Nitco Logistics Pvt. Limited, Jammu V. Principal Commissioner of Income Tax, Jammu & Kashmir

ITA 236/ASR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0718 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-05-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 19-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SH UMESH TAKYAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Principle of natural justice; Cost of acquisition; Fair market value; Valuation report; Assessment record; Onus to prove
• Section: 143(3); 50C; 148; 37; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.236(ASR)/2015 ASSESSMENT YEAR:2010-11 PAN:AAACN6345A M/S. NITCO LOGISTICS PVT. LIMITED VS. PRINCIPAL COM MISSIONER OF INCOME TALAB TILLO, JAMMU. TAX, JAMMU & KASHMIR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. JOGINDER SINGH, CA RESPONDENT BY: SH. SH. UMESH TAKYAR, DR DATE OF HEARING: 19/05/2016 DATE OF PRONOUNCEMENT: 31/05/2016 ORDER PER A.D. JAIN,JM: THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 2010-11, AGAINST THE ORDER DATED 27/31.03.2015, PASSED BY T HE LD. PRINCIPAL COMMISSIONER OF INCOME TAX, JAMMU. THE ASSESSEE H AS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD. PRI. CIT HAS ERRED IN LAW AND FACTS OF THE CASE IN PASSING ORDER U/S 263 OF THE INCOME TAX ACT AND GIV E DIRECTIONS TO THE A.O. FOR RE-FRAMING THE ASSESSMEN T AFRESH ON THE MATTER COVERED U/S 263. 2. THAT ORDER PASSED U/S 263 IS WHOLLY UNREASONABLE , UNCALLED FOR AND BAD IN LAW. 2.1. THAT THE MATTER REGARDING CAPITAL GAIN ON TRAN SFER OF LAND AND BUILDING AT 8/56, D.B. GUPTA ROAD, KAROL BAGH, NEW DELHI WAS CONSIDERED, DISCUSSED AND SCRUTINIZED BY THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143 (3) OF INCOME TAX ACT, FOR THE ASSESSMENT YEAR 2010-11. ITA NO.236(ASR)/2015 2 2.2. THAT ALL THE RELEVANT DOCUMENTS RELATING TO SA LE OF LAND AND BUILDING AND COMPUTATION OF CAPITAL GAIN THEREON WE RE FILED BEFORE THE A.O. DURING THE COURSE OF ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT. 3. THAT ORDER OF THE A.O. DOES NOT IN ANY WAY REPRE SENT ERRONEOUS ORDER AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2. THE FACTS OF THE CASE, AS GIVEN IN THE ORDER OF THE PRINCIPAL CIT, JAMMU ARE, AS FOLLOWS: IN THIS CASE, THE ASSESSMENT FOR THE ASSESSMENT YEAR 2010-11 WAS COMPLETED UNDER SECTION 143(3) OF THE I. E.ACT, 1961 BY THE JOINT COMMISSIONER OF INCOME TAX,RANGE-2,JAMMU VIDE ORDER PASSED ON 31-12-2012 AND INCOME WAS ASSESSED RS. 3,94,37,080/-. SUBSEQUENTLY, A PROPOSAL U/S 263 WAS RECEIVED FROM THE OFFICE OF JOINT COMMISSIONER OF INCOME FAX, RANGE-2, JAMMU VIDE HIS OFFICE LETTE R NO. 1063 DATED 31.03.2013 STATING THAT DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAD SOLD THE PROPERTY NO. 8/56 DESH BANDHU GUPTA ROAD, KAROL BAGH, NEW DELHI TO M/S SUJATA HOTELS PVT. LTD. PATNA FOR'A CONSIDERATION OF RS.5.50 CROR ES THROUGH A SPECIAL POWER OF ATTORNEY EXECUTED ON 26- 03-2010 AND ASSESSEE HAS DECLARED CAPITAL LOSS OF RS. 64,99,920/- IN ITS RETURN OF INCOME. IT WAS STATED