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TMI Blog2018 (5) TMI 1576X X X X Extracts X X X X X X X X Extracts X X X X ..... of ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition of Rs. 1,21,80,000/-. (b) In the facts and circumstances of the case and in law the ld. CIT (A) has erred in confirming the action of the ld. AO in treating the sold agriculture land as capital asset. The action of ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the action of ld. CIT (A) in treating the non capital asset (agricultural land) as capital asset. (c) In the facts and circumstances of the case and in law the ld. CIT (A) has erred in confirming the action of the ld. AO in treating the agriculture land as short term capital asset. The action of ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the action of ld. CIT (A) in treating the agricultural land as short term capital asset. (d) In the facts and circumstances of the case and in law the ld. CIT (A) has erred in confirming the action of the ld. AO in not allowing the exemption u/s 54B amounting to Rs. 1,11,45,700/-. The act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee for a consideration of Rs. 40,00,000/-. Whereas the assessee has duly explained the source of said investment and further the assessee filed the return of income for the assessment year under consideration. Therefore, the reasons recorded by the AO do not explain the correct facts and the AO has proceeded to reopen the assessment without application of mind and considering the correct facts regarding the return of income furnished by the assessee. The ld. A/R has further contended that even the approval/sanction obtained by the AO from the Additional CIT is not proper as the same was granted in a mechanical routine manner without application of mind. Thus the ld. A/R has contended that the AO has reopened the assessment with a view to verify the purchase of immovable property. Thus the AO misdirected himself in invoking the provisions of section 148 as the correct course of action would have been invoking the provisions of section 143(3) which talks about verification of the facts of return of income. Hence the ld. A/R has submitted that the reasons recorded by the AO are not sufficient to form the belief that the income assessable to tax has escaped assessment. In support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income, however, we note that the said return of income was not filed with the AO Range-2 who is having the jurisdiction over the assessee but the alleged return was, if any, filed with the jurisdiction of Range-5. Thus we find that the AO was having no material or information about the return of income filed by the assessee in wrong jurisdiction and, therefore, the assessee cannot take an excuse of such return of income filed in the jurisdiction of the AO other than the AO having the jurisdiction over the assessee. Further, the ld. CIT (A) has also verified this fact through the remand report called from the AO and thereafter decided this issue in para (iii) to (viii) of his order as under :- " (iii) I have duly considered the submission of the appellant, assessment order and the material placed on record. It appears from the copy of acknowledgement form filed by the appellant that apparently it filed its income tax return for the AY 2006-07 under consideration in the office of the Addl. CIT, Range-5, Jaipur whereas the correct jurisdiction was with the AO. In the case of B.M. Malani Vs. CIT (Supra), it was held by the Hon'ble Apex Court that a person cannot take a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the return or by the notice under the first proviso to section 115WF or under the first proviso to section 144 to show cause why the assessment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier. (4) Subject to the provisions of sub-sect ion (3), where an assessee calls in quest ion the jurisdict ion of an Assessing Off icer, then the Assessing Officer shall, if not satisfied with the correctness of the claim, refer the matter for determinat ion under sub-sect ion (2) before the assessment is made. (5) Notwithstanding anything contained in this section or in any direction or order issued under section 120, every Assessing Officer shall have all the powers conferred by or under this Act on an Assessing Officer in respect of the income accruing or arising or received within the area, if any, over which he has been vested with jurisdiction by virtue of the directions or orders issued under sub-section (1) or sub-section (2) of section 120." (v) Thus, it is to be noted that as per the provisions of section 124(5) of the Act, the present AO had the territorial jurisdiction over the appellant. Further, as per provisions of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant, it is held that the AO has initiated proceedings u/s 147 of the Act in a valid and lawful manner. Hence, this ground of appeal is hereby rejected. As these grounds of appeal are related to determination of Long Term Capital Gain relating to land sold by the appellant during the year under consideration, not allowing the cost of acquisition in respect of land sold and also not allowing the exemption u/s 54B of the Act on account of purchase of agriculture land as claimed to be purchased by the appellant. Hence, these are being adjudicated together." When the return of income was not filed with the AO then the alleged return of income filed with the wrong jurisdiction cannot be considered for the purpose of deciding the validity of reopening as the AO at the time of initiation of proceedings under section 148 has to form the belief on the basis of the material available with the AO which is sufficient for coming to the conclusion that prima facie the income assessable to tax has escaped assessment. As regards the objection against the approval of reasons for re-opening, we note that no such objection was raised before the authorities below. Further, the Addl. CIT gran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imits and accordingly is liable to Long Term Capital Gain. The ld. A/R of the assessee has now disputed the correctness of the said Certificate issued by the Tehsildar on the ground that the distance of the property has to be considered as on the date of Notification dated 6th January, 1994. So far as the issue of considering the distance from Municipal Limits as on the date of Notification dated 6th January, 1994, we find that this issue was considered by this Tribunal and now upheld by the Hon'ble Jurisdictional High Court in case of Principal CIT vs. Shri Kheti Lal Sharma HUF (supra). However, the question remains that whether on the date of Notification the distance of the property in question was situated within the distance of 8 KM from the Jaipur Municipal Limits or beyond 8 KM. We further note that as per the language of section 2(14)(iii)(b) the distance has to be between the Municipal limits and the area in which the property is situated. Thus the distance is required to be considered from the Municipal limits and the area and not the particular property. Since the assessee has raised an issue which is factual in nature as to whether the area in which the property is situ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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