Shri Niranjanbhai D. Patel, Ahmedabad V. The Pr. CIT, Ahmedabad, Ahmedabad

ITA 1451/AHD/2018

AI Insights

The case involves Shri Niranjanbhai D. Patel, who appealed against the order of the Pr.CIT-6, Ahmedabad, which exercised its revisionary powers under section 263 of the Income Tax Act, 1961. The Pr.CIT had set aside the original assessment order concerning the assessment year 2013-14, directing a fresh assessment on the grounds that the original assessment was erroneous and prejudicial to the interest of the revenue. The primary issue was whether the land sold by the assessee qualified as agricultural land under section 2(14) of the Act, thereby exempting the capital gains from tax under section 10(1). The Tribunal found that the Assessing Officer had not adequately investigated the nature of the land and the transactions involved, which included multiple co-owners and a real estate firm, M/s. Divyam Enterprise, facilitating the transactions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133611 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 24-01-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 31-05-2018
• Other Referred Cases: Smt. Minal Nayan Shah Vs. PCT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Business income; Revision of order; Opportunity of being heard; Difference of opinion; Assessment record; Change of opinion; Set aside; Capital Gains
• Section: 263; 143(3); 2(14); 142(1); 13

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठअहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठ ‘D’ अहमदाबाद। अहमदाबाद।अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER ITA No.1451/Ahd/2018 Assessment Year :2013-14 Shri Niranjanbhai D. Patel 5, Aradhana Society Opp: Purvadip School Joghewari Road, Amraiwadi Ahmedabad 380 026. PAN : AUMPP 4697 G The Pr.CIT-6 Ahmedabad. (Applicant) (Responent) Assessee by : Shri Jimit Shah, AR Revenue by : Shri Vijay Kumar Jaiswal, CIT-DR स ु नवाई क तार ख/Date of Hearing : 25/01/2023 घोषणा क तार ख /Date of Pronouncement: 17/04/2023 आदेश/O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER Present appeal has been filed by the assessee against order passed by the ld. Commissioner of Income Tax (Appeals)-6, Ahmedabad[hereinafter referred to as “Ld.CIT”] by exercising revisionary power under section 263 of the Income Tax Act, 1961 ("the Act" for short) dated 22.3.2018 pertaining to the Asst.Year 2013.14. 2. The grounds raised in the appeal are as under: ITA No.1451/Ahd/2018 2 “1. The learned Pr. C1T has erred in law under section 263 of the Income Tax Act while passing the order in the interest of revenue. The Id. Pr. CIT has set aside the assessment with the direction to the Id. AO to pass a fresh assessment order on the specific issues. 2. The learned Pr. CIT has set aside the assessment to the Id.AO for conducting a fresh assessment in respect to the land sold by the assessee. The Id. Pr. CIT has held that the Id.AO has not made proper inquiry whether the land is agricultural land as per section 2(14) of the IT Act 1961. Thus the Id. Pr. CIT has set aside the assessment with the direction to the Id.AO to pass a fresh assessment order. 3. The Id. Pr. CIT has erred in law and in considering the facts of the case and has not considered the submissions made by the assessee and thus has passed the order in a bias frame of mind. The Id. Pf. CIT has erred in law in holding that the assessment order passed by the Id.AO during the course of assessment proceedings is erroneous and prejudicial to the interest of the revenue. 3. The ld.counsel for the assessee argued against the order passed under section 263 of the Act on the ground that the issue on which the ld.Pr.CIT noted the assessment order to be erroneous was duly examined during assessment proceedings, the AO had taken a plausible view on the same, and the order passed by the Ld.PCIT only tantamounted to a change of opinion, which was not permissible in law in revisionary proceedings under section 263 of the Act. Documents and evidence in support of his contentions were filed before us, and referred to also. Reference was made to the decision of the ITAT Ahmedabad Bench in the case of Smt.MinalNayan Shah Vs. PCT, (2019) 111 taxmann.com 516 (Ahd- Trib) for the proposition that revisionary jurisdiction cannot be assumed for a mere change of opinion . 4. On the other hand, the ld.DR relied on the order of the Pr.CIT. 5. We have heard contentions of boththe parties, and gone through all the documents and case laws referred before us. ITA No.1451/Ahd/2018 3 6. The challenge before us is against the order passed by the Ld.PCIT u/s 263 of the Act in exercise of his revisionary jurisdiction finding the assessment order passed by the Assessing Officer in the case of the assessee u/s 143(3) of the Act for the impugned year, i.e A.Y 2013-14 erroneous causing prejudice to the Revenue. And, as transpires from the order of the Ld.PCIT, the issue relating to which the AO’s order was found to be in error causing prejudice to the Revenue relates to the AO’s acceptance of assessee’s claim of exemption of capital gain on sale of land, since AS PER THE LD.Pr.CIT the records before him did not support this view of the AO who he did not examine the issue by making proper inquiry and in the proper perspective. 