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TMI Blog2013 (2) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... nd sale of plots/lands. Yet, it did not mean that assessee was debarred from purchasing and holding some plots/land as capital asset and claim benefit under section 54F. The entire facts regarding this aspect go to prove that the assessee had kept the impugned asset and has earned LTCG, which has been invested in terms of provisions of section 54F. The AO' action did not call for any enquiry in this regard as he had taken one of the possible view keeping in view the entire facts. The Commissioner can have his own view and that may be other possible view. But in such situations, the order cannot be treated as erroneous.The Commissioner cannot revise the order on this aspect. AO has also made requisite enquiries regarding other aspects of investments made and liabilities shown by the assessee and other expenses, which is clearly explained by the assessee - the order of the Commissioner is set aside and that of the Assessing Officer is restored - in favour of assessee. - IT Appeal No. 122 (Jodh.) of 2011 - - - Dated:- 30-11-2012 - Hari Om Maratha And N.K. Saini, JJ. Amit Kothari for the Appellant. Subash Chandra for the Respondent. ORDER Hari Om Maratha, Judi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his regard as stated above. You have shown sale of some plot as business activity and others as capital gain. 1.1 In view of the above, the deduction for Rs. 14,57,522/-on account of investment in residential house at Shastri Nagar as claimed/allowed is also not allowable under the provisions of Act. ii In the balance sheet as on 31.03.2006 enclosed with the return of income you have shown following investments:- i. Investment in land Rs. 7,21,565/- ii. Land at Pal Rs. 12,07,970/- iii. Land at Bilara Rs. 3,04,500/- iv. Air Condiitioner Rs. 42,492/- v. Car Rs. 2,74,854/- vi. Residential House Rs. 79,95,000/- vii. Television Rs. 3,208/- viii. Furniture Fixtures Rs. 9,287/- ix. Mobile instrument Rs. 13,834/- x FDR Rs. 19,366/- xi NSC Rs. 35,364/- xii PPF Rs. 1,22,680/- Perusal of the records as well as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Gee Vee Enterprises v. Addl. CIT (99 ITR 375) holding that the Commissioner can regard the ITO's order as erroneous on the ground that in the circumstances of the case the ITO should have made further enquiries before accepting the statements made by the assesses in his return." 4. This notice was complied with through written submissions [w/s] filed on 14.3.2011. The gist of submissions, as incorporated by the ld. CIT read as under: "A. The proceedings u/s 263 initiated in the case of the assessee for A.Y. 2006-07 are not justified in the facts and circumstances and are not in consonance with the provisions of law and well settled judicial decisions. It is submitted that the condition precedent for initiation of such proceedings are apparently not present and the assessment framed in the case of the assessee cannot be said to be erroneous or prejudicial to the interest of the Revenue. B. The assessee had submitted return of income for A.Y. 2006-07 on 31st July 2006 declaring total income of Rs. 11,75,085/-. The main source of income had been the business income as well as long term capital gains. The assessee had duly submitted the computation of long term capital ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more than about 5 years prior to the sale. These were long term investment made by the assessee. Further, since, the assessee had purchased new residential house and therefore, the plots which were held by the assessee as investment were sold and the proceeds were utilized in investment in residential house. The income so derived was rightly shown income from long term capital gains. These investments year after year had been regularly shown as investment in the Balance Sheets submitted by the assessee and were never claimed to be stock in trade. The ld. AO appreciating the submission made by the assessee on this regard had considered the same as long term gains. It was only therefore, that provisions of section 50C were applied and the rates as per stamp duty purposes was taken for computation of long term capital gains. The ld. AO had therefore, applied his mind on the issue and after considering it appropriate it to be taken as long term capital ad asked the assessee to furnish the copes of registered sale deed examining the value adopted for stamp duty purposes. The perusal of assessment order would reveal the different plots sold by the assessee during the year under considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... H. In PPF Rs.1680 was interest and Rs. 50,000/- was investment made for which necessary evidence was duly submitted during assessment. The investment was made by cheque no.557290 on 24.03.2006. In depreciable assets there has been no investment during the year and only on account of depreciation the value has decreased. In NSC the increase is on account of interest accrued on NSC. The assessee has duly shown such interest in the computation. The old FDR had matured during the year therefore, the value has also decreased. The assessee had duly submitted depreciation charts and details of fixed assets before the ld. AO during the course of original assessment and has produced the book of accounts before the ld. AO which will be evident from para 3 page 2 of the assessment order I. In relation to amount of Rs. 98,000/- in the name of Sahyog Estate P. Ltd., Rs. 17,75,000/- in the name of Shri Sunil Bhandari (HUF), Rs. 2,28,000/- in the name of Smt Anita Bhandari. It is submitted that the same were also duly verified at the time of original assessment. Investment of Rs. 98,000/- in Sahyog Estate is an old balance representing investment in shares of such company these are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the revenue and therefore, the proceedings initiated in the case of the assessee may kindly be dropped. Even if it is presumed that there is another view possible in the matter, the view which the A.O. had taken cannot be said to be erroneous. In the written submission they relied upon various decisions which support the contention of the assessee that under present facts and circumstances in the case of the assessee no such revision proceedings are warranted. 5. After considering the reply of the assessee and after perusing entire records, called for, the ld. CIT(A) found that the main source of income of the assessee is from the purchase and sale of plots/lands. In respect of some plots/land, the assessee has claimed LTCG and has also claimed benefit of section 54F of the Act. The inference of the ld. CIT is that when the purchase and sale of plots/land is the main business of the assessee, his claim qua sale of some plots/land cannot and should not have been treated by the A.O. as 'capital gain' so claimed by the assessee. The assessee ld. CIT has treated this action of the A.O. to be erroneous in so far as it is prejudicial to the interest of the Revenue. He has also foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer is erroneous insofar as it is prejudicial to the interests of the Revenue. The only limitation on his powers is that he must have some material(s) which would enable him to form a prima-facie opinion that the order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of the Revenue. Once he comes to the above conclusion on the basis of the 'material' that the order of the Assessing Officer is erroneous and also prejudicial to the interests of the Revenue, the CIT is empowered to pass an order as the circumstances of the case may warrant. He may pass an order enhancing the assessment or he may modify the assessment. He is also empowered to cancel the assessment and direct to frame a fresh assessment. He is empowered to take recourse to any of the three courses indicated in section 263. So, it is clear that the CIT does not have unfettered and unchequered discretion to revise an order. The CIT is required to exercise revisional power within the bounds of the law and has to satisfy the need of fairness in administrative action and fair play with due respect to the principle of audi alteram partem as envisaged in the Constitution of India as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial on record to arrive at a satisfaction. (ix) If the Assessing Officer has made enquiries during the course of assessment proceedings on the relevant issues and the assessee has given detailed explanation be a letter in writing and the Assessing Officer allowed the claim on being satisfied with the explanation of the assessee, the decision of the Assessing Officer cannot be held to be erroneous simply because in his order he does not make an elaborate discussion in that regard. 8. Reverting to the facts of this case, we have found that the A.O. himself has treated the main income of the assessee from purchase and sale of plots/land. The assessee himself has disclosed this fact over the years. The A.O. has made proper inquiries in this regard. Before us, both parties have taken same stand, as was before ld. CIT. The ld. CIT, D.R has reiterated all the reasons given by the ld. CIT-I, in the appellate order to revise the assessment order. On the other hand, the ld. A.R. has relied on the w/s filed before the ld. CIT and also other documents which have been filed in his paper-book, inter alia. Both the parties have taken us through them and have also placed reliance on prece ..... X X X X Extracts X X X X X X X X Extracts X X X X
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