TaxTMI 
TaxTMI 
2026 (2) TMI 934
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessee filed the return of income on 29.07.2023 declaring total income at Rs. 8,86,86,869/-. The case was selected for scrutiny and accordingly assessment was completed u/s 143(3) of the Act vide order dated 02.03.2024 accepting the returned income. Thereafter, the Ld. PCIT upon perusal of the assessment records observed that the company M/s Produce and Textiles Pvt. Ltd. held 2 bigha 5cottah, 9 chhittak and 29 sqft of land which was situated at 98, Tollygunge Circular Road, Alipore. The Ld. PCIT also observed that Mr. Ravi Modi and Mrs Shilpi were shareholders of the company in the ratio of 74% and to 26% but the said company went into the liquidation and at the time of liquidation, there was a G+2 storey main building and G+1 staff quarter on the said land. This deed of conveyance was executed on 18.09.2017 in FY 2017-18 relevant to the assessment year 2018-19. The Ld. PCIT noted that the Hon'ble Court liquidated the company vide order dated 30.11.2018. The stamp duty value of the property as on the date of execution of deed was Rs. 32,32,13,108/- for the land and Rs. 70,62,750/- for the structure. The Ld. PCIT noted that Mr. Ravi Modi had shown full value of consideration of Rs.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mined thoroughly during the assessment proceedings by the AO after raising a specific query into the issue which was replied by the assessee and the AO only passed the assessment after considering the evidences filed by the assessee and therefore, allowed the claim u/s 54 of the Act. Ld. AR referred to notice issued u/s 142(1) of the Act dated 29.08.2023 a copy of which is available at page 24 and 25 and submitted that on page 204 to 2026 at page 6 para 2. The Ld. AO specifically raised the query that assessee has claimed benefit u/s 54, 54E, 54F, 54G and called upon the assessee to furnish the details of property and purchase details along with deed. The Ld. AR submitted that the assessee replied the said notice by uploading the response on the portal on 06.09.2023 acknowledgement of e-proceedings response at page no. 207, 208 and 209, a copy of reply available at page no. 210-211. The Ld. AR submitted that the assessee specifically replied the said query by narrating all the facts that were discussed by the Ld. PCIT in the order passed u/s 263 of the Act. Therefore, only after considering the said reply of the assessee, the ACIT accepted the plea of the assessee and allowed the e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e said query of the AO by furnishing all the details/evidences with respect to the claim u/s 54F of the Act and only thereafter, AO passed the assessment. Therefore, the assessment framed by the AO cannot be said to be erroneous and prejudicial to the interest of the revenue. The case of the assessee find supports from the decision of the Hon'ble Calcutta High Court in the case of PCIT Vs. Kesoram Industries Limited (supra), wherein the Hon'ble Court has held as under: "The Court: The appeal was admitted by an order of November 12, 2018 and the following questions of law framed: "i) Whether on the facts and in the circumstances of the case the Tribunal should have entertained and decided the subject appeal without giving an opportunity to the Assessing Officer to make a relook into the assessment in terms of the order of the Principal Commissioner of Income Tax dated 29th March, 2016 under Section 263 of the Income Tax Act, 1961? ii) Whether the appeal before the Tribunal was premature and the Tribunal ought not to have entertained the same? iii) Whether the exercise of jurisdiction by the Tribunal in passing its impugned order dated 4th November....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ever, the Commissioner, instead of considering the reply, recorded that the issue had not been verified by the assessing officer. The Tribunal set aside the decision of the Commissioner on the ground that the show-cause notice indicated a specific purpose but the matter was dealt with on another count after the receipt of the reply. The Tribunal relied on a view taken by a coordinate bench reported at 54 SOT 172 (Visuvius India Limited v. CIT) and a judgment of the Andhra Pradesh High Court reported at 211 ITR 336 (CIT v. G.K. Kabra). In both cases, it was held that if the object of the notice was one and the matter was treated for a different purpose in the ultimate order, that may not be the appropriate exercise of the jurisdiction. In the light of a possible view taken on the facts as they presented themselves in such regard, the order of the tribunal in respect of the first of the four heads does not call for any interference. The tribunal found that the Commissioner had not even indicated in the show- cause notice that "adequate enquiries were not carried out." The tribunal found that the assessing officer had conducted an enquiry regarding the addit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....which was impermissible. In matters of the present kind where there is a specialized tribunal in place for dealing with matters pertaining to a particular subject, the scope of interference is limited in the present jurisdiction. Once it is seen that a plausible or reasonable view has been taken by the tribunal upon a fair discussion of the matter, this Court in exercise of the authority available in this jurisdiction would not supplant its view in place of the tribunal's unless the error is apparent and palpable. The tribunal has given adequate reasons, and relied on precedents, as to why the manner in which the jurisdiction exercised by the Commissioner under Section 263 of the Act was found to be erroneous. There does not appear to be any legal error committed by the tribunal in either taking up the appeal or in deciding the same, particularly since cogent grounds have been indicated for interfering with the order of the Commissioner passed under Section 263 of the Act. The questions framed are answered in the negative in every case. ITA No. 169 of 2018 is dismissed." 5. Similarly, the Hon'ble Calcutta High Court in the case of PCIT Vs. Britannia Industr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....under consideration. Further the tribunal noted it is not the case where these expenses were charged as deduction in the preceding year more importantly, the tribunal noted that there is no revenue implication and no prejudice is caused to the revenue since the tax rate applicable to the assessee during the assessment year 2015-2016 to which invoices relates and the tax rates applicable for the assessment year 2016-2017 in which the invoices were accounted and paid were the same. 13. At this juncture, we take note of the decision in the case of the Hon'ble Supreme Court in Malabar Industrial Company Limited Versus Commissioner of Income Tax (2000) 243 ITR 83 (SC) wherein it was held that every loss of revenue cannot be treated as prejudicial to the interest of revenue and if the assessing officer has adopted one of the courses permissible under law or where two views are possible and the assessing officer has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order, unless the view taken by the assessing officer is unsustainable under law. Furthermore, on facts the tribunal found that the PCIT has not carried out any enquiry on his o....