7. To appreciate the controversy before us, it is pertinent to first take note of the facts relating to the issue on which revisionary jurisdiction was exercised by the ld.PCIT in the present case. 8. As per the show cause notice issued by the Ld.PCIT u/s 263 of the Act the assessment records revealed that the assessee had sold immoveable property jointly with seventeen persons for different considerations aggregating Rs.49,29,29,415/-,having himself received Rs.2,74,59,970/-. The cost of purchase of the land was Rs.70,32,691/- and the profit earned thereon accordingly of Rs.2,04,24,335/- was reflected in the Profit and Loss account of the assessee and capitalized to the capital account of the assessee. In the return of income filed, the assessee had claimed the capital gain earned of Rs.2,04,24,335/- as exempt u/s 10(1) of the Act , being agricultural income by way of sale of rural agricultural land ,which asset does not qualify as capital asset in terms of section 2(24) of the Act . ITA No.1451/Ahd/2018 4 The Ld.PCIT noted from the records before him that there were discrepancies in assesses claim of exemption of capital gain u/s 10(1) of the Act ,and that the facts on record revealed that the gain earned on sale of land was in the nature of business income. He noted that the AO had not inquired into nor examined the claim of the assessee in the proper perspective. 9. The discrepancies in the claim of exemption noted by the Ld.PCIT was: • The land stated to be purchased in A.Y 2011-12, was neither reflected in the financial details of the said year furnished in the return of income nor its opening balance reflected in the fixed assets account filed during assessment proceedings • As per the records the AO’s inquiry of the land being rural agricultural land ,for claim of exemption of capital gain u/s 10(1) of the Act, was inconclusive. Inquiry by the AO from Gandhinagar Urban Development Authority (GUDA) revealed that the land sold by the assessee was not located within the municipal limits of Gandhinagar. And the AO made no further inquiry with Kalol municipal Corporation regarding location of the land sold. 10. The facts on record noted by the Ld.PCIT as revealing that the transaction appeared to be more in the nature of adventure in the nature of trade was that: • The land was purchased by the assessee along with 17 co- owners in the year 2010 and sold in short period of time of two years, i.ein the impugned year i.e. 2012. • The entire sale consideration had been credited to the account of one M/s.Divyam Enterprise, which was a real-estate firm in which all the parties to the transaction of purchase and sale of ITA No.1451/Ahd/2018 5 asset, were partners, and also that the price for the purchase of land was also made by Divyam Enterprise. • The assessee had purchased more fixed assets in the impugned year also. 11. Considering the discrepancies and facts as above together ,the Ld.PCIT derived from the same that this transaction of purchase and sale of land was conducted through the assessee in his individual status in order to give a colour to the transaction of sale of rural agricultural land so as to avoid payment of tax and the AO having not inquired into the issue in this perspective despite the records revealing so, the assessment order passed was in error accepting assessee’s claim of exemption of the capital gains so earned u/s 10(1) of the Act. 12. The show cause notice of the ld.Pr.CIT pointing out the above is reproduced at para-3 of the order as under: “3. Later on, proceedings u/s.263 of the Act were initiated by issue of show-cause notice dated 14/02/2018, wherein the following issues were cited and discussed, and the Assessee was asked to show cause as to why proceedings u/s.263 of the Act should not be initiated in this case. The relevant portions of the show cause notice are reproduced as under:- "...a) The case records show that during the year under consideration, you had sold immovable properties jointly with seventeen others for different considerations aggregating to Rs.49,29,29,415/- as per the details below: Land location Sale consideration (In Rs.) Sate date Villagemulsana, Taluka distt. Gandhinagar 158650000/- 22/05/2012 Village mulsana, Taluka distt. Gandhinagar 86010000/- 23/05/2012 Village mulsana, Taluka distt. Gandhinagar 84700000/- 22/05/2012 ITA No.1451/Ahd/2018 6 You had received Rs.2,74,59,970/- as your share out of aggregate sale consideration of Rs.49,29,29,415/- and after deducting cost of purchase of Rs.70,32,691/-, you had credited Rs.2,04,24,335/-as profit on sale of agricultural land in the P & L account. This amount has been capitalized to your capital account. On verification of return of income along with computation of income filed for year under consideration, it is seen that you have claimed profit of Rs.2,04,24,335/- on sale of land as agricultural income and