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TMI Blog2023 (4) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... nd on the facts should have decided the issue on merits of the applicability of provisions of Section 56(2)(vii)(b) and 50C - from the records, no such investigation was carried out by the AO during the course of assessment proceedings, which, in our view, should have been done in the instant set of facts. AO did not call for the records regarding the transactions/transfer property between the assessee and his brother, and did not investigate into the nature of transaction, which should have been during the course of assessment. We observe that no documents regarding the transfer property were called for or submitted during the course of assessment proceedings. AO did not apply his mind on the applicability of provisions of Section 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO was erroneous as well as prejudicial to the interest of the revenue on the ground that such order was passed without making proper enquiries/verification of applicability of section 50C of the Act in respect of properties received as gift from brother and given as gift to brother. Therefore, the order passed by PCIT is required to be quashed and may kindly be quashed. 4. The learned Pr. CIT erred on facts as also in law in setting aside the assessment order dated 16.09.2019 passed u/s. 143(3) of the Income Tax Act, 1961 directing the AO pass a fresh assessment order. The order passed u/s 263 of the Act by the learned Pr. CIT is totally unjustified on facts as also in law therefore the same may kindly be quashed. 5. Your Hono ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. After taking the submissions of the assessee on record, Principal CIT set-aside the assessment order as being erroneous and prejudicial to the interests of the revenue, with the following observations: 6. I have gone through the records the submission made by the assessee during the proceedings. The assessee has submitted that the issue under consideration has been duly examined in the assessment proceedings by the AO therefore there was no omission on the part of the AO and it is the change of opinion in revisionary proceedings. The assessee has submitted that during the year he has received two immovable properties in gifts from his real brother through gift deeds. Therefore the provisions of section 56(2)(vii)(b) are not applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o properties from Shri Yogeshbhai V Barbhaya. Therefore the nature of transfer in view of the relevant provisions of IT act ought to have been examined by the AO. 7. The above facts will indicate that AO has not conducted by inquiries/verification in respect of issues mentioned above. It may be mentioned that two essentials condition for invoking the provisions of section 263 of I.T. Act are that the order passed by the AO is erroneous and prejudicial to the interest of revenue. 4. The assessee is in appeal before us against the aforesaid order by Principal CIT setting aside the assessment proceedings. The primary contention of the assessee is that the Principal CIT has incorrectly observed that this is a case of sale / purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order, AO observed that in the reply dated 13-09- 2019, the assessee has submitted clarification for each of the entries made in his capital account. Accordingly, the AO being satisfied with the reply/clarification filed by the assessee, accepted the returned income of the assessee and no additions or made in the assessment order. However, considering the facts involved in the present case, where there was transfer of property between the assessee and his brother, the AO should have done more investigation into the facts at the time of assessment on this issue/aspect, which, in our view is missing in the instant set of facts. The AO, in a view, should have examined the facts in detail and after due application of mind on the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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