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2013 (6) TMI 474 - AT - Income TaxRevisionary powers of Commissioner u/s 263 - assessee questioned jurisdiction of CIT(A) to revise the assessment - AO initiated proceedings in the some cases of the Members of the AOP individually and the AOP by issuing notices u/s 148 - Held that - As seen from the orders of the AO passed in the hands of the two members of AOP had clearly stated that the assessee has not given any information and in the ex-parte order u/s 144, brought to tax 1/5th of the amount in the respective hands, and the same was not done in the case of all the five members of the AOP, and this aspect was not examined by the AO in the hands of the firm at all. In fact, if one peruses the order of the AO, it is to be noticed that there is no mention of even the proceedings u/s 133A, nor there is any mention of submissions in this regard. The assessee s assessment has been completed simply accepting the commission at Rs.6 per sq. yard, without there being any discussion about the various advances paid by the AOP or enquiry about the sources thereof, etc., as rightly pointed out by the Commissioner. Also the explanation given by the assessee has not been correlated or examined. There is variation in the square yards sold in the respective years. In the orders of the AO in the hands of the members of the AOP dated 31.12.2008, it was mentioned that the assessee sold 284 plots (as against 216 stated in the firm s letter) and the total extent of land sold was 64,483 sq. yards (as against 63,076 sq. yards stated in the firm s letter) for the total amount. But there is no evidence on record nor enquired by the AO, about the source of the initial amount of Rs.32 lakhs has been paid. Even though the sale documents and date of sales were available, from whom exactly the initial advance was received was not on record. The details were neither enquired nor placed on record. As stated from the two statements one member on the day of survey (Shri G.Raji Reddy) stated that they have purchased the land and developed plots, whereas after six months, the other member submitted that they have not purchased the land, and development was done by the owners themselves, and they have only received commission. There is variation in the statements within a period of six months from the day of survey to the date of second statement. Absence of cash receipts for development charges by the owners also gives rise to a doubt whether the assessee undertook the development. These aspects were not at all enquired by the AO. Since there is no proper enquiry on various aspects and no findings by the AO about these, CIT has exercised the revisionary jurisdiction under S.263 correctly, by setting aside the orders of the Assessing Officer. Since the CIT has set aside the assessment for redoing the same afresh, there is no prejudice caused to the assessee, as held in the case of CIT V/s. Infosys Technologies Ltd.(No.2)(2012 (1) TMI 76 - KARNATAKA HIGH COURT). Against assessee.
Issues Involved:
1. Jurisdiction of the Commissioner of Income-tax to revise the assessment under S.263. 2. Adequacy of the Assessing Officer's enquiry into various aspects of the assessee's transactions. 3. Validity of the Commissioner of Income-tax's findings and directions for a fresh assessment. Detailed Analysis: 1. Jurisdiction of the Commissioner of Income-tax to Revise the Assessment under S.263: The primary issue revolves around the jurisdiction of the Commissioner of Income-tax (CIT) to revise the assessment orders dated 30.12.2009, passed by the Income Tax Officer (ITO) under S.263 of the Income-tax Act, 1961. The assessee challenged the CIT's authority to set aside the assessment orders on the grounds that the CIT did not have the jurisdiction to do so. 2. Adequacy of the Assessing Officer's Enquiry into Various Aspects of the Assessee's Transactions: The CIT initiated proceedings under S.263 on the basis that the Assessing Officer (AO) did not conduct proper enquiries on several issues. These included: - The existence of a registered cancellation agreement. - The mode of repayment and evidence thereof. - The advances received by the assessee. - Statements recorded from one of the landlords, Mr. Rafiq Hyder, indicating no cancellation of the agreement. - The actual pendency of a civil suit filed by Mr. Bikshapathi. - Enquiries regarding the payment of land purchase consideration of Rs.1,33,03,050. - Unexplained expenditure incurred towards the development activity of the land. - The contention that the assessee received only commission. The CIT found that the AO had failed to make enquiries on these aspects, leading to the setting aside of the assessments for fresh enquiry. 3. Validity of the Commissioner of Income-tax's Findings and Directions for a Fresh Assessment: The assessee argued that the AO had made necessary enquiries and that improper or inadequate enquiry does not justify invoking S.263. The CIT, however, pointed out several discrepancies and lack of proper documentation and evidence, such as: - Statements from members of the AOP (Association of Persons) indicating that the land was purchased and developed into plots, contradicting later statements that they only received commission. - Lack of evidence or correlation of development charges received and passed on. - Variations in the number of plots sold and the total extent of land sold. - No proper enquiry into the source of initial amounts paid to the landowners. The Tribunal examined the records and found that the AO did not make adequate enquiries into these critical aspects, supporting the CIT's decision to revise the assessments. Conclusion: The Tribunal upheld the CIT's jurisdiction under S.263, agreeing that the AO had not conducted proper enquiries into various aspects of the assessee's transactions. The Tribunal affirmed the CIT's direction to redo the assessments afresh, ensuring proper enquiry and verification of all relevant facts and figures. Consequently, the appeals of the assessee were dismissed, and the orders of the Commissioner of Income-tax were upheld. Order Pronounced: The Tribunal pronounced the order on 24.05.2013, dismissing the appeals of the assessee and upholding the CIT's orders.
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