claimed exempt u/s. 10(I) of the IT Act. AO failed to the discrepancy that how the profit on sale of land can be treated as agricultural income & made no query on the issue. Further, you have claimed that the aforementioned lands were purchased in FY.2010-11 relevant to AY.2011-12, however, in the return of income of AY.2011- 12, the lands purchased by you have not been disclosed under the schedule "balance Sheet" or anywhere in the return of income so filed for AY.2011-12. Moreover, in the fixed asset account furnished during the assessment, no opening balance of land sold by you is found. The AO has not made any query on this issue. During the assessment it was submitted by you that the lands sold by you were agricultural lands &thus not a capital asset and therefore, the gain arising from sale of such lands is not chargeable to tax under the head capital gain. A copy of certificate of Talati of mulsana gram panchayat was also furnished by you. To ascertain the location of the lands, theAO made enquiry with Gandhinagar Urban Development Authority (GUDA), Gandhinagar Municipal Corporation and as per reply received from GUDA, the lands sold by the assessee do not fall within the territorial limits of GUDA or Gandhinagar Municipal Corporation. However, the AO made no enquiry with Kalol Municipal Corporation regarding location of the lands sold during the year. The AO did not examine the motive and purpose for buying & selling lands by you. If, the land was held by you and other co-owners of the land as stock-in-trade, the profit on sale of such lands though they Village mulsana, Taluka distt Gandhinagar 77100000/- 23/05/2012 Village mulsana, Taluka distt, Gandhinagar 34800000/- 22/05/2012 Village mulsana, Taluka distt. Gandhinagar 24500000/- 22/05/2012 Village mulsana, Taluka distt. Gandhinaqar 5000000/- 22/05/2012 Village mulsana, Taluka distt. Gandhinagar 4550000/- 23/05/2012 Village mulsana, Taluka distt. Gandhinagar 3950000/- 23/05/2012 Village mulsana, Taluka distt. Gandhinagar 1,36,69,41 5/- 04/03/2013 Rs.49,29,29,415/- ITA No.1451/Ahd/2018 7 are agricultural lands, shall be chargeable to tax under the head “Income from business and profession". It is important to see here that you are not an agriculturist. Lands sold by you was not your ancestral land on which you were doing farming or agricultural activity. On verification details provided by you, it is seen that these lands were purchased in 2010 by you and 17 other parties. Further, on verification of record, it is also seen that in the balance sheet as on 31.03.2013, land is lying in the fixed assets at the value of Rs.36,10,097/--. In the ROI of the assessee for AY.2012-13, fixed assets are shown at Rs.83329/- only & in the ROI of AY.2013-14, the same are shown at Rs.36,80,935/-. Such, increase in fixed asset have not been examined by the AO. Further, the frequency of land transactions by the assessee should also havebeen examined by the AO to ascertain the motive behind buying and selling lands. However, no such enquiry was made by the AO. b) Further, on examination of ledger copy of account M/s.Divyam enterprise in the books of your proprietor concern M/s. Shayona Engineering, it is seen whole of the sale consideration received by you have been debited to M/s.Divyam Enterprise. It is pertinent to mention here that M/s. Divyam Enterprise is a real estate firm in which you are a partner with other 17 co-sellers of the property. c) Further, your ledger copy of account in the books of account of M/s. Divyam Enterprise was also submitted during the assessment which is verified and it is seen that there appears an opening debit balance of Rs.94,34,226/- in your name as on 01.04.2012. It means that you were having a loan liability of Rs.94,34,226/-. However, no such liability was disclosed by you in your ROIs filed for AY. 2012- 13 or AY.2013-14. It is also seen that a payment of Rs.11,11,111/- was paid on 01.04.2012 by M/s. Divyam enterprise to vajirkhan Pathan from whom land was purchased by you. Thus, it appears that the debit amount of Rs.94,34,226/- is nothing but payments towards the purchases of above land by you made by M/s. Divyam Enterprise. d) Further, on verification of record & perusal of sale purchase deeds, it is seen that the lands were purchased & sold by a group of 18 persons not being blood relatives and thus the group is showing characteristics of an AOP and the transactions of land purchase & sales are adventure in nature and were done with the motive to earn profit only. It is again pertinent to mention that payments for purchase of lands have been made by M/s.Divyam Enterprise (A real estate firm) and also the receipts on sale of lands by you have been credited to M/s. Divyam Enterprise. This establishes that the transactions of sale/purchase of lands were executed with the intention to earn profit only. Your status being "Individual" has been used as a tool to give the color to property transaction (sale of agricultural land) just to avoid tax payments on profit earned on it. Therefore, the profit on sale of land should have been taxed