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TMI Blog2021 (10) TMI 1320X X X X Extracts X X X X X X X X Extracts X X X X ..... was utilized for making investment in the immovable property. As in the instant case, the assessee has sold certain immovable property to eight persons through registered sale deed and received sum of 50,78,420/-(which includes Cheque of 2,65,420/- and the remaining amount in cash) and the sale consideration so received was utilized for making investment in immovable property and these details were placed before the AO in the form of list of persons and confirmation letters and after proper application of mind, he accepted the submissions of the assessee, and, therefore, it cannot be said that there was no enquiry or inadequate enquiry by the AO. Appeal of assessee allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... E OF THE PR.COMMISSIONER OF INCOME T AX-2, 2nd FLOOR ,AAYAKAR BHAWAN, RAJASWA VIHAR, BHUBANESWAR - 751 007. F. No.Pr.CIT-2/BBSR/J & T/263/2018-19/4023 Dated, Bhubaneswar the 16th Jan.,2019. To SHRI SANGRAM KESHARI SAMANTARAY, PLOT N0.38, CHINTAMANISWAR AREA, BUDHESWARI, BHUBANESWAR -751006. PAN: BBOPS7915N Sir, Sub: Initiation of proceedings u/s 263 of the I.T.Act,1961 for the Asst. Year 2012-13 - Matter regarding. The assessment in your case for the Assessment Year 2012-13 was completed by the Assessing Officer (here-in-after A.O.) namely ITO, Ward-5(3), Bhubaneswar vide order u/s 143(3)/147 of I.T.Act ,1961 dated 10.11.2016 determining total income at ₹ 3,41,780/-. On verification of case record it is observed that you have' purchased immovable property for a consideration of ₹ 48,48,OOO/- and paid Stamp Duty of ₹ 1,60,OOO/- and Registration Fee of ₹ 82,400/- totaling ₹ 50,90,400/-. With regard to the source of investment in the immovable property, you have claimed to have received advances for sale of land from eight different persons. On the basis of confirmation received, the AO has accepted the source of investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t give rise to take a view that the order of assessing officer is erroneous and prejudicial to the interest of revenue. However, Ld. Pr. CIT was not satisfied with the submissions made by the assessee and concluded to hold the order of the assessing officer as erroneous so for as prejudicial to the interest of revenue as the AO had not made required enquiry/investigation regarding investment made by the assessee in immovable property and accordingly the Pr.CIT set aside the assessment order to the file of AO to redo the assessment after making necessary verification and after giving reasonable opportunity of being heard to the assessee. 8. Now the assessee is in appeal before this Tribunal. 9. Ld. counsel for the assessee vehemently argued referring to the following written submission and placing reliance on decisions mentioned herein :- 1. No independent application of mind of The Ld. PClT as the issue is based merely on the audit observation and same language has been mentioned in the consequential asst order and 263 order Para 2 of page 2 of Asst order u/s 263/143(3). 2. AO has verified the source of investment issue in details after considering all the necessary details/d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of advance/sale consideration received from various parties. Reliance was placed on the judgment of Hon'ble Madhya Pradesh High Court in the case of M.B.Tyres, 11 TAXMANN 208 and the judgment of Hon'ble Himachal Pradesh High Court in the case of Virbhadra Singh (HUF) 86 Taxmann.com 113. Therefore, ld. DR submitted that the order passed by the Pr.CIT deserves to be upheld. 12. We have heard rival contentions and perused the records placed before us by to the sides and with the assistance of the ld. Counsel, we have considered the documentary evidences brought on record in the form of Paper Book in light of Rule 18(6) of ITAT Rules and have also perused the judicial decisions relied upon by both the sides. 13. We would like to reproduce the provisions of Section 263(1) of the Act, which read as under :- Revision of orders prejudicial to revenue. 263. (1) The Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person. 14. It is a settled position of law that powers u/s 263 of the Act can be exercised by the Ld. Pr. Commissioner on satisfaction of twin conditions, i.e., the assessment order should be erroneous and prejudicial to the interest of the Revenue. By 'erroneous' is meant contrary to law. Thus, this power cannot be exercised unless the Ld. Pr. Commissioner is able to establish that the order of the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. Thus, where there are two possible views and the Assessing Officer has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry. Our view is fortified by the decision of Hon'ble High Court of Bombay in the case of CIT vs. Nirav Modi, [2016] 71 taxmann.com 272 (Bombay). 