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TMI Blog2019 (8) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of Section 69 are applicable in the case of the assessee. 3. That the assessee craves leave to add, amend, modify or alter any ground of appeal on or before the hearing. 3. The facts in brief are that the assessee is having income from business from Architectural Consultancy and Interior Designer partnership firm and other sources. A search & seizure action u/s 132 of the Income Tax Act, 1961 (hereinafter called as 'the Act') was carried out on 29.1.2014 and the assessment u/s 153A r.w.s. 143(3) of the Act for the assessment year 2008-09 was framed vide order dated 23.3.2016. Subsequently, the Ld. Pr. CIT from the records observed that the assessee had shown advances given to one Ms. Smriti Chauhan of Rs. 59,73,000/- as on 31.3.2011 under the head 'loans and advances' whereas Ms. Smriti Chauhan disclosed unsecured loan of Rs. 59,23,000/- from the assessee as on 31.3.2011. Thus, it was inferred by the Ld. Pr. CIT that the assessee had claimed bogus loans and advances of Rs. 50,000/-. On this ground, the Ld. Pr. CIT invoked the provisions of section 263 of the Act and issued a notice u/s 263(1) of the Act on 31.8.2017. In response thereto, the assessee was represented throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ld. CIT(DR) further submitted that the A.O. failed to take note of this fact and therefore, ex-facie order of the A.O. is erroneous and so far it is prejudicial to the interest of the revenue. Ld. CIT(DR) argued that it is not the question of a small figure. It is the question whether the order is erroneous and prejudicial to the interest of the revenue. In rejoinder, Ld. Counsel for the assessee submitted that neither Ms. Smriti Chauhan was examined by the Ld. Pr. CIT nor any cross examination was given to the assessee. Merely because Ms. Smriti Chauhan has shown unsecured loan at a lower figure that too of a meager difference of Rs. 50,000/- only would not make the assessment order erroneous and prejudicial to the interest of the revenue. 7. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. The only ground which the Ld. Pr. CIT revised the concluded assessment that Ms. Smriti Chauhan declared a lesser figure of the advances received from Shri Vipin Chauhan, the assessee herein. Ld. Counsel for the assessee has drawn our attention to paper book page No.5, wherein the ledger account of Ms. Chauhan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sible. An order is not erroneous, unless the CIT hold and records reasons why it is erroneous. An order will not become erroneous because on remit, the Assessing Officer may decide that the order is erroneous. Therefore CIT must after recording reasons hold that the order is erroneous. The jurisdictional precondition stipulated is that the CIT must come to the conclusion that the order is erroneous and is unsustainable in law. We may notice that the material which the CIT can rely includes not only the record as it stands at the time when the order in question was passed by the Assessing Officer but also the record as it stands at the time of examination by the CIT [see CIT Vs. Shree Manjunathesware Packing Products, 231 ITR 53 (SC)]. Nothing bars/prohibits the CIT from collecting and relying upon new/additional material/evidence to show and state that the order of the Assessing Officer is erroneous. 18. It is in this context that the Supreme Court in Malabar Industrial Co. Ltd. Vs. Commissioner of Income Tax, (2000) 243 ITR 83 (SC), had observed that the phrase 'prejudicial to the interest of Revenue' has to be read in conjunction with an erroneous order passed by the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid provision, it is clear that section 69 of the Act can be invoked in the case where the assessee made investment and are not recorded in the books of accounts. It is not so in the case in the present case. Therefore, we are of the view that Ld. Pr. CIT has misdirected himself in coming to the conclusion that the difference between the figures of Rs. 50,000/- i.e. disclosed by the assessee as a loan and advance and disclosed by Ms. Smriti Chauhan as loan and advance received from the assessee. Therefore, the finding of the Ld. Pr. CIT is not accordance with law. Hence, we hold that Ld. Pr. CIT is not justified in holding that the assessment order sought to be revised is erroneous and prejudicial to the interest of the revenue. Therefore, we set aside the order of the Ld. Pr. CIT and restore the original assessment order. The grounds raised in this appeal are allowed. 12. Now coming to the ITA No.53/Ind/2018, the assessee has raised following grounds of appeal: 1. That on the facts and in the circumstances of the case of the assessee the order passed is barred by limitation. 2. That on the facts and in the circumstances of the case of the assessee, the Ld. CIT was not ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power of revision is not restricted to the original order. Ld. Pr. CIT is authorised to revise any order passed under the Income Tax Act, if he is satisfied that order so passed is erroneous in so far as it is prejudicial to the interest of the revenue. Ld. CIT(DR) further submitted that the assessee is raising such absurd objection just for the sake of objection. It is not supported by the law. 15. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. We do not find any merit in the ground raised by the assessee as the impugned order is well within limitation as prescribed under the law. The order so revised was passed on 23.3.2016. The impugned order u/s 263 of the Act is dated 16.11.2017. As per the section 263(2) of the Act, no order can be passed u/s 263(1) of the Act after the expiry of 2 years from the end of the financial year in which the order sought to be revised was passed. In the present case, the impugned order was passed on 16.11.2017, which is well within time. Hence, ground No.1 is dismissed being devoid of any merit as the law speaks of the order sought to be revised but not the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. D.R. further argued that Ld. Pr. CIT looking to the facts has merely restored the issue to the file of the A.O. for decision afresh. If the assessee is entitled for any deduction, he can prove before the A.O. Ld. CIT(DR) submitted that no prejudice is caused to the assessee under the facts of the present case. 18. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. We find that Ld. Pr. CIT has observed in the impugned order as under: "4.2 the submissions of the assessee is duly considered. The assessee has failed to substantiate with official documents to support his claim that land sold is being agricultural land. On perusal of the sale deed, it is apparent that the capital gain had arisen on sale of plot admeasuring area of 9310 sq.ft. to M/s. Krishna Builders on 2.6.2011 for Rs. 22,50,000/- (being half share of the land) and claimed exemption u/s 54B of the Act of Rs. 16,92,237/-. It is also noticed that nowhere in the sale deed it is mentioned that the impugned land sold is agricultural land except in page No.02, wherein "krishi" has been handwritten before "Bhumi". 4.3 the relevant portio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts placed on record, I am of the view that the Assessing Officer did not examine the facts of the case properly as it was required from him. Considering the above facts, I am satisfied that the order passed by the Assessing Officer u/s 153A r.w.s. 143(3) for A.Y. 2012-13 on 23.3.2016 is erroneous and prejudicial to the interest of the revenue. Therefore, the order passed by the Assessing Officer u/s 153A r.w.s. 143(3) for A.Y. 2012-13 on 23.3.2016 is set aside. The assessing Officer is directed to reframe the assessment after examining the above said issue and after affording sufficient opportunity to the assessee of being heard." 19. The basis of treating the agricultural land by the Ld. Pr. CIT as capital asset is that no evidence was placed on record proving that the agricultural activity was being carried out by the assessee. We find that a bare reading of section 54B of the Act makes it clear that for being eligible for deduction u/s 54B of the Act, the land ought to have been used for agricultural purposes for 2 years immediately preceding the date on which the transfer took place. The assessee has not brought any material on record suggesting that the land was being us ..... X X X X Extracts X X X X X X X X Extracts X X X X
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