as your income from business & profession in view of the discussion above....." ITA No.1451/Ahd/2018 8 13. During the revisionary proceedings before the ld.Pr.CIT the assessee failed to avail various opportunities of hearing afforded to him, which is noted in para-4 of the order, and thereafter, the ld.Pr.CIT held that in the light of the above facts noted by him , the transactions appeared more in the nature of adventure in the nature of trade, and therefore, the issue had surely not been examined by the AO in right perspective and claim of the assessee to exemption of the capital gains allowed by the AO in his assessment passed was clearly an error causing prejudice to the interest of the Revenue. His finding at para 5 to 9 of the order is as under: “5. From return of income of the assessee, it is seen that total income as per return of income is Rs.2,10,899/-. As per balance sheet, proprietor's capital on 31/03/2012 is Rs. 6,41,915/- and loan Rs. 1,21,100/-. No other funds are seen on liability side. On Assets side of balance sheet on 31/03/2012, gross fixed assets are Rs. 94,696/- which are depreciable, debtors, bank balance and loans & advances and other assets and total Rs. 7,62,915/-. Thus, there is no land seen with the assessee as per balance sheet as on 31/03/2012. As per deed of partnership furnished, it is an agreement dated 30/10/2010 amongst 20 persons and the name of the assessee appears at Sr. No. 19. Further, the deed is for doing real estate development business by persons at Sr. No. 1 to 12 in the name of Divyam Enterprise. It is nowhere mentioned why other 8 persons at Sr. 13 to 20, including the assessee are included except for sharing profit at 1%. No role of the assessee in the business emerges from the deed. Further, as per details of the property sold, the land is stated to be purchased on 19/11/2010 for assessee's share of Rs. 72,72,517/- and sold on 23/05/2012 for assessee's share of price of Rs. 2,74,59,968/-. However, no land is seen in the assets of the assessee in balance sheet as per the return of income for AY 2012-13 filed, any investment in land of identical amount is not shown. 6. It is also not discernible from the records that the assessee had adequate income as per returns of income available on record to explain the source of investment in the said land. 7. Further, the assessee claim that impugned land is agricultural land. But from records it is not seen that the AO has conducted any enquiry whether the land is agricultural land as per Section 2(14) clause (iii), sub-clause (a) & (b) of the I. T. Act, 1961. Section 2(14) clause (iii), sub-clause (a) & (b) of the I. T. Act, 1961 reads as under : "(iii) 5 agricultural land in India, not being land situate- ITA No.1451/Ahd/2018 9 (a) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the fast preceding census of which the relevant figures have been published before the first day of the previous year; or (b) in any area within such distance, not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a), as the Central Government may, having regard to the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this behalf by notification in the Official Gazette" 8. Hence, the Assessing Officer neither examined the facts regarding purchase of land and whether the land was purchased from funds available from disclosed sources nor whether the impugned land is agricultural land as per Section 2(14) clause (iii), sub-clause (a) & (b) of the I. T. Act, 1961, before the assessment was completed. 9. In view of the above, it is held that the assessee has nothing to explain. The A.O. has not examined the issues thoroughly nor he has conducted any enquiry in respect of the issues raised in the notice u/s.263 issued. Hence, the assessment was completed in a summary mannerwithout conducting necessary and proper enquiries as necessary on facts ofthe case. 10. In view of the above discussions, assessment order passed by the A.O.was made without making proper enquiry as necessary on facts of the case. Hence, it is held to be erroneous and prejudicial to the interest of revenue. The A.O. is directed to make all necessary enquiries/investigations and examine all the issues afresh after giving reasonable opportunity of being heard to the assessee and complete the assessment afresh, as per Income Tax Act, 1961. The order of the Assessing Officer u/s.143(3) dated 29/02/2016 is hereby set aside to the file of A.O. and to be framed denovo.” 14. We do not find any infirmity in the order of the ld.Pr.CIT that the assessment order passed by the AO in the present case u/s 143(3) of the Act was erroneous causing prejudice to the Revenue for having accepted the claim of the assessee to the capital gains of Rs.2,04,24,335/- being exempt from tax u/s 10(1) of the Act ,having been passedwithout making any inquiry and that too despite the facts on record revealing that the transaction of sale of land by the assessee during the year was not a pure simplicitor transaction of ITA No.1451/Ahd/2018 10 transfer of a rural agricultural asset by an individual but it was a more in the nature of adventure in trade . That the AO merely accepted the assesses claim of exemption without any inquiry is evident from the documents of assessment proceedings filed before us by the Ld.AR and referred to by him to substantiate his claim that the issue was examined by the AO during assessment proceedings. The said documents filed in a paper book before us reveal that the AO only raised preliminary queries regarding claim of capital gains. 