9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (2) TMI 1060 - AT - Income TaxRevision u/s 263 by CIT - value of cost of acquisition adopted by the assessee while computing capital gain on sale of agricultural land - Unrealistic approach or scientific method valued the property at unrealistic value - As per CIT assessee claimed excess of cost indexation by which needs to be disallowed - HELD THAT - As it is revealed it is not the case that the AO has not made any enquiry. Indeed the Pr. CIT initiated proceedings u/s 263 of the Act on the ground that the AO has not made enquiries or verification which should have been made in respect value of land adopted by the registered valuer. It is not the case of the Pr. CIT that the Ld. AO did not apply his mind to the issue on hand or he had omitted to make enquiries altogether. In the instant set of facts the AO had made enquiries and after consideration of materials placed on record accepted the genuineness of the claim of the assessee. At this juncture it is also important to note that the learned PCIT in his order passed under section 263 of the Act has made reference to the explanation 2 of section 263 of the Act. It was attempted by the learned PCIT to hold that there were certain necessary enquiries which should have been made by the AO during the assessment proceedings but not conducted by him. In this regard we make our observation that the learned PCIT has not invoked the explanation 2 of section 263 of the Act in the show cause notice about the same. Therefore the opportunity with respect to the explanation 2 of section 263 of the Act was not afforded to the assessee. Thus on this count the learned PCIT erred in taking the recourse of such provisions while deciding the issue against the assessee. Thus we hold that there is no error in the assessment framed by the AO under section 143(3) causing prejudice to the interest of revenue. Thus the revisional order passed by the learned PCIT is not sustainable and therefore we quash the same. Hence the ground of appeal of the assessee is allowed.
Issues Involved:
1. Delay in filing the appeal. 2. Validity of the order passed by the Pr. Commissioner of Income Tax (Pr. CIT) under Section 263 of the Income Tax Act, 1961. 3. Assessment of the cost of acquisition of inherited agricultural land and the corresponding indexed cost claimed by the assessee. 4. Adequacy of the inquiry conducted by the Assessing Officer (AO) during the assessment proceedings. Issue-wise Detailed Analysis: 1. Delay in Filing the Appeal: The appeals were filed with a delay of 94 days, which occurred during the COVID-19 period. The assessee's representative requested the condonation of the delay, citing the Supreme Court judgment in the case of Cognizance for Extension of Limitation. The Revenue did not object to this request. Consequently, the delay was condoned, allowing the appeals to be adjudicated on merit. 2. Validity of the Order Passed by the Pr. CIT under Section 263: The Pr. CIT invoked Section 263, deeming the AO's assessment order as erroneous and prejudicial to the interest of the Revenue. The Pr. CIT's contention was based on the AO's acceptance of the assessee's valuation report without adequate inquiry. The Tribunal emphasized that an order could only be deemed erroneous if the AO failed to apply the law correctly or misunderstood the facts. The Tribunal referenced various judicial precedents, including the Delhi High Court's distinction between lack of inquiry and inadequate inquiry, and the Bombay High Court's ruling that the Commissioner cannot initiate proceedings for mere fishing and roving inquiries. The Tribunal concluded that the AO had made adequate inquiries and accepted the valuation report after due consideration, thus the Pr. CIT's invocation of Section 263 was not justified. 3. Assessment of the Cost of Acquisition of Inherited Agricultural Land: The assessee had transferred inherited agricultural land and claimed the cost of acquisition based on a valuation report by a government-approved valuer. The Pr. CIT argued that the valuation was unrealistic and excessively high compared to the Jantri value effective from 1st November 1999. The Pr. CIT believed that this resulted in an overstatement of the indexed cost, leading to an erroneous assessment order. However, the Tribunal noted that the AO had considered the valuation report and other relevant documents during the assessment proceedings, and thus, the assessment could not be deemed erroneous merely because the Pr. CIT had a different opinion on the valuation. 4. Adequacy of the Inquiry Conducted by the AO: The Tribunal scrutinized whether the AO had made adequate inquiries regarding the valuation of the land. It was noted that the AO had issued specific queries and received detailed responses from the assessee, including the valuation report and supporting documents. The Tribunal reiterated that the extent of inquiry is at the AO's discretion, and the Pr. CIT cannot impose his own standards of inquiry. The Tribunal referenced several judicial precedents, including the Supreme Court's rulings, which held that an assessment order could not be revised under Section 263 if the AO had conducted inquiries and taken a plausible view. Conclusion: The Tribunal quashed the Pr. CIT's order under Section 263, holding that the AO's assessment was neither erroneous nor prejudicial to the interest of the Revenue. The appeals filed by the assessee were allowed, and the findings in ITA No. 93/RJT/2021 were applied to the identical issues in ITA Nos. 94 and 95/RJT/2021, resulting in the allowance of all appeals. Order Pronounced: The order was pronounced in the Court on 15/02/2023 at Ahmedabad.
|
