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2023 (9) TMI 1017 - AT - Income TaxRevision u/s 263 - as per CIT AO not considered issue of sale of immoveable property and calculation of capital gains properly - error in computing Cost of Acquisition - HELD THAT - In the case under consideration , the asset sold is the plot number 113/15 16/1 along with the hotel standing on it, therefore, the cost of acquisition of the said plot number 113/15 16/1 along with the Hotel needs to be considered as Cost of Acquisition for the purpose of Section 48. For the purpose of section 48, the other two plots having Survey number 113/15 16/2 and 113/15 16/3 Shirdi have no relation to the Asset Sold and hence no relation to the cost of acquisition of the asset sold. Therefore, the pleading of Ld.AR that the plots number 113/15 16/2 113/15 16/3 have been acquired by Government Authorities have no relevance to the calculation of capital gain on sale of plot number 113/15 16/1 Hotel. Assessee in the computation of Capital gain considered total value as mentioned in the Sale Deed dated 9/2/2009 vide which the assessee along with two persons had purchased three commercial NA plots having Survey number 113/15 16/1, 113/15 16/2 and 113/15 16/3 Shirdi along with constructed Hotel. The said sale deed dated 9/2/2009 mentions Rs. 4,00,00,000/- as consideration paid for acquiring three commercial NA plots having Survey number 113/15 16/1, 113/15 16/2 and 113/15 16/3 Shirdi along with the Constructed Hotel. Thus, the consideration Rs. 4,00,00,000/- contains some part paid for two plots 113/15 16/2 and 113/15 16/3. The assessee is not eligible to claim deduction for the amount paid for acquiring the two plots 113/15 16/2 and 113/15 16/3 while calculating Capital Gain for Sale of plot number 113/15 16/1 along with the Hotel. AO has not looked into it. Therefore, qua calculation of Capital Gain the Assessment Order is erroneous and prejudicial to the interest of Revenue. Assessee has made a claim which is prima facia erroneous. AO has allowed the said erroneous claim. Hence, the Assessment Order is erroneous and prejudicial to the interest of revenue. This is not the case where two views are possible. Therefore, the Pr.CIT was right in invoking jurisdiction u/s. 263. Therefore, the order u/s. 263 is upheld. Decided against assessee.
Issues Involved:
The judgment involves the following Issues: 1. Direction to reframe the assessment order passed under section 143(3) by the Principal Commissioner of Income Tax. 2. Validity of the order under Section 263 of the Income Tax Act, 1961 passed by the Principal Commissioner of Income Tax. 3. Assessment order under section 263 despite the Assessing Officer's previous assessment order under section 143(3). 4. Leave sought to add, amend, or alter any grounds of appeal. Issue 1: Direction to Reframe Assessment Order under Section 143(3): The Assessee appealed against the direction of the Principal Commissioner of Income Tax to reframe the assessment order passed under section 143(3). The Tribunal dismissed the appeal, upholding the Commissioner's decision. The Tribunal found that the Assessee wrongly claimed the cost of acquisition of three plots while selling only one plot, resulting in an erroneous calculation of capital gains. The Tribunal held that the order under section 263 was justified as the Assessment Order was erroneous and prejudicial to the interest of Revenue. Issue 2: Validity of Order under Section 263: The Assessee challenged the validity of the order under Section 263 passed by the Principal Commissioner of Income Tax. The Tribunal upheld the order, stating that the Assessee's claim was prima facie erroneous, and the Assessment Order allowing the claim was prejudicial to the interest of revenue. Citing the case of CIT Vs. Amitabh Bachchan, the Tribunal emphasized the need for further investigation in such cases. Consequently, the Tribunal affirmed the jurisdiction of the Principal Commissioner under Section 263. Issue 3: Assessment Order under Section 263: The Assessee contended that the Assessing Officer had already passed an assessment order under section 143(3), making the order under section 263 unnecessary. However, the Tribunal found that the Assessment Order failed to consider the correct cost of acquisition, leading to an incorrect calculation of capital gains. As such, the Tribunal upheld the order under section 263 as valid and essential for rectifying the erroneous Assessment Order. General Grounds: The Tribunal dismissed the general ground seeking leave to add, amend, or alter any grounds of appeal, stating it did not require adjudication. The appeal of the Appellant Assessee was ultimately dismissed by the Tribunal.
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