9911796707
Advanced Search 
TMI Blog2018 (11) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer, while making the assessment, calculated the short term capital gain by calculating the difference between sale price of composite property and the value shown by the assessee in its balance sheet as on 31.03.2009. Subsequent to the assessment order, the revisionary jurisdiction was invoked by the Ld. Commissioner of Income Tax u/s 263 of the Act on the ground that the Assessing Officer had ignored that out of the three items i.e. land, building and plant and machinery, capital gain on land could either be short term or long term, depending on the period of holding, as it was not a depreciable asset, whereas building and plant and machinery being depreciable items had to be taxed under 'short term capital gains'. The Ld. Pr. C.I.T. was also of the view that the stamp duty value of the property was to be deemed as full value of the consideration for the purpose of section 48 r/w section 50C of the Act. The Ld. Pr. C.I.T. directed the Assessing Officer to examine the issue afresh and frame the assessment order de novo. The observations of the Ld. Pr. CIT, while cancelling the assessment order, were as under:- (a) The Sale deed of the property shows that the total area of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Pr. CIT Moradabad, further failed to appreciate that the sale of consolidated assets in question, have been incurred as "Slump Sale" attributable to distress conditions and determination of Capital Gain/Loss, thereof is required to be made consequent to provisions of Section 50B and NOT as per Section 50C. Hence the direction to the AO by the CIT is absolutely illegal, bad in law and deserves to be quashed. 4. Because the learned Pr. CIT Moradabad, further failed to appreciate that the Assessing Officer has duly examined the transaction and has chosen to treat the same as "Slump Sale", hence the substitution of his opinion by the CIT is impermissible in law being a pure change of opinion. 5. Because without prejudice the learned Pr.CIT Moradabad, further failed to appreciate that the asset in question is an AGRICULTURAL LAND which is outside the definition of capital assets and hence chargeability of capital gains do not arise, per-se. Further, the Ld. CIT failed to assign incorrect valuations of land/building/plant and machinery by mis-reading the covenants of the instrument of sale. 6. Because without prejudice, the learned Pr.CIT Moradabad, grossly erred in Law, while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s duly considered by the Assessing Officer at the time of the original assessment proceedings and, thereafter, the short term capital gain was computed at Rs. 22,86,227/- and it was submitted that, therefore, it is not the case of the department that the Assessing Officer had not conducted any inquiry on the issue. The Ld. AR further drew our attention to the fact that finding no relief at the level of the Ld. CIT (A) against the addition made on account of capital gains in the original assessment, the assessee had approached the ITAT and the ITAT Delhi Bench, vide order dated 9.4.2018 in ITA No. 3551/Del/2015, had restored the issue to the file of the Ld. C.I.T. (A) with a direction to decide the appeal on merits as the Ld. C.I.T. (A) had passed the order ex parte qua the assessee. The Ld. AR further submitted that in the case of the assessee this was a case of composite sale which would attract the provisions of section 50B of the Act and not section 50C of the Act and, therefore, the Ld. Pr. C.I.T. was patently wrong in directing the Assessing Officer to re-compute the value of capital gains in terms of section 50C of the Act. The Ld. AR further submitted that whether the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of capital gains was duly considered by the Assessing Officer and he proceeded to compute the short term capital gain at Rs. 22,86,227/- whereas it was the assessee's claim during the course of assessment proceedings that no capital gains had been earned. Thus, it is not the case of the department that no information regarding the impugned transaction was called for by the Assessing Officer or that the transaction was not enquired into by the Assessing Officer. It is very much evident that relevant details in this regard were submitted by the assessee during the course of assessment proceedings and the same form part of the record. Therefore, no inference can be drawn that the Assessing Officer has not examined the issue although he may not have expressed it in as many terms as may be considered appropriate by his superior authority and even if the inquiry was inadequate, the same cannot be a ground for revision. It is settled law that an order cannot be termed as erroneous unless it is not in accordance with law. Section 263 does not visualise the substitution of judgment of the Ld. C.I.T. for that of the Assessing Officer. 5.2 It will be expedient to reiterate the governing pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualized where the Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at conclusion and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion. x x x x There must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es enquires, applies his mind to the facts and circumstances of the case and determines the income either by making the accounts or by making some estimates himself. The commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer was on lower side and, left to the commissioner, he would have estimated the income at a higher figure that the one determined by the Assessing Officer. That would not vest the Commissioner with the power to re-examine the accounts and determine the income himself at a higher figure. Further in the case of Infosys Technologies Vs. JCIT (Asst) (2006) 286 ITR (AT) 211, the Bangalore Bench of the ITAT held that where the A.O as examined and considered and issue, though not mentioned in the assessment order, it cannot be said that the order passed was erroneous. In CIT v Gabriel India Ltd. (1993) 203 ITR 108 (Bom), the Hon'ble Bombay High Court held that once the Assessing Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at a conclusion, such a conclusion cannot be considered erroneous simply because the commissioner does not feel satisfied with the conclusion. It may be th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as many terms as may be considered appropriate by his superior authority and even if the same is found to be inadequate the same cannot be a ground for revision. It is clear that an order cannot be termed as erroneous unless it is not in accordance with law. This section does not visualize a case of substitution of the judgment of the Commissioner for that of the AO. Therefore, it cannot be held that in the instant case the AO's order was erroneous and prejudicial to the interest of the revenue within the terms of section 263 of the Act. Once the issue of sale of assets was considered and examined by the Assessing Officer, the Ld. Pr. Commissioner cannot set aside the order without recording a contrary finding. This will be contrary to Section 263 of the Act. 5.7 We also note that the Hon'ble Apex Court in the case of C.I.T. vs. Equinox Solutions (P) Ltd. reported in 393 ITR 566 (SC) has held that that when the entire business with assets and liabilities is sold by the assessee in one go, such sale cannot be considered as sale of short term capital assets and where the entire business is sold in one go, it will be a case of slump sale of a long term capital asset which would be co ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
