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TMI Blog2025 (4) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of section 263 of the Income-Tax Act, 1961 even when the assessment order was passed after conducting necessary enquiries and after due application of mind and such order was neither erroneous nor prejudicial to the interests of the revenue. 2 That on the facts and in the circumstances of the case and in law, the Ld. Pr. CIT erred in setting- aside the order passed by the Assessing Officer by invoking the provisions of section 263 of the Income-Tax Act, 1961 and directing the Assessing Officer to frame the assessment de-novo after examining whether the agricultural land sold by the appellant was a capital asset as per the provisions of section 2(14)(iii) of the Act even when the said issue was duly examined by the Assessing Officer at the time of reassessment proceedings. 3 That on the facts and in the circumstances of the case and in law, the appellant purchased an agricultural land against sale of the land in question and thus, in any case, the appellant was eligible claim deduction under section 54B of the Act 4.The appellant reserves the right to add, alter and modify the grounds of appeal as taken by him" 3. For the purpose of recording the facts the appeal in IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidences or lack of inquiry on the part of the AO. This reply was not accepted by the Pr. CIT and finally set aside the order of the AO with direction to re-examine the issue and to make denovo assessment and passed an order as per law after making necessary verification, inquiry and investigation. Aggrieved by the impugned order the assessee has filed the present appeal. 4. Before the Tribunal Ld. AR of the assesse has submitted that the assessment was reopened by the AO on the basis of the information gathered during the investigation that the land sold by the assesse along with other co-owners are situated within 2 km from Tahsil & district, Harda and therefore, the assessment was re-opened only on this particular issue to assess the capital gain arising from the sale of land. He has further submitted that the AO has issued notice u/s 142(1) on 18.02.2022 along with questionnaire placed at page no.9 & 10 of the paper book whereby the AO has raised specific question about the land in question situated within the distance of 2 km from the Tahsil and District Harda and long term capital gain arising from the said transactions is liable to be taxed. The AO asked the assesse to fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence of an order of the AO cannot be treated as prejudicial to the interests of the revenue, for example, when an AO adopts one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the AO has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the AO is unsustainable in law. 4.2 He has contended that the Assessing Officer asked the assessee to furnish the supporting documentary evidences to substantiate the fact that the agricultural land sold by him was not a capital asset as per the provisions of section 2(14)(iii) of the Act as a consequence of which long-term capital gain arising on sale of such land was also not eligible to tax. Hence, it becomes crystal clear that the Assessing Officer raised detailed and extensive queries during the course of reassessment proceedings itself to examine the amount claimed as exempt by the assesse in his income-tax return for the Assessment Year 2014-15 on account of proceeds realized from sale of the said rural agricultural land. The assessee duly furnished the requisit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 2(1) Mumbai 188 ITD 38. Ld. AR has also relied upon following decisions: (i) Malabar Industrial Co. Ltd. v. CIT reported in [2000] 243 ITR 83 (SC) (ii) CIT (Central), Ludhiana v. Max India Ltd. reported in [2008] 166 Taxman 188 (SC) (iii) CIT v. Nirma Chemicals Works P. Ltd. 182 taxman 183 (Gujarat) (iv) CIT v. Sunbeam Auto Ltd. reported in [2011] 332 ITR 167 (Delhi) (v) DIT v. Jyoti Foundation reported in [2013] 357 ITR 388 (Delhi) 5. On the other hand, Ld. DR has submitted that the AO has not utter a word in the assessment order regarding the inquiry conducted on this issue but the assessment order is a nonspeaking order passed by the AO completely silent about the inquiry or examination and verification of any evidences on the issue. Thus, Ld. DR has submitted that it is a case of complete lack of inquiry on the part of the AO while passing the assessment order. It appears that the AO has accepted the submissions of the assesse without ascertaining relevant facts through proper inquiry whether the land in question is situated within distance on or outside the distance of Municipal limits as provided u/s 2(14)(iii) of the Act. The Pr. CIT has specifically pointe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... village Khedi, Mahmudabad, Tehsil & Dist. Harda to M/s Abhishek Green Valley Devi Ahilya Bai Ward, ward no. 26, opposite Singaji Bhawan, Harda on 17.09.2013 foi a consideration of Rs. 1,05,73,330/-, the market value of which is Rs. 1,05,73,330/-. 