BY HIM THAT THE PROPERTY SOLD WAS A PLOT MEASURING 1470 SQ. YARDS IN THE COMMERCIAL BELL OF KAROL BAGH, DELHI NEAR AJMAL KHAN ROAD AND THE PLOT WAS THREE SIDE OPEN AND SITUATED AT MAIN DESH BANDHU GUPTA ROAD, KAROL BAGH DELHI, LIE FURTHER STATED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2009-10 IT WAS FOUND THAT THE SAID PROPERLY W:R GIVEN AS A COLLATERAL SECURITY AGAINST THE LOAN RAISED BY THE ASSESSEE COMPANY. FURTHER, AS PER THE VALUATION REPORT FROM THE CANARA BANK SHALAMAR ROAD, JAMMU PROPERTY IN QUESTION WAS VALUED AT RS. 10,06,27,498/- AS ON 18-12-2004 BY THE REGISTERED VALUER MR. Q. 1.. DUA. THE VALUATION REPORT DATED 18-12-2004 SHOWED THAT THE ACTUAL AREA OF THE PLOT IS 1470.04 SQ. YARD. THIS MEANS THE VALUE OF THIS PROPERTY IN 2004-05 WAS 10,06,27,500/-, IF THE ITA NO.236(ASR)/2015 3 VALUE OF THIS PROPERTY IS CALCULATED AS PER INDEX, THE COST AVAILABLE FOR CAPITAL GAIN DURING FOR ASSESSME NT YEAR 2010-1 1 WOULD COME TO RS. 14,90,54,484/- THEREBY MEANING THAT THE COST OF THIS PROPERTY WAS NOT LESS THAN RS, 14,90,54,484/- IN THE YEAR 2010- 11. THUS, HE STATED THAT THE PROPERTY LOCATED IN THE PRIME COMMERCIAL AREA OF THE NATIONAL CAPITAL HAS BEEN SOLD BY THE ASSESSCE TO A COMPANY AT THE RIDICULOUSLY LOW PRICE THAN ITS ACTUAL VALUE, FURTH ER, DURING THE COURSE OF INVESTIGATION AT THE TIME OF ASSESSMENT FOR THE ASSESSMENT YEAR 2009-10 HAD REVEALED THAT THE PURCHASER M/S SUJATA HOTEL PVT. LTD. IS NONE ELSE BUT A COMPANY OWNED BY SOME SHARE HOLDERS AND DIRECTORS OF THE ASSESSEC COMPANY. THEREFORE, THE MOTIVE OF UNDER VALUATION OF THE ABOVE PROPERTY IS ALSO ABUNDANTLY CLEAR. THUS, IF THE VALUE OF THE PROPERTY IS ADOPTED AT RS.15 CRORES AS WORKED OUT ABOVE, IT IS CLEAR THAT THE ASSESSEC HAS WORKED OUT THE CAPITAL LOSS WRONGLY. THE INDEXED COST OF ACQUISITION AS SHOWN BY THE ASSESSEE IF ACCEPTED, THE CAPITAL GAIN WOULD WORK OUT TO RS.8.85 CRORES WHEREAS, THE ASSESSEE HAD SHOWN THE CAPITAL LOSS OF RS.64,99,920/-. THIS SHOWS THAT THERE IS UNDER ASSESSMENT OF INCOME TO THE EXTENT OF RS. 9.50 CRORES. IN VIEW OF THE FACTS MENTIONED ABOVE, IT WAS SEEN THAT THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER U/S 143(3) OF THE IFF. ACT, 1961, FOR A.Y. 2010- 11 VID E ORDER DATED ON 31-12-2012, REFERRED TO ABOVE, WAS ERRONEO US AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDINGLY, A SHOW CAUSE NOTICE VIDE NO. 2606 DATE D 06.08.2013 WAS SENT TO THE ASSESSEC WITH A REQUEST TO EXPLAIN AS TO WHY THE ABOVE REFERRED ASSESSMENT MAY NOT BE CANCELLED DIRECTING A FRESH ASSESSMENT TO BE MAD E IN HIS CASE IN TERMS OF THE PROVISIONS OF SECTION 263 OF THE L.T. ACT, 1961 AND CASE WAS FIXED FOR HEARING ON 14.08.2013. THE CONTENTS OF THE SHOW CAUSE NOTICE A RE REPRODUCED HEREUNDER:- 'PLEASE REFER TO THE ORDER UNDER SECTION 143(3) OF THE INCOME TAX ACT, FOR THE ASSESSMENT YEAR 2010-11 DATED 31-12-2012 PA SSED BY THE JT. COMMISSIONER OF INCOME TAX, RANGE-2, JAMMU. ITA NO.236(ASR)/2015 4 A PROPOSAL UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 HAS BEEN RECEIVED FROM THE