15. This view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... servation of the High Court reads as under: "63. We find the Hon'ble Delhi High Court in the case of Vikas Polymer reported in 341 ITR 537 has held as under: "We are thus of the opinion that the provisions of s. 263 of the Act, when read as a composite whole make it incumbent upon the CIT before exercising revisional powers to : (i) call for and examine the record, and (ii) give the assessee an opportunity of being heard and thereafter to make or cause to be made such enquiry as he deems necessary. It is only on fulfilment of these twin conditions that the CIT may pass an order exercising his power of revision. Minutely examined, the provisions of the section envisage that the CIT may call for the records and if he prima facie considers that any order passed therein by the AO is erroneous insofar as it is prejudicial to the interest of the Revenue, he may after giving the assessee an opportunity of being heard and after making or causing to be made such enquiry as he deems necessary, pass such order thereon as the circumstances of the case justify. The twin requirements of the section are manifestly for a purpose. Merely because the CIT considers on examination of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw. We, therefore, quash the same and grounds raised by the assessee are allowed." 18. In the light of the provisions of Section 263 of the Act and the decision relied hereinabove and examining the facts of the case, we find that the ld.AO for completing the assessment u/s.143(3) r.w.s.147 of the Act, dated 10.11.2016 initiated the proceedings, for the specific purpose of verification of the high value transaction, data received from the Sub-Registrar Khandagiri as per which the assessee had purchased the immovable property for a sum of ₹ 48,48,000/-. Since the assessment proceedings were for this specific purpose the ld. AO called for necessary details which included various documents, bank accounts and list of persons, who gave cash sum of ₹ 48,13,000/- to the assessee, which was utilized for making investment in purchase of immovable property. In the impugned order also the ld. Pr.CIT has accepted the fact that the assessee had filed various confirmation letters before the AO and accepted the same as source of investment in the immovable property. Ld. Pr.CIT also admitted the fact that most of the persons have admitted that they have given advance in cash but t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to show that further inquiry/investigation was required or further scrutiny should be undertaken. The methodology adopted by the assessee for revenue recognition was being consistently followed by the assessee during previous and subsequent assessment years and same cannot be tinkered or disturbed by placing new method of revenue recognition wherein work in progress shown by the assessee has not been taken into consideration. In such type of case, inquiry should have been conducted by the revisional authority himself to record the finding that the assessment order was erroneous. 23. In the present case, the Pr. CIT has not made inquiry himself on the submission/reply of the assessee to before exercising his power u/s.263 of the Act vide dated 23.3.2018 (APB pages 59 to 68) and relevant part as reproduced by the ld Pr. CIT in para 4 of the impugned order. He merely set aside the assessment order and directed the AO to redo the assessment denovo on the issue, which is not permissible as per principle laid down by Hon'ble Delhi High Court in the cases of Jyoti Foundation (supra) and DG Housing (supra). 24. The ld AR in his submission relied upon the views expressed in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so placed on the decision of coordinate Indore Bench in the case of M/s. Radhishwari Developers P. Ltd. (Now Known as R.C. Warehousing Pvt. Ltd. ), ITA No.493/Ind/2018, order dated 20.07.2021, wherein the Tribunal has held as under :- 44. We, therefore, under the given facts and circumstances of the case, find that detailed information was called for by the Ld. AO, specific reply submitted to each of such query by the assessee, independent enquiry conducted by the Ld. AO by issuance of notice u/s 133(6) of the Act and are satisfied that the ld. AO has conducted adequate and detailed enquiry to investigate and examine all the unsecured loan taken during the year including the loan taken from cash creditors named in the show cause notice issued u/s 263 of the Act and find that the Ld. AO has taken one of the permissible view in law by verifying the identity of the cash creditors, got satisfied with the genuineness of the transactions between the assessee and cash creditors and also satisfied with the creditworthiness of the cash creditors. We further find that this is not a case of no enquiry or inadequate enquiry and also find that Ld. Pr. CIT had not carried out any independent e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case and in the light of the decision referred hereinabove and also observed that the decision referred by the ld. DR of the Revenue are distinguishable and not applicable in the instant appeal, are of the considered view that in the instant case, the assessee has sold certain immovable property to eight persons through registered sale deed and received sum of ₹ 50,78,420/-(which includes Cheque of ₹ 2,65,420/- and the remaining amount in cash) and the sale consideration so received was utilized for making investment in immovable property and these details were placed before the AO in the form of list of persons and confirmation letters and after proper application of mind, he accepted the submissions of the assessee, and, therefore, it cannot be said that there was no enquiry or inadequate enquiry by the AO. We, thus, find no merit in the revisionary proceedings carried out by the ld. Pr.CIT holding the order of AO dated 10.11.2016 as erroneous and prejudicial to the interest of revenue and, therefore, the impugned proceedings u/s.263 of the Act are quashed. We accordingly restore the assessment order dated 10.11.2016 framed u/s.143(3) r.w.s.147 of the Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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