3.0 The land sold by Shri Brijmohan Parashar, Shri Premnarayan Parashar and Smt. Sharda Bai situated within two kilometers from Tehsil & Dist Harda as stated by ITO(Inv.), Bhopal in his report and therefore, liable to long term capital gains 4.0 On perusal of return filed by assessee Shri Premnarayan Parashar, it is noticed that he has shown income of Rs. 44,940/- and has claimed Rs. 1,06,09,170/- as exempt income. However Shri Premnarayan Parashar has received only his share @50% i.e. Rs. 53,04,585/- out of total sale consideration of Rs. 1,06,09,170/- as stated by ITO(Inv.), Bhopal, he has claimed exemption on whole consideration of Rs. 1,06,09,170/-. Therefore it is understood that he received full value of consideration of Rs. 1,06,09,170/. 5.0 Since land comprises within 2 km. distance from Tehsil & Dist Harda as stated by ITO(Inv.), Bhopal, the assessee is liable to pay long term capital gains on sale of property worth Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ohan Parashar) sold a land admeasuririg 5.91 acre situated at Khasra No. 104/1 and 104/9, Village/Moja - Khedi Mahmudabad, Tehsil & Distt. Harda (MP) for as sale consideration amounting.to Rs. 2,11,82,500/- on 17/09/2013. As per the registered deed, the assessee was the owner of land admeasuring 1.48 acre out of the total land admeasuring 5.91 acre. The assessee received sale consideration of Rs. 53,57,631/- for the sale of 1.48 acre land. The assessee in her ITR for the relevant year claimed exemption of the said amount of Rs. 53,57,631/-. The assessee claimed the aforesaid exemption on the basis of certificate of municipal corporation that the areal distance of the aforesaid land more than 3 Km from the outer border of the Harda. However, on verification through the google map, the areal distance of the Harda to Village Khedi Malhmudabad is less than 1 Km. In view of the facts mentioned above, it is clear that the amount of Rs.53,57,631/- claimed as exemption, was liable to be added to the total income of the assessee by completing scrutiny assessment proceedings. 4. During the course of assessment proceedings, you have neither furnished any details nor explained the issues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explained issue involved with relevant documentary evidences. It is pertinent to note that the AO has reopened the assessment on the very issue of exemption claimed by the assessee u/s 2(14)(iii) of the Act and thereafter issued a notice u/s 142(1) dated 18.02.2022 with the questionnaire as under: "ANNEXURE Please refer to the above. Your case has been reopened on the basis of ITO-(Inv.), Bhopal report dated 24.12.2019. On perusal of the report it was found that you have sold 2.95 acres Land situated at khasra no. 104/1, 104/9, village Khedi, Mahamudabad, Tehshil & Dist- Harda to M/s Abhishek Green Valley Davi Ahilya Bal Ward, Ward No. 26, opposite Singaji Bhawan, Harda on 17.09.2013 for consideration of Rs. 1,05,73,330/-. The such land comprised within. 2 K.M. distance from Tehshil & Districts Harda and you are liable to pay Long Term Capital Gain of Rs. 1,05,73,330/- but the long term capital gain has not been disclosed. Therefore, show-cause why the escaped income of LTCG of Rs. 1,05,73,330/- should not be added/assessed to your taxable income." 