TaxTMI 
TaxTMI 
2024 (1) TMI 1485
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....holding that decision of Assessing Officer cannot be treated as erroneous and prejudicial to the interest of revenue even though the AO has not made enquiry which should have been made in respect of the deduction claimed u/s 54B of the Act in the light of the fact that the assessment order was passed without proper application of mind in the absence of relevant documentary evidence regarding agricultural use of said land in the period of two years preceding the date of sale, rendering the assessment order erroneous in so far as it is prejudicial to the interest of Revenue in terms of Explanation 2(a) to section 263(1) of the Act?" ii) "Whether on the facts and Circumstances of the case and in law, the order of the Hon'ble ITAT is perverse in setting aside the order u/s 263 dated 21/02/2022 on the ground that the twin conditions as enunciated under section 263 cannot be said to have been fulfilled without appreciating that the Assessing Officer got carried away with the submission of the Assessee and also the Assessing Officer has not examined the conditions as laid down u/s 54B of the Act for the period under consideration?" iii) "Whether on the facts and circ....
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....nion that land held by the assessee was stock in trade and income arising out of such sale is to be treated as business income. 10. It was also noted by PCIT that assessee before transfer of sale obtained permission from the Deputy Collector, Surat under section 63 of the Tenancy Act for selling agricultural land for non- agricultural purposes. However, no documentary evidence was placed before the Assessing Officer about agricultural activities carried out by the assessee in the said land. PCIT was therefore, of the opinion that the assessee was not eligible for deduction under section 54B of the Act. 11. In response to the show cause notice dated 23.03.2021 issued by PCIT under section 263 of the Act, the assessee could not file reply in the proper format and therefore, another notice was issued. However, assessee did not upload the reply nor sent through mail and PCIT therefore, decided the issue based on material available on record and passed the order under section 263 of the Act by setting aside the assessment order dated 12.12.2018 for AY 2016-2017 by directing the Assessing Officer to re-frame the assessment after examining the issues and after making proper inquiry.....
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....d by the assessee on 24.10.2018. 16. The assessee again responded vide reply dated 14.11.2018 to another show cause notice dated 6.11.2018 issued by the Assessing Officer which is duly reflected in para.2 of the assessment order under section 143(3) of the Act. It was therefore, contended by the assessee that the assessment order was passed after making detailed inquiry by the Assessing Officer. 17. However, PCIT passed the impugned order after considering the submissions of assessee as recorded in paragraph no.7 of his order on the ground that the assessee is involved in the business of builder as a partner in the firm Kabir Corporation having frequent dealings in purchase and sale of the land during the year under consideration. PCIT therefore, rejected the objections raised by the assessee by holding that during the assessment no cross verification or investigation was made by the Assessing Officer with regard to the sale of agricultural produce made by the assessee. It was also observed that the Assessing Officer did not make any inquiry from agriculture department or revenue agency about the crop cultivation and accepted the reply of the assessee without any further veri....
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.... under Section 54B is claimed and details of crops grown and yield of each crop for F.Y. 2013-14 to 2015-16. Details of head wise of agricultural expenses like labour, irrigation, transportation, seeds expenses fertilizer expenses etc. Complete name, address, PAN to whom the agricultural produce were sold in F.Y. 2013-14 to 201516, justification of claim of agriculture income with cogent and sufficient evidence with Hak Patra, Form-6, sales of bills of agriculture product. We find that the assessee in its reply dated 11/12/2018 furnished required details. The Assessing Officer again vide notice dated 16/10/2018 asked various details about the deduction under Section 54B to 54G of the Act and sale consideration of property in Income tax return is less than the consideration reported in Form 26QB, details of long term capital gain. The assessee further vide its reply dated 24/10/2018 furnished complete details. We find that the assessee again in response to show cause notice dated 06/11/2018, furnished the details of immovable property purchased vide its reply dated 14/11/2018. From the various reply furnished by the assessee, it can be concluded that the assessing officer thoroughly....
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....t has accepted capital gain. To strengthen such contention, the assesse has filed copy of assessment order dated 067.12.2018 passed under section 143(3) in case of co- owner namely Ramesh Chandra Purshottamdas Dass Patel alongwith the copies of the notices issued by his assessing officer. Similar submissions were made before us by ld AR for the assessee. We find that on such submissions, ld PCIT while setting aside the assessment order held that such objection is not acceptable as the fact in case of co-owner of said case with regard to involvement of said person in the real estate business, frequency of land transaction, intention of that person to purchase the land for resale or for personal use etc have not been stated. And that there is no basis to raise such objection that consciously no revision was proposed in that case. In our view the observation of Id PCIT is not correct. Once, the department has accepted the capital gain in the hand of co-owner in respect of the common transaction, the assessee cannot be treated indifferently. Thus, on such principle the assessment order cannot be branded as erroneous. 18. The Supreme Court in a celebrated case of Malabar Indust....
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....wise under section 80-I of the Act requires to be noted to be rejected. An assessment order cannot incorporate reasons for making/granting a claim of deduction. If it does so, an assessment order would cease to be an order and become an epic some. The reasons are not far to seek. Firstly, it would cast an almost impossible burden on the Assessing Officer, considering the workload that he carries and the period of limitation within which an order is required to be made; and, secondly, the order is an appealable order. An appeal lies, would be filed, only against disallowances which an assessee feels aggrieved with. (* emphasis added by us). 20. Thus, in view of the above discussion the twin conditions as enunciated under section 263 cannot be said to have been fulfilled. Thus, the order passed by ld PCIT under section 263 failed in our legal scrutiny, hence order dated 21.02.2022 is set aside." 19. From the above observations and findings arrived at by the Tribunal, it appears that the Assessing Officer while passing the assessment order made full inquiry and therefore, Commissioner having different belief would not permit him to take the order in revision. Once the Asse....