9911796707
TMI Blog2022 (10) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... interest of the revenue as the assessment order was passed after due verification and hence there is no situation which of invoking provisions of section 263 of the IT Act, 1961. 3) Assessee craves leave to add, alter or amend any of the grounds of appeal." 2. Succinctly stated, the assessee company which is engaged in the business of cotton ginning and pressing had e-filed its return of income for the assessment year 2016-17 on 16.10.2016, declaring Nil income a/w current year loss of (Rs.8,84,164/-). Original assessment was thereafter framed by the Assessing Officer vide his order passed u/s.143(3) of the Act, dated 24.12.2018 assessing the income of the assessee company at Rs.83,31,970/- a/w. carry forward of current year loss of Rs.10,70,399/- (as against Rs.8,84,164/- claimed by the assessee). 3. After culmination of the assessment proceedings the Pr. CIT called for the assessment records of the assessee company. It was observed by the Pr. CIT that the order passed by the Assessing Officer u/s.143(3), dated 24.12.2018 was found to be erroneous in so far as it was prejudicial to the interest of the revenue u/s.263 of the Act for four reasons, viz. (i) the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Pr. CIT. Rebutting the aforesaid claim of the assessee, it was observed by the Pr. CIT that as the assessee while calculating the LTCG had taken the cost of acquisition of factory premises, i.e a depreciable asset on which it had claimed depreciation @5%, at Rs.36,65,327/-, therefore, its claim for indexation of the cost of acquisition of the same was not to be allowed. Accordingly, the Pr. CIT on the basis of his aforesaid observations held the order passed by the Assessing Officer u/s. 143(3), dated 24.12.2018 as erroneous in so far it was prejudicial to the interest of the revenue within the meaning of Sec. 263 of the Act, i.e., to the extent he had allowed the assessee's claim of indexation of the 'cost of acquisition' of Rs.3,59,56,858/- qua the factory premises, i.e., a depreciable asset. It was further observed by the Pr. CIT that the failure on the part of the Assessing Officer in not making a reference to the valuation officer of the Department for ascertaining the correct cost of acquisition of the factory land as on 01.04.1981, and summarily accepting the 'cost of acquisition' as was shown by the assessee in its return of income, had also rendered the order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. Backed by his aforesaid observations the Pr. CIT held the order passed by the Assessing Officer as erroneous in so far as it was prejudicial to the interest of the revenue on the aforesaid grounds and set-aside the order passed by the Assessing Officer u/s. 143(3), dated 24.12.2018 with a direction to him to pass a speaking order after affording a reasonable opportunity of being heard to the assessee. 5. The assessee being aggrieved with the order passed by the Pr. CIT under Sec. 263 of the Act, dated 26.02.2021 has carried the matter in appeal before us. 6. We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. 7. We shall first deal with the grievance of the assessee that the Pr. CIT had erred in law and on the facts of the case, in concluding, that it was not entitled for indexation of the 'cost of acquisition' qua the property in question, for the reason that the property transferred was a building, i.e a depreciable asset, on whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree from payment of non- Agricultural Assessment, taxes, Cesses, Electricity and water charges, society's dues and all other outgoings etc. thereon and payable up to date." Apart from that, we find that the "Schedule" forming part of the aforesaid sale deed, dated 16.04.2015 also substantiates the aforesaid factual position, and the same reads as under: "SCHEDULE REFERRED TO ABOVE ALL THOSE pieces and parcel of lands containing by admeasurement 25808.09 Sq. Mtrs (Or 2,77,798.31 Sq. ft.), being a portion of Nazul Plot No.1, Sheet No. 3-C and piece of land containing by admeasurement 3420.70 Sq. Mtrs ( Or 36,820 Sq. Ft.), being a portion of Nazul Plot No.6, Sheet No. 2-D, thus, totaling 29,228.79 Sq. Mtrs ( Or 3,14,618.31 Sq. ft.) shown in details in the map annexed herewith as ANNEXURE-A, including all other easementary rights appurtenant and belonging thereto, situated at Wani in Tahsil-Wani and District-Yavatmal and bounded as under: ON THE EAST -FACTORY OFFICE ON THE WEST - SADHANKAR WADI ON THE NORTH - YAVATMAL ROAD ON THE SOUTH - ROAD OF NAGAR PARISHAD (18 Mtr. Wide DP Road)" Also, Annexure-A of the aforesaid sale deed, dated 16.04.2015 dispels all doubts, and su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is prejudicial to the interests of the revenue. As the AO while passing the order under Sec. 143(3), dated 24.12.2018 had failed to make any inquiries or verification as regards the F.M.V of land in question on 01.04.1981 that was taken by the assessee at Rs. 36,65,327/-, therefore, the order so passed by him as per "Explanation 2(a)" of Sec. 263(1) of the Act is to be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue. We, thus, in terms of our aforesaid observations uphold the order passed by the Pr. CIT u/s.263 of the Act qua the aforesaid issue. 