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TMI Blog2019 (4) TMI 1378X X X X Extracts X X X X X X X X Extracts X X X X ..... uty under s.263 of the Act could not remain oblivious of the facts objectively drawn. There is an apparent plausibility in the action of the Pr.CIT by resorting to powers under s.263 which is of wide amplitude. The circumstances clearly exist which demands inquiry which was not done by the AO while discharging of statutory function. Thus, armed with fairly extensive powers, the Pr.CIT, in our view, has taken action compatible with circumstances. The purchase transaction culminated and stood consummated during the year under review. Therefore, the cause of action did exist in relation to the assessment order in question. Hence, the Pr.CIT was fully justified in invoking its power under s.263 of the Act to set aside the assessment framed without any application of mind on the crucial aspect which is self-revealing from the stamp duty payment itself. A lack of inquiry on a pertinent point which demonstrates possible revenue leakage of staggering amount would definitely tantamount to the order being both erroneous as well as prejudicial to the interest of the Revenue. The assessee has not estopped in any manner from dealing with the inquiry as specified to the AO and to rebut the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 183 184 at Village Tandalja. The break-up of the said investment as shown in the books comprises of: Particulars Amounts in Rs. Cost of Land 45,61,000/- Cost of Construction Leveling Expenses 42,47,332/- Electric Expenses 86,760/- Fencing Expenses 1,49,600/- NA Expenses 1,33,540/- Raja Chitthi expenses 2,79,010/- Document Registration Expenses 23,36,300/- Total 1,17,93,542/- From the registered document to this effect (bearing No. 4153/2011 (BRA-3/ATA), dated 29.03.2011), it is noticed that against the consideration of ₹ 45,61,000/- declared/shown, ₹ 22,90,300/- is paid as stamp duty. The prevailing Stamp Duty rate i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the AO had initiated inquiry on investments of ₹ 1.17 crore as appearing in the balance sheet on 31.03.2011 with source thereof. The learned AR thereafter referred to MOU (memorandum of understanding) / Banakhat dated 31.08.2007 to point out that the agreement for purchase of land made way back in August 2007. A formal agreement for purchase of the land was ultimately made on 29th March, 2011 to give effect earlier Banakhat. It was submitted that the land was originally agricultural land which was converted into non-agricultural land by the assessee and thereafter the actual registration was carried out in the FY 2010-11 concerning AY 2011-12 in question. The learned AR further emphasized that the payment of sale consideration of ₹ 45,61,000/- was made in FY 2007-08 and possession of the land was taken. Only remaining amount of ₹ 99,000/- was paid to the seller in FY 2010-11 (AY 2011-12) on 26.02.2011. In these circumstances, it was contended that the transaction do not relate to FY 2010-11 in question and therefore, the application of provision of Section 69B of the Act in AY 2011-12 is farfetched and cannot be subject matter of review under s.263 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that onus is squarely on the assessee to justify the correctness of declared cost of purchase on the face of substantially higher jantri value. The learned DR accordingly submitted that no interference with the order of the Pr.CIT is called for in the peculiar facts and the circumstances of the case. 8. We have examined the issue and perused the revisional order of the Pr.CIT passed under s.263 of the Act as well as the case laws cited. From the amount of stamp duty paid (Rs.22.90 Laksh) and cost of land declared at the rate of (Rs.45.61 Lakhs), the Pr.CIT found it self-evident that the value declared towards the consideration of purchase is abysmally low. The Pr.CIT re-computed the jantri value of the land at ₹ 467.40 Lakhs as against ₹ 45.61 Lakhs declared by the assessee. On these facts, the Pr.CIT was of the prima facie view that element of undisclosed income overtly exists in the purchase of land. The question that arises is whether the Pr.CIT was justified in setting aside the assessment order where the cost of purchase of land has been accepted summarily without any tangible inquiry in this regard on the fact of such documents. A perusal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the AO is to make inquiries. Needless to say, the scope of Section 263 of the Act is quite different. In order to invoke Section 263 of the Act, the competent authority is required to find that order sought to be revised is erroneous and caused prejudice to the Revenue. A lack of inquiry on a pertinent point which demonstrates possible revenue leakage of staggering amount would definitely tantamount to the order being both erroneous as well as prejudicial to the interest of the Revenue. Consequent upon the action of Pr.CIT, the assessment order is merely cancelled and set aside to the file of the AO for making relevant inquiries as specified for which objective material is available at the threshold. The assessee has not estopped in any manner from dealing with the inquiry as specified to the AO and to rebut the perception that the prima facie belief on error in the original order is not correct. The assessee is not prevented from supporting its case in any manner before the AO in the proceedings pursuant to Section 263 of the Act. We thus do not see any justifiable reason to interfere with the revisional action of the Pr.CIT. 10. In the result, the appeal of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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