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2023 (4) TMI 228 - AT - Income TaxRevision u/s 263 - Nature of capital gain - assessee has shown Long Term Capital Gain instead of short term capital account - order passed by AO erroneous or prejudicial to the interest of Revenue - HELD THAT - AO has made the inquiry in respect of the LTCG earned on the piece of agriculture land in question and the appellant had offered the detailed explanations substantiated by the cogent and authentic evidences such as registered purchase deed, registered sale deed, computation of LTCG etc., which has, after the examination and verification of the same, rightfully been accepted by the AO. On going through the copy of the purchase deed of the said land, we find that direct possession of the land in question had been handed over/transferred to the appellant being one of the co-owners/ purchaser of the land on 17 04 2008 only and not on 17 05 2010 as presumed by PCIT. Payment consideration as also the possession of the said land had been completed in the F.Y. 2007 08 (as clearly demonstrated in the said registered purchase deed), which is very much supported from the records of the Sub Registrar. Hence, so far first issue is concerned, order passed by the assessing officer is neither erroneous nor prejudicial to the interest of Revenue. Applicability of section 50C - Enhancement of the sale consideration on the basis of the valuation made by the DVO vis-a-vis the sale consideration claimed by the assessee does not arise, since the detailed explanation duly substantiated by cogent evidence was given to the AO vide submissions dated 6.8.2015, 04.01.2016, and 22.3.2016 and the same has been rightfully accepted by the AO - as argued that it is not a case of non-application of judicious and fair mind on the part of the AO as the matter has been duly considered by the AO at the time of assessment proceedings. Assessee has also contended that even after consideration of the report of the DVO and enhancement to the sale consideration share of the assessee, the difference between the valuation by the DVO and the actual sale consideration would be below 10 %. Deduction u/s 54B - AO had conducted the in-depth examination and verification of corroborative documents/materials submitted during the course of assessment proceedings and after application of fair and judicious mind, the AO had rightfully allowed the claim u/s 54B of the Act. We note that Pr. CIT had made the endeavor to substitute his personal view against the plausible view taken by the AO within the frame work of the provisions of the law and thus, there is no force in the inferences drawn by the Pr. CIT taking shelter under Explanation 2(a) of section 263 the Act. Assessee during the assessment stage has submitted all the documents, details and the explanations required by the AO and just because the Assessing Officer does not bring these facts in his assessment order does not mean that assessing officer has not conducted proper enquiry during the assessment stage. Distinction between lack of inquiry and inadequate inquiry - If there was any inquiry, even inadequate, that would not by itself, give occasion to the Commissioner to pass orders under section 263 of the Act, merely because he has different opinion in the matter. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. Therefore, in the assessee s case, it cannot be said that it is a case of 'lack of inquiry'. Appeal filed by the assessee is allowed.
Issues Involved:
1. Initiation of revision proceedings under Section 263 of the Income Tax Act. 2. Assessment of capital gains as long-term versus short-term. 3. Enhancement of short-term capital gains based on valuation. 4. Deduction under Section 54B of the Income Tax Act. Issue-wise Detailed Analysis: 1. Initiation of Revision Proceedings under Section 263 of the Income Tax Act: The assessee challenged the initiation of revision proceedings under Section 263, arguing that the assessment order was neither erroneous nor prejudicial to the interests of the Revenue. The assessee contended that the issues raised by the Principal Commissioner of Income Tax (PCIT) had already been considered in detail during the original assessment proceedings under Section 143(3). The Tribunal found that the Assessing Officer (AO) had indeed examined the relevant issues during the original assessment, and thus, the revision proceedings initiated by the PCIT were unwarranted. 2. Assessment of Capital Gains as Long-term versus Short-term: The PCIT contended that the assessee had incorrectly treated the capital gains from the sale of a plot of land as long-term capital gains instead of short-term. The PCIT argued that the correct date of purchase was 17/05/2010, not 17/04/2008, as claimed by the assessee. The Tribunal, however, found that the AO had already scrutinized the details of the transaction, including the purchase deed and the date of possession, and had accepted the assessee's claim of long-term capital gains. The Tribunal noted that the AO had issued notices under Section 142(1) and Section 50C, and the assessee had provided detailed explanations and documents, which the AO had duly considered. 3. Enhancement of Short-term Capital Gains Based on Valuation: The PCIT observed discrepancies in the sale consideration of another plot of land at Asarma Village, which the assessee had shown as Rs. 40,70,500/-. The PCIT argued that the fair market value, as determined by the Valuation Officer, was Rs. 1,00,01,800/-, and the assessee's share should be Rs. 50,00,900/-, resulting in an enhanced short-term capital gain. The Tribunal found that the AO had already examined this issue during the assessment proceedings, and the assessee had provided detailed explanations and supporting documents. The Tribunal concluded that the AO had taken a possible view based on the available information, and the PCIT's revision was not justified. 4. Deduction under Section 54B of the Income Tax Act: The PCIT questioned the deduction claimed by the assessee under Section 54B, arguing that the AO had not verified whether the conditions for the deduction were met. The Tribunal found that the AO had indeed raised specific queries regarding the deduction under Section 54B and had received detailed explanations and documents from the assessee. The AO had verified the purchase of new agricultural land and the use of the sale proceeds for the same, and had allowed the deduction after due consideration. The Tribunal noted that the AO's decision was based on a plausible view, and the PCIT's revision was not warranted. Conclusion: The Tribunal quashed the order passed by the PCIT under Section 263, holding that the original assessment order was neither erroneous nor prejudicial to the interests of the Revenue. The Tribunal emphasized that the AO had conducted a thorough examination of the relevant issues and had taken a possible view based on the available information. The appeal filed by the assessee was allowed, and the order of the PCIT was set aside.
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