singh) Dated: 28-12-2019 21. Specific queries were raised by the Assessing Officer to which specific replies were filed by the assessee. 22. A perusal of the assessment order clearly shows that the Assessing Officer has made enquiry in respect of capital gains. In the light of the afore-stated facts the Hon'ble Supreme Court in Malabar Industrial Co. Ltd., 243 ITR 83, has laid down the following ratio: "A bare reading of section 263 of the Income-tax Act, 1961, makes it cl....
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.... accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualised where the Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested....
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....challenged before the court it would be open to the courts to examine whether the relevant objective factors were available from the records called for and examined by such authority. The Income-tax Officer in this case had made enquiries in regard to the nature of the expenditure incurred by the assessee. The assessee had given detailed explanation in that regard by a letter in writing. All these are part of the record of the case. Evidently, the claim was allowed by the Income-tax Officer on being satisfied with the explanation of the assessee. Such decision of the Income tax Officer cannot be held to be "erroneous" simply because in his order he did not make an elaborate discussion in that regard. Moreover, in the instant case, the Commissioner himself, even after initiating proceedings for revision and hearing the assessee, could not say that the allowance of the claim of the assessee was erroneous and that the expenditure was not revenue expenditure but an expenditure of capital nature. He simply asked the Income- 11 tax Officer to reexamine the matter. That, in our opinion, is not permissible. Hence the provisions of section 263 of the Act were not applicable to the instant c....
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....rted in 332 ITR 167 has held as held as under: "12. We have considered the rival submissions of the counsel on the other side and have gone through the records. The first issue that arises for our consideration is about the exercise of power by the CIT under s. 263 of the IT Act. As noted above, the submission of learned counsel for the Revenue was that while passing the assessment order, the AO did not consider this aspect specifically whether the expenditure in question was revenue or capital expenditure. This argument predicates on the assessment order, which apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However, that by itself would not be indicative of the fact that the AO had not applied his mind on the issue. There are judgments galore laying down the principle that the AO in the assessing order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission 14 that one has to keep ....