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TMI Blog2018 (7) TMI 1865X X X X Extracts X X X X X X X X Extracts X X X X ..... nces. It is observed that CIT has undertaken the revisional proceedings only to substitute his views of taxability in the impugned year over the view of the AO, who accepted that it is not taxable in the impugned assessment year. Thus, the CIT was not justified in law in holding that the impugned order is erroneous. - Decided in favour of assessee. - I.T.A. No. 932/HYD/2017 - - - Dated:- 20-7-2018 - SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER For the Appellant : Shri K.A. Sai Prasad, AR For Respondent : Smt. Alka Rajvanshi Jain, CIT-DR ORDER PER B. RAMAKOTAIAH, A.M. : This is an appeal by assessee against the order of the Pr.Commissioner of Income Tax-5, Hyderabad dated 27-03-2017, u/s. 263 of the Income Tax Act [Act], setting aside the assessment. Assessee has raised eight grounds, questioning the jurisdiction of the Ld.CIT in setting aside the order. 2. Brief facts of the case are that assessee along with Shri L. Ravinder Reddy sold immoveable property admeasuring 935 Sq. Yds., in Shaikpet Village, situated at Road No. 12, Banjara Hills, Hyderabad, vide document No. 4362/2008, dt. 12-12-2008 for a consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interim orders of the jurisdictional High Court restraining the purchaser from alienating the land to any party. Ld.CIT, however, did not agree with the contentions of assessee and held that on the facts of the case, the provisions of Section 45(1), Section 2(47)(i) and 2(47)(v) would apply and the capital gains on sale of property are assessable in the year under consideration. His final order in para 6 is as under: 6. The assessment order u/s. 143(3) dt. 27.03.2015 is erroneous, as it was passed in contravention of the clear, express and specific provisions of the Income Tax Act. The assessment order caused prejudice to the Revenue since the capital gains escaped assessment. Therefore, I hold the assessment order is erroneous in so far as it is prejudicial to the interests of the Revenue. The assessment order is setaside to be done afresh. The A.O. is directed to assess the capital gains arising from the sale of the above mentioned immovable property in the hands of the assessee in the year under consideration. Further, the assessing officer is directed to consider the applicability of the provisions u/s. 50C while computing the capital gains and pass the assessment order afr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT, in ITA No. 3498/Mum/2017, dt. 02-01-2018; vi. Sri Srinivasa Rao Kalagara Vs. Dy.CIT, in ITA No. 726/Hyd/2015, dt. 18-09-2015; 5. Ld.DR, however, submitted that AO has not made property verification of the documents and are relied on the detailed order of the Pr.CIT to support that the jurisdiction was validly invoked. 6. We have considered the rival contentions and perused the documents placed on record and case law relied upon. It is true that the proceedings were initiated u/s. 147 on receipt of information that a particular property has been transacted and assessee in response not only filed the return of income but also explained in the course of assessment, the disputed nature of the transaction, the litigation between the parties and final compromise settlement dt. 21-09-2013 before the Lok Adalat. It is not a case where enquiries have not been done by the AO. The enquiries have been conducted and AO was satisfied that capital gains have indeed does not arise. 6.1. The opinion of the CIT that capital gains should have brought to tax in this year based on the interpretation of law, is another opinion which cannot be substituted with that of the AO in the procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground holding that order of the AO was erroneous and prejudicial to the interest of the revenue. In this regard it is seen that the show cause notice u/s.263 of the Act issued by the CIT was dated 20.9.2016. The Assessee had filed his reply to the said show cause notice on 12.1.2017 and on the very same date, the CIT had passed the impugned order. It is thus clear that the Assessee was not put on notice that the. CIT intends to invoke jurisdiction u/s.263 of the Act on the ground of lack of enquiry by the AO. It is also seen that when CIT's specific objection in the show cause notice u/s 263 of the Act on issues other than the issues on which the CIT in his show cause notice has alleged lack of enquiry on the part of the AO, the Assessee has given his explanation as to how on those issues the order of the AO was not erroneous. The CIT before exercising jurisdiction u1s.263 of the Act by setting aside the order of the AO, ought to have given his own specific finding on those objections and without doing so, the CIT cannot exercise jurisdiction u1s 263 of the Act. The Hon'ble Delhi High Court in the case of ITO Vs. D.G.Housing Projects Ltd. (supra) has taken the view that w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO, the order of CIT was held bad in law. 9. Similar view was also taken in the case of M/s. Amira Enterprises Ltd., Vs. Pr.CIT in ITA No. 3206/Del/2017, dt. 29-11-2017, wherein the Pr.CIT specifically invoked the explanation-(2). 10. Considering the facts of the case and principles of law on the issue, it cannot be held that AO did not carry out any enquiry or verification which should have been done. Since the proceedings itself were initiated u/s. 147 for the purpose of bringing into tax the capital gain on the information received from the Sub-Registrar about the sale deed, AO did enquire and accepted the contentions of assessee that the transaction was in-dispute and ultimately was settled in September, 2013 before the Lok Adalat. AO has accepted the explanation and did not consider it fit enough to bring capital gains to tax in AY. 2009-10. Thus, AO has taken a plausible view on the facts and circumstances of the case. Even though Ld.CIT has drawn certain inferences about the legal provisions, yet it can be seen that they are debatable in nature. For this, CIT had not brought any material on record either making further enquiries or by verifications to substantiate his ..... X X X X Extracts X X X X X X X X Extracts X X X X
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