9. We shall now advert to the grievance of the assessee that the Pr. CIT had erred in setting aside the order passed by the Assessing Officer u/s. 143(3), dated 24.12.2018, for the reason that he had wrongly allowed the assessees's claim of deduction u/s.54G of the Act amounting to Rs. 16,73,11,080/-. 10. On a perusal of the record, we find that the assessee had during the year under consideration sold its factory land/plot at Wani to M/s. Shewalkar Developers Ltd., Nagpur vide a sale deed, dated 19.06.2015 for a sale consideration of Rs. 22,46,00,000/-. Claiming that it had shifted its industria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s towards purchase of another factory situated at Village Nilapur, Tehsil Wani, Dist. Yavatmal, therefore, it was not entitled for claim of deduction u/s. 54G of the Act. 12. In our considered view, before proceeding any further, it would be relevant to cull out Section 54G of the Act, which reads as under: "54G. (1) Subject to the provisions of sub-section (2), where the capital gain arises from the transfer of a capital asset, being machinery or plant or building or land or any rights in building or land used for the purposes of the business of an industrial undertaking situate in an urban area, effected in the course of, or in consequence of, the shifting of such industrial undertaking (hereafter in this section referred to as the original asset) to any area (other than an urban area) and the assessee has within a period of one year before or three years after the date on which the transfer took place,- (a) purchased new machinery or plant for the purposes of business of the industrial undertaking in the area to which the said undertaking is shifted ; (b) acquired building or land or constructed building for the purposes of his business in the said area ; (c) shifted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit ; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for all or any of the purposes aforesaid together with the amount, so deposited shall be deemed to be the cost of the new asset : Provided that if the amount deposited under this sub-section is not utilised wholly or partly for all or any of the purposes mentioned in clauses (a) to (d) of sub-section (1) within the period specified in that sub-section, then,- (i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires ; and (ii) the assessee shall be entitled to withdraw such amount in acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt or building or land or any rights in building or land, that was used for the purposes of the business of an industrial undertaking situated in an urban area, is effected in the course of, or in consequence of the shifting of such industrial undertaking to any area other than an urban area . In sum and substance, the availability of deduction u/s 54G of the Act, inter alia, pre-supposes shifting of an industrial undertaking from an urban area to any area other than an urban area. Now, in the case before us, we find that except for the fact that the assessee had during the year under consideration sold land admeasuring 29,228.79 Sq. Mtrs. situated at Tehsil Wani, District. Yavatmal, there is nothing discernible from the record that would reveal that there was in fact shifting of an industrial undertaking by the assessee from an urban area, i.e., Wani to a non-urban area, i.e., Village Nilapur, Tehsil: Wani, District: Yavatmal. However, the assessee except for harping on its claim that it had shifted its old industrial undertaking from an urban area to a non-urban area, had however, failed to place on record any such material which would irrefutably evidence the same. Although our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, i.e, Page 23 of a Notepad which referred to an unrecorded cash payment of Rs.11 lacs that was received by the assessee on sale of flat from the purchaser, viz. Shri Srikant Swaikar, and had summarily accepted the sale consideration of the said property at Rs.85 lacs, i.e, as was shown by the assessee in its return of income, therefore, the order passed by him was rendered as erroneous in so far as it was prejudicial to the interest of the revenue u/s.263 of the Act. 15. After having given a thoughtful consideration to the aforesaid issue, we find that it is a matter of fact borne from record that there is no whisper in the body of the assessment order about the aforesaid impounded document, i.e, Page 23 of the Notepad, much the less contents of the same, wherein there was a mention of cash payment of Rs.11 lacs by Shri. Srikant Swaikar (supra) to the assessee. On the basis of the aforesaid facts, we are of the considered view, that the summarily acceptance of the sale consideration of Rs.85 lacs as was shown by the assessee in its return of income, and not taking cognizance on the aforesaid impounded document which referred to a receipt of an amount of Rs. 11 lacs(supra) from ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
