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2022 (11) TMI 578 - ITAT KOLKATARevision u/s 263 by CIT - AO has not examined the issue of taxable long term capital gain and income from other sources - As per CIT AO has failed to make necessary enquiry and verification in respect of certain items of income during the assessment proceedings which has rendered the order framed u/s 143(3) of the Act as erroneous as well as prejudicial to the interest of the revenue - HELD THAT:- We find that there is no mistake in the order of AO and no prejudice is caused to the revenue as the assessee has duly shown the sale consideration falling to his share. Similarly all other 27 co-owners have also shown the sale in their returns.Besides the confirming parties have also disclosed the sale transaction in their respective returns of income. The said fact was examined and enquired by the AO in the case of assessee during assessment proceedings which culminated u/s 143(3) - We note that at the time of sale by the confirming parties vide sale deed dated 06.08.2013 out of total consideration of Rs. 16.04 crores, Rs. 13.78 crores was paid to confirming parties and therefore the assessee’s contentions that it has correctly shown the transaction of sale in its return has legal force and merit. We are of the view that the facts were not correctly appreciated by ld. PCIT. In our opinion, the assessment framed by the AO is neither erroneous nor prejudicial to the interest of the revenue so far as the first issue is concerned. The case of the assessee is squarely covered by the decision in the case of Malabar Industrial Co [2000 (2) TMI 10 - SUPREME COURT] wherein the Hon’ble Court has held that in order to invoke the provisions u/s 263 of the Act, the PCIT has to be first satisfy twin conditions i.e. the order of AO sought to be revised has to be erroneous as well as prejudicial to the interest of Revenue and if one of them is absent i.e if the order is erroneous but is not prejudicial to the Revenue or vice versa , recourse cannot be had to Section 263(1) of the Act. Similarly in respect of second issue proposed by the PCIT, we note that the sale and purchase were amongst the family members which was also acknowledged by the PCIT in the impugned order. Once this is established that the transaction is between family members the provisions of Section 56(2)(viib) of the Act does not apply. On this issue also , the PCIT has made a finding that the AO has not made any enquiry without making any enquiry himself as to how the assessment order is erroneous and prejudicial to the interest of the revenue which is contrary to the ratio laid down by the Hon’ble Delhi High Court in the case of D.G. Housing Project [2012 (3) TMI 227 - DELHI HIGH COURT] Thus the assumption of jurisdiction u/s 263 of the Act by the Ld. PCIT and consequent order are invalid and are quashed. The appeal of the assessee is allowed.
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