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TMI Blog2019 (12) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... has sold the land at a price mentioned in the sale deed, then onus is not on the assessee to show that from where the purchasers have paid the money. Thus, the onus as cast upon the assessee stood duly discharged and Assessing Officer has correctly allowed the claim of Long Term Capital Loss. Revisionary order passed u/s.263 by the ld. CIT cancelling the assessment order is not sustainable and hence is quashed. Thus, the appeal of the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... .11.1983. The assessee's case was selected for scrutiny on the ground of 'Long Term Capital Gain and cash deposits in bank account and assessee have also transferred one or more properties during the year". 3. As brought on record by the ld. counsel for the assessee that during the course of assessment proceedings before the Assessing Officer, the assessee had submitted all the relevant documents vide letter dated 03.11.2016 along with copy of valuation report, statement of computation of capital gain, copies of sale deeds, bank statements, etc. All these documents have also been placed in the paper book before us from pages 21 to 450. Thereafter, the Assessing Officer specifically required the assessee to furnish further details and explanation vide letter dated 18.11.2016 along with the copy of awards and details regarding mode of sale consideration receipt from each of the buyers of the land. All these documents were furnished before the Assessing Officer. The copies of which are appearing from pages 451 to 469 of paper book. After examining all these details and inquiry by the Assessing Officer, he accepted the return of income and also the Long Term Capital Loss vide order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purchases regarding the genuineness of the transaction of the payment made. 4. In response, the assessee filed the detailed submission and reply explaining the position in respect of each of the observation made by the Ld. CIT in his show cause notice giving reference to the documents already submitted during the course of assessment proceedings which were also submitted before the Ld. CIT. The relevant reply of the assessee has been incorporated in the impugned order from pages 3 to 6. However, the Ld. CIT rejected the assessee's explanation and canceled the assessment order after observing and holding as under: "a. It is evident from the records that during the year under consideration, the assessee was maintaining two banks accounts namely, with Punjab National Bank and Deutsche Bank. Cash amounting to ₹ 1,07,81,000/- was deposited in the bank account maintained with Punjab National Bank. During the proceedings under section 263 of the Act, the assessee submitted the details of credit entries of both the bank accounts with narration and claimed that the cash deposited in the bank accounts is from the sale proceeds received by the assessee. The. AO is directed to ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer along with copy of valuation report and map of the area and also the award. The complete details regarding sale consideration received from sale through sale deed deposited in the bank account were also submitted. The Assessing Officer had examined all the cash deposits in the bank account after reconciling it with the sale deed, has accepted the computation of the capital gain. The assessee had sold small piece of land of ₹ 114.6 sq. mtrs. and also aggregate area of land of 6207.08 sq. mtrs out of the area in the valuation report of 16561 sq. mtrs. The entire saleable area sold during the year has been mentioned in each of the sale deed. Balance area of the land was sold in the subsequent years. The observation of the ld. CIT to the fact that TDS was not deducted by the purchaser, are not relevant at all and this cannot be basis for holding the order as erroneous. He submitted that Explanation-2 inserted in Section 263 w.e.f. 01.06.2015 is not applicable in the present case, because inquiry has been conducted by the Assessing Officer during the course of assessment proceedings. In support, he relied upon the various decisions of the Tribunal and also t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l High Court or Hon'ble Supreme Court. Thus, it is sine quo non that for treating the order passed by the Assessing Officer to be erroneous and prejudicial to the interest of Revenue, the order passed by the Assessing Officer is without making inquiries or verification or is not in accordance with order/instruction passed by the CBDT or Hon'ble Jurisdictional High Court or Hon'ble Supreme Court. It is also quite settled law that the ld. CIT while exercising his revisionary jurisdiction u/s. 263 and reaching to a conclusion that inquiries or verifications has not been done by the Assessing Officer, then it is incumbent upon the CIT himself to undertake minimal inquiry so as to come to a conclusion that inquiry by Assessing Officer is not correct or the assessment order passed was erroneous and prejudicial to the interest of revenue. This legal position has been explained by the Hon'ble Jurisdictional High Court in the case of ITO vs. DG Housing Projects Ltd., (2012) 343 ITR 329 (Delhi) and DIT vs. Jyoti Foundation, 357 ITR 388 (Del.). Again this principle has been reiterated again in the judgment of PCIT vs. Modi Care Ltd. in ITA No. 759/216, vide judgment and order dated 14th Sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k statement showing the nature of transactions. It was categorically mentioned that the cash received on the sale of land as mentioned in the sale deed were deposited in the PNB, Roorkee. Thereafter, the Assessing Officer had asked for further details, in response to which the assessee had submitted the manner in which land was inherited from his forefathers and how it was acquired much before 01.04.1981. The details of the partitions amongst the brothers, along with arbitration award whereby various pieces of land were inherited by all the brothers were also submitted. Explain regarding amount received on sale consideration and area of land sold, circle rate and the amount received as per the circle rate along with details of cash received were also furnished which were also tallied from the bank account. If the cash deposits in the bank account are duly reconciled and matched with the sale deed wherein the cash consideration has been mentioned, then the source of the cash deposit stands approved. 9. As regards the observation of the ld. CIT that there was certain discrepancies in the valuation report, the ld. CIT could not have simply rejected the valuation report on his own an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on report relate. In facts considering the location of this particular plot fair market value as on 01/04/1981 was even more that a ₹ 1225/sq. mtr. that is the higher rate mentioned in the valuation report. Since this was a small piece of land no separate valuation report was obtained and the rate 1000/sq. mtr. was adopted on a conservative side and in fact higher amount of capital gain was offered. iii) In regard to the area which was available with the assessee for sale as per award/family settlement in 2013, when the valuation report was obtained was the area as mentioned in the valuation report. Map of the area which was available to the assessee on the basis of valuation report was given by the valuer is also attached as Annexure 5 for your ready reference. All the sale transaction made during the year for which valuation report was given by the valuer and the same dully has been reconciled by the Assessing Officer. iv) In regard to the observation that the assessee has sold front area of 2305.47 sq. mtr. as against front area mentioned in the valuation report of 2172 sq. mtr., we may submit that front area sold as per the Sale Deeds in only 1902.99 sq. mtrs The afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest of revenue. This has been held so in the catena of judgment by the Hon'ble Jurisdictional High Court as cited above. Here in this case, the ld. CIT has failed to conduct any kind of inquiry or verification himself and has simply on premise has expressed his opinion that Assessing Officer should have conducted inquiry in a particular manner. Such an action by the Ld. CIT cannot be upheld under Explanation 2 to Section 263. Explanation 2 does not envisage that Assessing Officer should go to the last point of inquiry on the issue. What is expected from the Assessing Officer to carry out reasonable and pragmatic inquiry so as to justify his actions and which manifests his application of mind. If inquiry is found to be fleeting or eyewash then it can be held that inquiry has not been done by the Assessing Officer. Here in this case, we find that Assessing Officer has examined all the relevant documents asked by him from time to time and after verifying the documents and copy of sale deed he has reached to a conclusion that the source of cash deposits in the bank account has been explained which were tallying from the copy of sale deeds. Even the computation of Long Term Capita ..... X X X X Extracts X X X X X X X X Extracts X X X X
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