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2020 (12) TMI 630 - AT - Income TaxRevision u/s 263 - CIT Meerut setting aside the issue relating to Sundry Creditors and Capital Gains issuing directions to the Id. A.O. to once again look into this issue - HELD THAT - As perused all the documentary evidences filed by the assessee in the shape of paper book and we find that the confirmations received from aforesaid 16 sundry creditors obtained by the assessee and submitted to the AO. This fact was discovered in joint inspection of assessment record of the assessee and ld. CIT(DR). Since these confirmations of sundry creditors were not noticed by Ld. CIT during proceedings u/s 263 hence, we are of the view that Ld. CIT has not applied his mind and passed the impugned order in a routine manner. The issue regarding sundry creditors, in our view, Ld. CIT has wrongly applied the provisions of section 263 which is liable to be cancelled and hence, we cancel the same. Applicability of section 50C - Assessee has filed the detailed submissions before the AO as well as Ld. CIT and the AO has examined the same with the support of documentary evidences filed by the assessee on the applicability of section 50C of the Act and has not made any additions because Section 50C is not applicable in the case of the assessee and no material on record is available establishing that the assessee has received money over and above the total consideration. R. Samantha Ravindran 2013 (3) TMI 271 - MADRAS HIGH COURT wherein, it has been held that the value of property transferred prior to 01.10.2009 cannot be computed under amended provisions, which came into effect on 01.10.2009 (the word or assessable was inserted w.e.f. 01.10.2009). Keeping in view of the facts and circumstances as explained above we are of the considered view that section 50C is not applicable in the case of the assessee. But the Ld. CIT has wrongly applied the same by ignoring the well reasoned order passed by the AO in the case of the assessee. Therefore, the second issue relating to applicability of Section 50C in the case of assessee is also decided in favour of the assessee and the order of the Ld. CIT on this issue is also cancelled. - Decided in favour of assessee.
Issues Involved:
1. Limitation of the order passed under Section 263 of the Income Tax Act, 1961. 2. Jurisdiction of the Commissioner of Income Tax (CIT) to initiate and pass an order under Section 263. 3. Validity of the order passed under Section 263 on factual and legal grounds. 4. Erroneous and prejudicial nature of the assessment order to the interests of revenue. 5. Examination of sundry creditors totaling ?1,94,77,814. 6. Examination of capital gains from the transfer of rights in two office/shops in "Arunachal Building," Delhi. Detailed Analysis: 1. Limitation of Order Passed Under Section 263: The assessee argued that the order passed by the CIT under Section 263 was barred by limitation. However, this ground was not pressed by the assessee's counsel during the appellate proceedings and was subsequently dismissed. 2. Jurisdiction of CIT to Initiate and Pass Order Under Section 263: Similar to the limitation issue, the jurisdictional challenge was also not pressed by the assessee's counsel and was dismissed. 3. Validity of Order Passed Under Section 263 on Factual and Legal Grounds: The assessee contended that the order passed by the CIT was factually incorrect and legally untenable. The CIT had set aside the assessment order on the grounds that the Assessing Officer (AO) had not conducted proper inquiries regarding sundry creditors and the applicability of Section 50C to the capital gains from the sale of properties. 4. Erroneous and Prejudicial Nature of the Assessment Order to the Interests of Revenue: The CIT observed that the AO's assessment order was erroneous and prejudicial to the interests of revenue due to inadequate inquiries. The CIT noted that the AO had accepted sundry creditors totaling ?1,94,77,814 without proper confirmations and had not examined the actual market prices of properties sold by the assessee. 5. Examination of Sundry Creditors Totaling ?1,94,77,814: The CIT identified that the AO had not made proper inquiries before accepting sundry creditors. However, during the appellate proceedings, it was discovered that the assessee had submitted confirmations from the sundry creditors to the AO. This fact was overlooked by the CIT. The Tribunal found that the CIT had not applied his mind properly and had passed the order in a routine manner. Therefore, the Tribunal canceled the CIT's order on this issue. 6. Examination of Capital Gains from Transfer of Rights in "Arunachal Building": The CIT had directed the AO to examine the actual market prices of the properties sold by the assessee and to consider the applicability of Section 50C. The assessee argued that Section 50C was not applicable as the state government/stamp valuation authority had not assessed any value for the property, and the term "or assessable" was inserted in Section 50C after the relevant assessment year. The Tribunal agreed with the assessee, citing the decision of the Hon'ble Madras High Court in CIT vs. R. Samantha Ravindran, which held that the amended provisions of Section 50C were not applicable to transfers made prior to the amendment. Therefore, the Tribunal canceled the CIT's order on this issue as well. Conclusion: The Tribunal found that the CIT had wrongly applied the provisions of Section 263 without considering the documentary evidence submitted by the assessee. The Tribunal canceled the CIT's order on both issues of sundry creditors and the applicability of Section 50C. Consequently, the appeal filed by the assessee was partly allowed. Order Pronounced: The order was pronounced in the Open Court on 16/12/2020.
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