9911796707
TMI Blog2004 (3) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... AO made the enquiry from him. The assessee received a sum of Rs. 3.91 lakhs for leaving his rights on the land which he was using for agricultural purposes. The land was purchased by S/Sh. Chetan Parkash, Suresh Chopra, Bali Mohan Singh from S/Sh. Champa Lal, Gobind Dass, Rattan Lal and Chagan Lal. The assessee submitted to the AO that an agreement was made on 12th Oct., 1990 for leaving the possession of the land and the assessee was given a sum of Rs. 3.91 lakhs, out of which his share was 50 per cent. The assessee stated that the compensation was exempt under s. 55(2) because this amount was received for leaving the rights in agricultural land. It was also stated that the amount received in lieu of land development could not be considered as income. The AO recorded the statement of the assessee and asked certain searching questions in respect of the compensation of Rs. 3.91 lakhs. The land in question was in possession of the assessee for the last 30 years. The AO after considering the submissions of the assessee and the material on record observed that the assessee was asked about the expenses of Rs. 50,000, which was spent by him for construction of one room and a well and en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy rights and as such capital gains could not be computed. In the instant case, even if the contention of the assessee about the tenancy rights was to be considered, the decisions relied upon were not applicable inasmuch as there was cost of acquisition of tenancy rights and as such capital gains could be computed. 4. The AO also did not examine the possibility that even if the income could not be assessed as capital gains, the same was liable to be considered as income from other sources. On this ground also the order passed by the AO is erroneous and prejudicial to the interest of the Revenue." Now the assessee is in appeal against the order of the CIT passed under s. 263. 5. The learned counsel for the assessee reiterated the submissions made before the lower authorities and further stated that the order passed by the AO was neither erroneous nor prejudicial to the interests of the Revenue. As such, it was outside the purview of s. 263. It was vehemently argued that the assessee furnished written submissions along with evidence before the AO, who, after proper verification, adjudicated the case and accepted the claim of the assessee. It was stated that there was an agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08 (Bom) (iv) Venkatakrishna Rice Factory vs. CIT (1987) 62 CTR (Mad) 152 : (1987) 163 ITR 129 (Mad) (v) Nirfabrics Ltd. vs. Dy. CIT 124 Taxation 35 (Bom) (vi) CIT vs. Kanda Rice Mills (1990) 85 CTR (P H) 5 : (1989) 178 ITR 446 (P H) (vii) CIT vs. Kanshi Nath Co. (1987) 64 CTR (All) 177 : (1988) 170 ITR 28 (All) In his rival submissions, the learned Departmental Representative supported the order of the CIT and stated that the order passed by the AO was erroneous and prejudicial to the interests of the Revenue, because he had not considered that the compensation received by the assessee was for the construction done by him and not for leaving the tenancy rights. 6. We have considered the rival submissions and carefully gone through the material available on record along with various citations quoted by the learned counsel for the assessee. In the instant case, it is noticed that the AO conducted proper enquiry for the receipt of Rs. 3.91 lakhs which the assessee received in lieu of the tenancy rights. The AO also recorded the statement of the assessee and asked specific questions which were directly related to the amount in question. Therefore, it cannot be said that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w, it could not be held to be erroneous in law and consequently, it could not be prejudicial to the interest of the Revenue and hence, the action of the CIT was not justified. The Tribunal was, therefore, not right in upholding the order of the CIT. The scope of interference under s. 263 is not to set aside merely unfavourable orders and bring to tax some more money to the treasury nor is the section meant to get at sheer escapement of revenue which is taken care of by other provisions in the Act. The prejudice that is contemplated under s. 263 is prejudice to the income-tax administration as a whole. Sec. 263 is to be invoked not as a jurisdictional corrective or as a review of a subordinate s order in exercise of the supervisory power but it is to be invoked and employed only for the purpose of setting right distortions and prejudices to the Revenue which is a unique conception which has to be understood in the context of and in the interest of revenue administration. Such a power cannot in any manner be equated to or regarded as approaching in any way the appellate jurisdiction or even the ordinary revisional jurisdiction conferred on the CIT under s. 264." In the instant ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