15. PB-50 is the notice issued to the assessee during the assessment proceedings by the AO under section 142(1) of the Act for the impugned year dated 13.10.2015 asking the assessee to submit the details of investment made in movable and immovable properties and also details of sales and purchases of movable and immovable property at point no.7 & 8 as under: “7. Please submit the details of movable and immovable property held by you individually or jointly with other persons with details of purchase year and amount of purchase in below mentioned format. S.No. Property Type Address Share in property Year of purchase 8. Please submit details of sale/purchase of movable an immovable properties made by you or in joint with other persons during F.Y.2012-13 in below mentioned format. Also furnish documentary evidences (sale/purchase deed) relevant to such transactions along with source of the same and date of payments. S.No. Property Type Address Sale/purchase Date of transaction Amount PB-55, 151, 188 are all responses of the assessee on different dates to the query raised in this regard. PB-55 is the assessee’s ITA No.1451/Ahd/2018 11 reply to the AO dated 3.11.2015 giving details of immovable property held by him and also that sold by him in response to the query raised vide notice under section 142(1) of the Act at point no.7 & 8 as above, as under: S.No. Property Type Address Share in property Year of purchase 1. Agriculture land Mulsanqa, Kalol Taluka, Gandhinagar 1/18 th 2010 “7. Point No.7: Details of immovable property held by the assessee are as under: PB-151 is the assessee’s letter to the AO dated 25.1.2016 stating the land sold during year did not qualify as capital asset in terms of provisions of section 2(14) of the Act. Copy of the distance certificate obtained from Talati of the Village where the land was situated was furnished. Copy of the partnership deed of the Divyam Enterprise and copy of accounts of the assessee in the books of the firm was also furnished as under: ITA No.1451/Ahd/2018 12 ITA No.1451/Ahd/2018 13 On page no.188 is a letter of the assessee to the AO dated 26.2.2016 giving reasons for lower capital gains with respect to the sale consideration as the capital gain earned on land sold being exempt from tax as under: “With reference to the above and in continuation of previous submission made, we would like to submit the following: 1. Reason for Increase in Capital with compare to Previous year: As during the year under consideration, assessee has received a surplus of Rs.2,04,24,335/- from sale of agriculture land and the same has been is transferred to capital account of the assessee ITA No.1451/Ahd/2018 14 through Profit and Loss Account during the year under consideration.The copy of capital account is already submitted in our previous submission. And as a reason of the same there is increase in the Capital balance withe ompare to Previous year. 2. Reason for Lower Capital Gain w.r.t Sale Consideration: During the year under consideration a land sold at Mulsana is an agricultural land situated 8 Km away from the Nagar Palika.The distance certificate from the Talati regarding the has been given earlier. As a reason of the same the property is not a capital asset and so surplus is not liable for capital gain .So question of the low capital gain does not arrise.” Letter of Talati certifying the distance of the land from Gandhinagar Municipal Corporation and Kalol Nagar Palika was placed at PB-166. 16. The facts noted by the Ld.PCIT from the records before him are that the transaction of purchase and sale of property had been done within a short span of two years and involved 18 co-owners including the assessee, these facts being revealed from the copy of the sale and purchase deed of the land.That these 18 co-owners in turn were partners in a firm of 20 partners by the name of M/s.Divyam Enterprise formed for carrying on real estate business and the assesses name was 19 th in the list with his share in the profits being a meagre 1%.These facts being revealed from the copy of the partnership deed of M/s.Divyam Enterprise. That M/s.Divyam Enterprise had facilitated payment for purchase of the land and had also received back sale consideration,which facts were revealed from the copy of the ledger account of M/s.Divyam Enterprise in the books of the assessee. 17. Further the facts revealed no information furnished of the land purchased by the assessee in the assets of the assessee in balance sheet as per return of income for the year in which purchased, i.e A.Y 2012-13.Also the returns of income of the ITA No.1451/Ahd/2018 15 assessee did not disclose sufficient income for investment in the impugned asset. 