9911796707
TMI Blog2021 (9) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... 40/-. The assessee`s case was selected for scrutiny under CASS and the assessment under section 143(3) of the Act was framed on 26.02.2015, determining the total income of Rs. 15,65,860/-. 4.Later, the Learned Principal Commissioner of Income Tax, (In short "ld.PCIT"), has exercised his jurisdiction under section 263 of the Income tax Act, 1961.Therefore, a notice u/s 263 of the Act, dated 10.03.2017, was issued to the assessee, which is reproduced below: "To, Shri Rampratap S. Ghasoliya, 20-B, Aadarsh Nagar Society, Greed Road, Kaliawadi, Navsari-396445 Sub:- Notice u/s. 263 of the I.T. Act, 1961 in your case i.e. Shri Rampratap S. Ghasoliya, (PAN:- AAOPG5099F) for A.Y. 2012-13-reg. 2.In this case, the assessee filed his return of income on 12.09.2012 declaring total income of Rs. 14,67,640/-. The case was selected for scrutiny under CASS and the assessment u/s 143(3) was passed on 26.02.2015 determining the total income of Rs. 15,65,860/-. 3.The AO i.e. ITO, Ward-4, Navsari and the Range head i.e. Jt. CIT, Navsari Range, Navsari, vide their letters dated 28.02.2017 and 08.03.2017, respectively have proposed that the assessment order in this case is erroneou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and indexing the same in the forwarding/covering letter. 7.Please note that the required details should be submitted after numbering the documents enclosed and indexing the same in the forwarding/covering letter. You can attend the hearing either personally or through your duly authorized representative or can file written submissions on or before the stipulated date and time of hearing. [Satbir Singh] Pr. Commissioner of Income Tax, Valsad" 4. In response to the above show cause notice, the assessee has submitted its reply on 23.03.2017 before the ld PCIT( vide paper book page no.1). However, the learned PCIT did not consider assessee's reply and pass the order under section 263 of the Act. The ld PCIT observed that assessing officer has failed to make requisite inquiries about the valuation of property as per circle rate /stamp duty rate, in respect of the plot sold, that is, the applicability of the provisions of the section 50C, have not been examined by the assessing officer. The capital gains arising on conversion of the immovable property, as per the provision of section 45(2) of Income Tax Act, have not been examined by the assessing officer. Besides, the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to make requisite inquiries about the valuation of property as per circle rate /stamp duty rate, in respect of the plot sold. The assessee is found to have declared sale consideration of Rs. 60,00,000/- as against the valuation of Rs. 1,69,26,000/- as per the stamp duty/circle rates. Therefore, the applicability of the provisions of the section 50C, which is prima facie attracted in this case, have not been examined by the assessing officer. (2). The assessee is found to have converted the said immovable property into stock-in-trade in F.Y. 2010-11 i.e. A.Y.2011-12. Therefore, the capital gains arising on conversion of the immovable property should have been brought to tax in the year of conversion as per the provision of section 45(2) of Income Tax Act, 1961. (3).The assessee is found to have shown contract amount of Rs. 60,00,000/- and has claimed expenses under various heads. Examination of records show that these are not contract receipts but sale consideration received on transfer of said immovable property. The Assessing Officer has failed to make the requisite inquiries about this issue. 10. So far the first issue is concerned, which relates to sale consideration of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axesh Gandhi, Accountant, duly authorized, attended from time to time and furnished the details called for. The details furnished have been verified and placed on record. Books of accounts produced have been examined on test check basis. The case was discussed with him. [3]The assessee derives income from business of Contractor. [4]On going through the return of income filed for the year under consideration, it is noticed that the assessee has shown opening stock amounting to Rs. 56,80,077/- whereas it is seen from the return of income filed for the A.Y.2011-12, the assessee has shown closing stock of Rs. 56,60,713/-. Thus, difference comes of Rs. 19,364/-. On being asked the A.R. of the assessee, vide order sheet entry, dated 18.02.2015 regarding difference of Rs. 19,364/-, the A.R. of the assessee has submitted penalty order No.CH/NA/Sharatbhang/case no. 1/2005 dated 15.06.2010 passed by the Collector, Navsari. The aforesaid penalty has been paid by the assessee and added into the value of closing stock, which is not allowable. The A.R, of the assessee offered no objection in this regard and hence an amount of Rs. 19,364/- is added back to the total income of the assessee." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of law; or (iii)Assessing Officer's order is in violation of the principle of natural justice; or (iv) if the order is passed by the Assessing Officer without application of mind; (v) if the AO has not investigated the issue before him; then the order passed by the Assessing Officer can be termed as erroneous order. Coming next to the second limb, which is required to be examined as to whether the actions of the AO can be termed as prejudicial to the interest of Revenue. When this aspect is examined one has to understand what is prejudicial to the interest of the revenue. The Hon'ble Supreme Court in the case of Malabar Industries (supra) held that this phrase i.e. "prejudicial to the interest of the revenue'' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Their Lordship held that it has to be remembered that every loss of revenue as a consequence of an order of Assessing Officer cannot be treated as prejudicial to the interest of the revenue. When the Assessing Officer adopted one of the courses permissible in law and it has resulted in loss to the revenue, or where two views are possible and the Assessing Officer has taken one view with ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