6.3 Thus, the AO has specifically raised a quarry about the distance of the land sold by the assesse from the municipal corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Copy of sale deed is attached as Annexure - 2. Copy of bank passbook is attached as Annexure - 3. Remaining details shall be filed in a week time. It is humbly requested to find the above details in order and oblige. Premnarayan 31, Somgaon Khurd, Harsud, Khandwa 450001 Date : 20.03.2022 Addl/Joint/Deputy/Asst. Commissioner of Income Tax, National Faceless Assessment Centre, Delhi Respected Sir, Subject :- Reply of notice u/s 143(2) dated 04.03.2022 ITBA/AST/F/143(2)_5/2021-22/1040337931(1) PAN :- CJZPP1164J Please refer to notice u/s 143(2) dated 04.03.2022 issued along with reasons for reopening of the case u/s 147 for the assessment year 2014-15. From the perusal of the reasons it reveals that the case has been reopened for the reason 'The information in this case has been received on 'Insight Portal' and is flagged as 'High Risk CRIU/VRU'. This information has been shared by Income Tax Officer (Inv.), Bhopal based on investigation carried on by him in the case of the assessee vide letter no. F. No. ITO(Inv. /Bpl/ S-10099124/2019-20/ dt. 24.12.2019. ITO(Inv.), Bhopal received certain information in case of Shri Ram Prasad Meena, PAN- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued along with reasons for reopening of the case u/s 147 for the assessment year 2014-15. From the perusal of the reasons it reveals that the case has been reopened for the reason 'The information in this case has been received on 'Insight Portal' and is flagged as 'High Risk CRIU/VRU'. This information has been shared by Income Tax Officer (Inv.), Bhopal based on investigation carried on by him in the case of the assessee vide letter no. F. No. ITO(Inv. /Bpl/ S-10099124/2019-20/ dt. 24.12.2019. ITO(Inv.), Bhopal received certain information in case of Shri Ram Prasad Meena, PAN- BTFPR1986R regarding 21 multiple DDs to purchase insurance policies. In this regard it is submitted that considering the above said reasons it is quite clear that whatever investigation made in my case is on or after 24.12.2019. Ir. para 3.0 of reasons it is mentioned that 'The land sold by Shri Brijmohan Parashar, Shri Premnarayan Parashar and Smt. Sharda Bai situated within two kilometers from Tehsil & Dist Harda as stated by ITO(Inv.), Bhopal in his report and therefore, liable to long term capital gains.' In this regard it is submitted that the aforesaid land sold on 17.09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e distance at which the land in question is situated has to be taken into consideration from the Municipal limits as exist at the time of sale and not at the time of passing assessment order or impugned order u/s 263 of the Act. Further Pr. CIT has proceeded on the basis of verification of distance from the Google map and observed that the aerial distance of the land in question from the municipal limits of the Harda is 1 (one) km. It is pertinent to note that after the delimitation of the Municipal limits in the year 2016 the distance has taken by the Pr. CIT at the time of issuing show cause notice on January 2024 may not have given correct facts about distance of the land from the Municipal limits as exist in the year 2013. We further note that once the assesse has produced certificate issued by the Municipal Corporation to substantiate his claim that the land in question is situated outside the limit as prescribed u/s 2(14)(iii) of the Act then while invoking provisions of section 263 the Pr. CIT ought to have brought some tangible material on record to show that the said certificate issued by Municipal Corporation has not given correct facts on this point. Merely on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the claim of the assesse. This course of action on the part of the commissioner is not permissible when the AO has conducted inquiry and has taken view based on the material on record and therefore, the only course available with the Pr. CIT u/s 263 was to give a conclusive finding that the view taken by the AO is not sustainable under the law. The Hon'ble Delhi High Court in case of CIT vs. Sunbeam Auto Ltd. (supra) while dealing an issue of lack of inquiry and inadequate inquiry has held in para 12 as under: "12. We have considered the rival submissions of the counsel on the other side and have gone through the records. The first issue that arises for our consideration is about the exercise of power by the Commissioner of Income-tax under section 263 of the Income-tax Act. As noted above, the submission of learned counsel for the revenue was that while passing the assessment order, the Assessing Officer did not consider this aspect specifically whether the expenditure in question was revenue or capital expenditure. This argument predicates on the assessment order which apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However ..... X X X X Extracts X X X X X X X X Extracts X X X X
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