18. All the above facts, we hold, rightly lead the ld.Pr.CIT to believe that the transaction was not simply transfer of capital assets, but was more in the nature of adventure in trade to facilitate the business of real estate carried out by the M/s.Divyam Enterprise, a partnership firm. The Ld.Counsel for the assessee was unable to dislodge this inference with any reasonable explanation for the facts noting M/s Divyam Enterprises involvement both in the purchase and sale of the asset either before the Ld.PCIT or even before us. Clearly, the AO during the assessment proceedings had not examined the issue from this angle, though, records clearlyrevealed all these facts. The documents and evidences, which were appreciated by the AO, and which have been pointed out by the ld.counsel before us, were only to the effect that the land was a rural land and did not qualify thus as capital asset as per section 2(14) of the Act, thus, there was no question of any capital gains earned thereon to be returned to tax; that accordingly, the claim of the assessee to exemption of capital gains earned thereon was in accordance withlaw. This is the only aspect from whichthe ld.AO had examined the issue, though the records before him revealed that there was more to the transaction than this, and it is probably a cover up for the business transaction of M/s.Divyam Enterprise. The assessment order clearly, we hold, was in error for not having examined the issue of claim of exemption of capital gains of the assessee in the above light, considering the facts on record before the AO. ITA No.1451/Ahd/2018 16 19. Moreover even on the aspect of the claim of the assessee to exemption of capital gains accepted by the AO, we find the Ld.PCIT has rightly held no proper inquiry being conducted by the AO . 20. The assessee claimed the land being situated in village Mulsana, District Kalol, Gandhinagar. Certificate of Talati of Mulsana Gram Panchayat, certifying the distance of village Mulsana from Gandhinagar Municipal Corporation and Kalolnagar Palika was filed. The Ld.PCIT has noted that the AO’s inquiry from Gandhinagar Urban Development Authority revealed that the land was not situated within the territorial limits of Gandhinagar municipality. Despite this information in his possession, no further inquiry was done by the AO with respect to the claim of the assessee of distance of land from Kalol. Thus virtually no inquiry was conducted by the AO for verifying the assesses claim of the land sold being rural land, situated beyond prescribed limits of municipality. Also, as rightly noted by the Ld.PCIT ,no inquiry was done by the AO as to whether any agricultural activity was conducted on the land prior to its saleso as to qualify as agricultural land as per law for being entitled to exemption u/s 10(1) of the Act. The details of inquiry conducted by the AO, brought to our notice, do not reveal any such inquiry conducted by the AO. 21. The assessment order passed, we hold, is clearly without any inquiry being conducted by the AO on the assesses claim of capital gain of Rs.2,04,24,335/- being exempt u/s 10(1) of the Act, that too despite the facts on record belying such claim and indicating the transaction to be colored . 22. The contention of the ld.counsel of the assessee that ld.Pr.CIT had only resorted to change in opinion, we hold, is not correct. It is not a mere change of opinion, but in fact it is a case where the view ITA No.1451/Ahd/2018 17 taken by the AO, was not fully supported by the facts on record, and in fact revealed that further inquiry on the facts would have lead to the view of the AO being palpably incorrect. Therefore, this contention of the ld.counsel of the assessee is rejected as totally untenable in law. The reliance placed accordingly on the decision in the case of Smt.Minal Nayan Shah (supra) therefore merits no consideration. 23. The ld.counsel for the assessee pointed out that in case of other co-owners, the claim of exemption of the capital gains has been accepted by the AO and no revisionary proceedings have been initiated. This contention of the ld.counsel for the assessee makes no difference to the facts of the present case as long as exercise of revisionary jurisdiction is justified in the present case, as held above by us. The fact that revisionary powers were not exercised in the case of other co-owners does not dilute the exercise of thepower in the present case. What is relevant to be seen is whether the revisionary powers have been rightly exercised in the facts of the case. 24. In view of the above, we see no reason to interfere in the order of the ld.Pr.CIT passed u/s 263 of the Act. The same is upheld and the appeal filed by the assessee is accordingly dismissed. 25. In the result, the appeal of the assessee is dismissed. Order pronounced in the Court on 17 th April, 2023 at Ahmedabad. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) JUDICIAL MEMBER (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad, dated 17/04/2023