JT. C-OMMISSIONER OF LNCOME TAX, RANGE-2, JAMMU VIDE HIS OFFICE LETTER NO. 1003 DATED 31-03-2013. ON GOING THROUGH THE PROPOSAL AND THE ACCOMPANYING RECORDS, IT IS OBSERVED THAT DURING THE ASSESSMENT YEAR UNDER CONS IDERATION, YOU HAVE SOLD THE PROPERTY NO. 8/56 DESH BARNDHU. GUPTA ROAD, KAROL BAGH, NEW DELHI TO M/S SUJATA HOTELS P. LTD. PATNA FOR A CONSIDERATION OF RS. 5.50 CRORES THROUGH A SPECIAL POWER OF ATTORNEY EXECUTED ON 20-03-2010 AND YOU HAVE DECLAR ED A FROM CAPITAL LOSS OF RS.64,99,920/- IN THE RETURN OF INC OME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR ASS ESSMENT YEAR 2007-10 IT WAS FOUND THAT THE PROPERTY WAS GIVEN AS A COLLATERAL SECURITY AGAINST THE LOAN RAISED BY YOUR COMPANY. F URTHER, AS PER THE VALUATION REPORT RECEIVED FROM THE CANARA BANK, SHALAMAR ROAD, JAMMU PROPERTY IN QUESTION WAS VALUED AT RS . 10,06,27,498/- AS ON 2-12-2024 BY THE REGISTERED VALUER MR. 6 /.L. DUA. THIS VALUATION REPORT DATED 18. 12.2 004 SHOWS THAT THE ACTUAL AREA OF THE PLOT IS 1/J-0.OF SQ .YARD INSTEAD OF 1/50 SQ. YARDS SHOWN BY YOUR COMPANY. THE REGISTERED VALUER SH. Q. L.DUA, THE REGISTERED VALUER, HAS ELUCIDATED THE VALUE OF THE SAID PROPER TY AS ON 18-12- 200/ AT RS .10,06, 27458/-. THEREFORE THE VALUE OF PROPERTY AS ON 21&.23.2212 SHOULD BE MORE .IT IS WORTHWHILE TO MEN TION THAT THE REGD. VALUER SH. Q L.DUA IN HIS REPORT AT PAGE 3 AGAINST COLUMN 32 HAS ELUCIDATED THE VALUE OF LAND AT RS. 9,92,10, 275/- AS ON 12 - 12-2004 ON THE FOLLOWING GROUNDS:- D.D.A FIXED THE MINIMUM, RESERVE PRICE FOR AUCTION OF COMMERCIAL PLOT 630 SQ.MT AT 8,17-,00,000/- ( I.E RS. 1,29,683/- SQM) I N NEARBY AREA OF COMMUNITY CENTRE MOTIA KHAN , NEW DELHI ON DESH BANDHU GUPTA ROAD PAHARGANJ VIDE THEIR ADVT. DATED 15-07-2 004 AND 13- 10-204 IN HINDUSTAN TIMES, NEW DELHI. AS PER ASSESS OR AND COLLECTOR ( MCD) ORDERS NO. A C( PC) / HQ / 85/513-623 DATED 16 - 05 -19 85 , A C( PC) /H&/88/11/64/24023 DATED 25-03- 1988, A C( PC) /HQ-691/11/65/1428 DATED 31-01-179 1. AND RAJYA SABHA UNSTARRED QUESTION 491 DATED 20.02.1988 , THE LAND RATE BEYOND 500 SQM. CAN BE REDUCED BY 15 % ( I.E 85 FO OF 12683/- = RS . 1,10,231/SQM.) .AND FURTHER ONE THIRD DEDUCTION IN COST HAS BEEN MADE FOR ANY ADVERSE / UNTOWARD VARIATION IN T HE MARKETABILITY OF PROPERTIES IN FUTURE ( THOUGH CHAN CES ARE REMOTE/UNLIKELY). THUS THE TOTAL LAND COST (AREA 12 29.141 SQM.) = (500 X RS. 1 , 29,083 + 729. 141 X1, 10,231 )X ( 2 / 3 )= RS. 7,72,10,295/-. ITA NO.236(ASR)/2015 5 KEEPING IN VIEW THE STEEP HIKE IN THE COST OF LAND THE VALUE OF COMMERCIAL LAND AT SUCH A POSH LOCALITY MUST HAVE I NCREASED THREE TO FOUR FOLD. THE METHOD OF VALUATION OF LAND BY SH. Q.L. DUA , THE REGISTERED VALUER IS VERY REASONABLE F AIR. THEREFORE, THE FAIR VALUE OF THE PROPERTY AS ON DATE OF TRANSFER IS TAKE N AS INDEXED VALUE OF PROPERTY WHICH WILL BE ON THE LOWER SIDE, AS ON DATE OF TRANSFER . THE SAME IS CALCULATED ON THE BASIS OF VALUATION DATED 18-12-2004 MAD BY SH. Q L. DUA, REGISTERED VALUER, BUT AFTER DISALLOWING T HE 1/3 RD DEDUCTION IN COST