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TMI Blog2012 (12) TMI 775X X X X Extracts X X X X X X X X Extracts X X X X ..... e cancel led. 2. That the Learned Commissioner of Income Tax-1 Ludhiana has erred by invoking the provision of Sect ion 263 of Income Tax Act & also erred in giving direct ion to get the assets of the firm evaluated on the date of retirement of partner & frame the assessment denovo without appreciating- the fact that the assessing officer has al ready applied his mind on the issue in quest ion & accepted the Capital gain on Rights in Leasehold property after detailed discussion during the course of assessment proceedings. 3. That the Learned Commissioner of Income Tax -1 Ludhiana has erred by invoking the provision of Sect ion 263 of Income Tax Act merely on the basis of changed opinion & also erred by not accepting the factual position t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to add, or amend the grounds of appeal before the appeal is heard and disposed off.". 3. In the course of present appel late proceedings, before us, ld. 'AR' contended that the AO, has taken a possible view and the view taken by the CIT, in the revisionary proceedings cannot displace the same. He narrated that the appellant is a partnership firm, having four partners, viz Naresh Kumar, Bharat Bhushan, Dal ip Kumar and Raj Rani. The firm sold some portion of the rights, in the lease-hold land and building, to one of the partners, Shri Naresh Kumar, on 30.09.2004, vide unregistered sale agreement, for a consideration of Rs.46 lacs, which was received by debiting the capital account of the partner. A reference was invited to page 77-79. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the CIT. 4. Ld. 'DR', on the other hand, placed reliance on the order passed by the CIT and contended that the order is cryptic in nature and the AO, has not applied his mind. Ld. 'DR' placed reliance on the decision of the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. 243 ITR 83 (S.C) and Rampyari Devi Saraogi V CIT (1968) 67 ITR 84 (S.C). 5. We have careful ly perused the rival submissions, facts of the case and the decisions relied upon by the contending parties. In this case, the ld. CIT, having regard to the factual matrix of the case and the assessment order, under reference, was of the opinion that the provisions of Section 45(4) are applicable to the present case. Ld. CIT, in para 4.1.2 of the impugned r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditions enshrined u/s 263 of the Act, stand satisfied. 6. We are of the considered opinion, having regard to the submissions made by the assessee and orders passed by the lower authorities, that the issue in question, pertaining to capital gains in the said transaction, has been duly considered by the AO, as is evident from the questionnaire issued and reply submitted by the assessee. Further, the assessee has fi led documentary evidence, indicating, the date of transaction, as well as the date of retirement of the said partner. It is wel l settled proposition that, where AO has taken legally permissible view, CIT cannot acquire revisional jurisdiction u/s 263 of the Act, merely because another view is possible. This view is duly s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us but is prejudicial to the revenue- recourse cannot be had to Section 263(1) of the Act. The provision cannot be invoked to correct each and every type of mistake or error committed by the AO, it is only when an order is erroneous that the Section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. The phrase "prejudicial to the interests of the revenue" is not an expression of art and is not defined in the Act. Understood in its ordinary meaning it is of wide import and is not confined to loss of tax. The scheme of the Act i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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