Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (1) TMI 815 - AT - Income TaxRevision u/s 263 by CIT - Additions u/s 56(2)(vii)(b) - purchase of immovable property - difference in value as per stamp duty valuation - as per CIT reassessment order passed by AO is neither erroneous nor pre judicial to the interest of Revenue - HELD THAT - The order is not an erroneous order, since the Sale Deed itself got cancelled vide Cancellation Deed dated 26.02.2013 and the entire sale consideration was repaid to the assessee. Thus the question of invoking Section 56(2)(vii)(b) does not arise in the facts of the present case of the assessee. PCIT has not pointed out what is the error in the reassessment order passed by the A.O. and how it is prejudicial to the Interest of Revenue whereas the Ld. PCIT in his conclusion, accepts the submission of the assessee, cancellation of Sale Deed, etc., but require further examination and verification. This cannot be a ground to invoke Revision proceedings u/s. 263 of the Act. As relying on Malabar Industrial Co. Ltd 2000 (2) TMI 10 - SUPREME COURT reassessment order passed by the AO is neither erroneous nor pre judicial to the interest of Revenue for invoking Section 56(2)(vii)(b) for the reason that the sale deed was cancelled vide Cancellation Deed dated 26.02.2013. Therefore the invocation of Revision proceedings by the PCIT is unjustifiable and the same is hereby quashed. Appeal filed by the Assessee is hereby allowed.
Issues:
Challenge to order under section 263 of the Income Tax Act, 1961 for Assessment Year 2011-12. Analysis: The appeal was filed by the Assessee against the order dated 12.03.2021 under section 263 of the Income Tax Act, 1961. The Assessee, an individual deriving income from other sources, filed a Return of Income for A.Y. 2011-12 manually on 31.03.2012, declaring total income of Rs. 56,00,004. The Assessee jointly purchased an immovable property for Rs. 81,00,000, with the co-owner paying the entire consideration. The case was reopened under section 147 as the Assessee had not filed the Return for the year of purchase. The Assessing Officer accepted the returned income after reassessment. Subsequently, the Principal Commissioner issued a notice questioning the applicability of Section 56(2)(vii)(b) of the Act. The Assessee contended that the sale deed was cancelled due to title defects, and the amount was returned. The Principal Commissioner set aside the assessment order, directing a fresh assessment to verify the Assessee's contentions. The Assessee argued that the order was not erroneous or prejudicial to Revenue as the sale deed was cancelled, and the entire consideration was returned. The Tribunal considered the facts and legal provisions. It noted that the sale deed was cancelled, and the consideration was repaid, making the question of invoking Section 56(2)(vii)(b) irrelevant. The Tribunal referred to the Supreme Court ruling in Malabar Industrial Co. Ltd. vs. CIT, emphasizing that for Section 263 to apply, the order must be both erroneous and prejudicial to Revenue. The Tribunal found that the Assessing Officer's order was not erroneous or prejudicial, as the sale deed cancellation was a valid reason. Therefore, the Principal Commissioner's revision order was deemed unjustified and quashed. The appeal by the Assessee was allowed. In conclusion, the Tribunal held that the reassessment order was not erroneous or prejudicial to Revenue, as the sale deed cancellation was a valid reason, and the invocation of Section 56(2)(vii)(b) was unwarranted. The Tribunal's decision was based on the principles outlined in the Supreme Court ruling and the specific circumstances of the case.
|