HAS BEEN MADE FOR ANY ADVERSE / UNTOWARD VALUATION I N THE MARKETABILITY OF PROPERTIES IN FUTURE WHICH IS CALCULATED AS UNDER:- TOTAL COST OF LAND AS PER VALUER : RS.9,92,10,295/- DLSALLOWED:-I /3 RD OF THE COST FOR ANY ADVERSE : - RS 14 , 88 ,15, 442 /- / UNTOWARD VARIATION IN THE MARKETABILITY OF PROPERTIES AS ALLOWED BY THE VALUER THIS MEANS THE VALUE OF THIS PROPERTY OWNED BY THE COMPANY IN 2004-05 WAS RS.1 4 , 88 , 15 , 442 /- THE COST CALCULATED AS PER INDEX FOR CAPITAL GAIN THE VALUE FOR RS.22,04,32,874/- WILL COME TO RS. 22 , 04 , 32 , 8 7 4 /-. FROM ABOVE, IT IS CLEAR THAT THE PROPERTY WHICH WAS VALUED MUCH-MUCH MORE BEING LOCA TED IN THE PRIME COMMERCIAL AREA OF THE NATIONAL CAPITAL HAS B EEN SOLD BY YOUR COMPANY TO ANOTHER COMPANY AT THE REDUCED PRICE. FURTHER, WHILE GOING THROUGH THE ASSESSMENT RECORDS FOR THE ASSESSMENT YEAR 200 9-10. IT IS FOUND THAT THE PURCHASER M/S. SUJATA HOTEL PVT. LTD. IS NONE ELSE BUT A COMPANY OWNED BY SOME SHARE HOLDERS AND DIRECTOR OF THE ASSESSEE COMPANY. THEREFORE, FOR CALCULATING THE LOSS OF REVENUE AT THE PRESENT STAGE THE VALUE OF THE THIS PROPERTY IS RS . 22.04 CRORE IN PLACE OF RS. 5.50 CRORE AS DECLARED BY THE YOUR COMPANY. THE CAPITAL GAIN IS TO BE CALCULATED TAKING THIS VALUE AT RS . 22.04 CRORE, INSTEAD, YOUR COMPANY HAS ITSELF SHOWN THE INDEXED VALUE OF THIS PROPERTY AT R S .6,14,99,920/-. AS PER THE PROVISIONS OF SECTION 50C OF THE INCOME TAN ACT, 1961, WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A R ESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING L AND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN T HIS SECTION REFERRED TO AS THE 'STAMP VALUATION AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE SHALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. ITA NO.236(ASR)/2015 6 2. WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECTION (L), WHERE A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICE R THAT THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALU ATION AUTHORITY UNDER SUB-SECTION (L) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; B) THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (L) HAS NOT B EEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BE FORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING O FFICER MAY REFER THE VALUATION OF THE CAPITAL ASSET TO A VALUATION OFFIC ER AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISIONS OF SUB SECTIONS ( 2 ), ( 3 ), (4), (5) AND (6) OF SECTION 16A, CLAUSE (I OF SUB-SECTION ( 1 ) AND SUB-SECTIONS (6) AND (7) OF SECTION 23A, SUB-SECTION (5) OF SECTION 24, SECTION 34 AA, SECTI ON 35 AND SECTION 37 OF THE WEALTH-TAX ACT, 1957, SHALL, WITH NECESSARY MODI- FLCATIONS, APPLY IN RELATION TO SUCH REFERENCE AS T HEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESSING OFFICER UNDER SUB -SECTION ( 1 ) OF SECTION 16A OF THAT ACT. EXPLANATION L.FOR THE PURPOSES OF THIS SECTION, 'V ALUATION OFFICER' SHALL HAVE THE SAME MEANING AS IN CLAUSE (R) OF SEC TION 2 OF THE WEALTH- TAX ACT, 1957 . EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION, TH E EXPRESSION 'ASSESSABLE' MEANS THE PRICE WHICH THE STAMP VALUAT ION AUTHORITY WOULD HAVE, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONT AINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTED OR ASSESSED, I F IT WERE REFERRED TO SUCH AUTHORITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY. (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB-SEC TION ( 2 ), WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION ( 2 ) EXCEEDS THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHO RITY REFERRED TO IN SUB-SECTION ( 1 ), THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE B Y SUCH AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF THE C ONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER. SINCE YOU COMPANY HAS NOT ADOPTED THE VALUE OR ASSE SSED OR ASSESSABLE BY AUTHORITY OF A STATE GOVERNMENT FOR T HE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF THE SAID TRANSF ER, THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE SHOULD HAVE BEEN FOR THE PURPOSES OF SECTION 48 , DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER, ITA NO.236(ASR)/2015 7 EVEN IF, THE INDEXED COST OF ACQUISITION SHOWN BY YOUR COMPANY I S ACCEPTED AS SUCH THE CAPITAL GAIN WILL COME TO RS. 15.90 CRORES . AGAINST THIS CAPITAL GAIN YOU HAVE SHOWN THE CAPIT AL LOSS OF RS.64,99,920/-ONLY . THIS MEANS UNDERSTATEMENT OF I NCOME ON THIS ACCOUNT OF RS.16.55 CRORES HAS BEEN RESULTED. FURTHER IT IS SEEN THAT THAT YOW. HAD PURCHASED THE SAID PLOT FOR RS. 1,12,500/- ON 22-02-1975, AND N CONSTRUCTION WAS RAISED ON THE SAID PLOT AT THE REGD. VALUERS I.E. SH. MANJIT SINGH SAGOO AND SH. Q.L. DUA AS ON 01.04.1981 AND 18.12.2004 AT RS. 9,28,500/- AND RS.14,17,163/- RESPECTIVELY. IT MEANS THAT YOU RSELF RAISED THE CONSTRUCTION ON THE SAID PLOT. ON PERUSAL OF THE B ALANCE SHEET IT IS SEEN THAT YOU HAVE REDUCED ONLY RS.1,12,500/- ON AC COUNT OF SALE OF LAND ACCOUNT OF FIXED ASSETS. THE AMOUNT SPENT O N CONSTRUCTION HAS NOT BEEN REDUCED FROM THE BLOCK ASSETS IN THE B ALANCE SHEET. THE CONSTRUCTION HAS BEEN VALUED AT RS.9,28,500/- A S ON 01.04.1981 BY THE REGD. VALUER SH. MANJIT SINGH S AGOO. THE AMOUNT TO THE EXTENT OF RS.9,28,500/- SHOULD HAVE B EEN REDUCED FROM THE BALANCE SHEET UNDER THE LAND HEAD OF FIXED ASSETS. THUS, THERE IS DIFFERENCE OF RS.9,28,500/- IN THE BALANCE SHEET. KEEPING IN VIEW THE ABOVE, IT APPEARS THAT THE ASS ESSMENT FRAMED BY THE JCIT, RANGE-2, JAMMU IN YOUR CASE REF ERRED TO ABOVE IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST S OF REVENUE AND ACCORDINGLY, YOU ARE REQUESTED TO SHOW CAUSE AS TO WHY THE PROVISIONS OF SECTION 263 MAY NOT BE INVOKED IN YOU R CASE AND THE ASSESSMENT ORDER UNDER CONSIDERATION BE ENHANCED OR MODIFIED OR CANCELLED DIRECTING A FRESH ASSESSMENT. 