9911796707
TMI Blog2021 (3) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment. A plain reading of Explanation to Section 10(2A) of the Act does not summarily rule out an embedded plausibility in the concern of excess deduction claimed as expressed by the Revisional Commissioner. Non-examination of such crucial aspects which has direct bearing on the correct assessment of income has ostensibly rendered the assessment order to be erroneous as well as prejudicial to the interest of the Revenue. We thus hold that the assessment order passed in such gross lack of application of mind causing prejudice is thus amenable to jurisdiction under s.263 - Decided against assessee. - I.T.A. No. 1076/Ahd/2018 - - - Dated:- 22-3-2021 - Shri Rajpal Yadav, Vice President And Shri Pradip Kumar Kedia, Accountant Member For the Appellant : Shri S. N. Divatia, A.R. For the Responden : Shri Virendra Ojha, CIT.DR ORDER PER PRADIP KUMAR KEDIA - AM: The captioned appeal has been filed at the instance of the Assessee against the order of the Principal Commissioner of Income Tax-2, Ahmedabad ( Pr.CIT in short), dated 26.03.2018 passed under s.263 of the Income Tax Act, 1961 (the Act) whereby the assessment order passed by the Assessing Officer (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19, 000 / - and the five new partners bought 10 % s take in the firm on the basis of the said land value. (iii) Again vide the notarized partnership deed dated 14.12.2012, there was further change in partnership deed wherein you and Shri Pratik Bipinchandra Patel have relinquished your complete share holding retrospectively from 30. 9. 2012 in favour of newly introduced 5 parties. (II) It is perused that during the A, Y. 2013 - 14, the firm ' Suyog Infrastructure' has declared income of ₹ 24, 63, 089 / - only whereas you have claimed to have received share of profit of ₹ 2,52,52,038 / - from the Firm which you have claimed as exempt income u/ s 10 (2 A) of the IT Act. While passing the assessment order the AO has not considered the Explanation attached to Section 10 (2 A) of the IT Act according to which quantum of exemption u/ s 10 (2 A) is the amount which bears to the total income of the firm the same proportion as the amount of share in the profits of the firm in accordance with partnership deed bears to such profits. The said income of ₹ 2,52,57,038 / - has not been a part of the income from the firm ' Suyoj Infrastructure ' and thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain the true chargeable income in the hands of the assessee. It was thus concluded that the assessment order passed under s.143(3) of the Act is erroneous in so far as prejudicial to the interest of the Revenue. Consequently, Pr.CIT invoked the revisional powers vested under s.263 of the Act read with Explanation (2) appended thereto and set aside the assessment order and directed the AO to frame afresh assessment order after conducting requisite enquiries on the pertinent issues involved. 5. Aggrieved, the assessee in appeal before the Tribunal. 6. The learned counsel for the assessee Mr. S. N. Divatia submitted at the outset that the necessary background for exercise of revisional power of Pr.CIT does not exist. The learned counsel submitted that the return was filed declaring income correctly as incumbent upon assessee, which was properly assessed by the AO in sync with the provisions of the Act. The learned counsel for the assessee next submitted that pointed question was asked vide notice issued under s.142(1) of the Act dated 14.10.2015 which is extracted as; Details of exempt income earned by you in the year under consideration. Please furnish the source of fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the Pr.CIT for invoking Section 263 of the Act which is summarized as follows: (i) Having regard to change in the constitution of the partnership firm M/s. Suyog Infrastructure whereby both original partners (including the assessee partner) relinquished their shares in partnership in favour of five new partners after valuing the land at ₹ 10,19,19,000/- in F.Y. 2012-13 relevant to AY 2013-14 in place of book value of land acquired in August 2009 at ₹ 4,85,00,000/-, the AO failed to examine the quantum of income eligible for exemption under s.10(2A) of the Act as the exemption claimed is disproportionate to share of profit claimed to be exempt by the partnership firm. It is also alleged that the AO failed to consider Explanation annexed to Section 10(2A) of the Act, especially when the assessee was not a partner in the firm at the end of the financial year as on 31.03.2013. (ii) The sum of ₹ 2,52,52,038/- so received by the assessee from the partnership firm (Suyog Infrastructure) as against the income declared by the partnership firm ₹ 24,63,089/- is not in congruence with exempt income from the partnership firm envisaged under s.10(2A) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion on any of the point raised in the revisional order. Alongside, it also could not be shown that the AO was alive to such pertinent concerns and reason thereof at the time of assessment. A plain reading of Explanation to Section 10(2A) of the Act does not summarily rule out an embedded plausibility in the concern of excess deduction claimed as expressed by the Revisional Commissioner. Non-examination of such crucial aspects which has direct bearing on the correct assessment of income has ostensibly rendered the assessment order to be erroneous as well as prejudicial to the interest of the Revenue. We thus hold that the assessment order passed in such gross lack of application of mind causing prejudice is thus amenable to jurisdiction under s.263 of the Act. 10. At this juncture, we may however hasten to add that we are on the limited point of application of mind to the correctness of exemption eligible to assessee under s.10(2A) of the Act read with other provisions of Act and consequent exercise of jurisdiction vested under s.263 of the Act. Having regard to the peculiar facts of the case, we consciously refrain ourselves from testing the correctness of the allegation of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