2. IN RESPONSE TO SAID SHOW CAUSE NOTICE A LETTER FROM THE ASSESSEE WAS RECEIVED REQUESTING THEREIN TO ALLOW ADJOURNMENT AND ACCORDINGLY THE CASE WAS FIXED FOR HEARING ON 04.09.2013. ON THE SAID DATE OF HEARING, THE COUNSEL OF THE ASSESSEE ATTENDED THE PROCEEDINGS AN D FILED WRITTEN REPLY STATING THEREIN AS UNDER:- THE ASSESSEE COMPANY CARRIES ON THE BUSINESS OF TR ANSPORTATION OF GOODS AND HEAD OFFICE IS AT JAMMU AND BRANCH OFFICE AT MORE THAN 85 PLACES THROUGHOUT THE COUNTRY. THE GROSS TURNOVE R AMOUNTED TO RS.141.10 CRORES. THE ASSESSEE FILED THE RETURNED I NCOME OF RS.3.49 CRORES. THAT ASSESSEE WAS OWNER AS LESSEE OF PLOT OF LAND AT 8/56, DB GUPTA ROAD KAROL BAGH, NEW DELHI WHICH IS AS PER THE ORIGINAL ITA NO.236(ASR)/2015 8 DEED DATED 3/06/1941 CAN ONLY BE USED FOR RESIDENTI AL PURPOSES. ASSESSEE HAD ALSO CONSTRUCTED A GODOWN ON THE SAID PLOT OF LAND. THAT THE SAID LEASEHOLD LAND WAS ORIGINALLY ALLOTT ED BY DELHI IMPROVEMENT TRUST VIDE LEASE DEED DATED 3/6/1941 FO R A PERIOD OF 90 YEARS. THUS, THE LEASE WAS TO TERMINATE ON 3/6/2 031. COPY OF SAID LEASE DEED IS ENCLOSED. THAT IT IS PERTINENT TO MENTION THAT AS PER CLAUSE 1(VI0 OF THE ORIGINAL LEASE DEED DATED 3.06.1941 THE LAND IN QUE STION WAS A RESIDENTIAL LAND. THE CLAUSE READS AS UNDER: VI) NOT TO USE THE SAID LAND AND BUILDINGS THAT MA Y BE ERECTED THEREON DURING THE SAID TERM FOR ANY OTHER PURPOSE THAN FOR THE PURPOSE OF RESIDENTIAL BUNGALOW WITHOUT THE CONSENT IN WRITING OF THE SAID LESSOR; PROVIDED THAT THE LEASE SHALL BECOME V OID IF THE LAND IS USED FOR ANY PURPOSE OTHER THAN THAT FOR WHICH THE LEASE IS GRANTED NOT BEING A PURPOSE SUBSEQUENTLY APPROVED BY THE LE SSOR. THIS SHOWS THAT THE BUSINESS CONDUCTED BY THE ASSE SSEE AT THE SAID LEASEHOLD LAND WAS NOT IN CONSONANCE WITH THE TERMS OF THE LEASE DEED. THAT THE ASSESSEE COMPANY HAD PURCHASED THE SAID P LOT OF LAND ON 22.02.1975 FOR RS.1,12,500/- VIDE EIGHT STA TE DEEDS AS PER DETAILS GIVEN BELOW: DATE NAME OF SELLER AMOUNT 22/02/1975 SH. UMA DEVI/MASTER SUSHIL KUMAR 42,07 5/- 22/02/1975 SMT. UMA DEVI/MS. SANTOSH KUMARI 4,725 /- 22/02/1975 SH. PREM KUMAR 42,075/- 22/02/1975 SMT. UMA DEVI/ANIL KUMAR 4,725/- 22/02/1975 SMT. UMA DEVI/ASHWANI KUMAR 4,725/- 22/02/1975 SMT. UMA DEVI 4,725/- 22/02/1975 SMT. UMA DEVI/MR. INDER KUMAR 4,725/ - 22/02/1975 SMT. RITA RANI 4,725/- COPIES OF SALE DEEDS ARE ENCLOSED. THAT ASSESSEE COMPANY VIDE BOARD RESOLUTION DATED 30 TH APRIL AND IST MAY, 2005 RESOLVED TO SELL THE LEASEHOLD RI GHTS ON THE SAID LAND ON ACCOUNT OF THE FACT THAT DUE TO BUSINESS EX PANSION AND NO ENTRY RESTRICTIONS FOR HEAVY VEHICLES IMPOSED BY G OVERNMENT, THE WORKING IN THE PREMISES HAD BECOME DIFFICULT. COPY OF BOARD RESOLUTION ENCLOSED. ITA NO.236(ASR)/2015 9 IT IS IMPORTANT TO MENTION HERE THAT IN THE YEAR ME NTIONED ABOVE, THE DELHI GOVERNMENT HAD STARTED COMPAIGN TO DEMOLISH THE RESIDENTIAL PROPERTIES WHICH ARE BEING USED FOR COMMERCIAL PURP OSES. THERE WAS ALSO A FEAT OF LEASE DEED OF THE ASSESSEE COMPANY BE CANCELLED ON ACCOUNT OF USE OF SAID LEASEHOLD LAND IN VIOLATION OF PURPOSE MENTIONED IN THE ORIGINAL LEASE DEED. KEEPING ALL T HESE FACTORS IN MIND, THE ASSESSEE COMPANY HAD DECIDED TO SELL THE SAID LEASEHOLD FACTORS IN MIND, THE ASSESSEE COMPANY HAD DECIDED T O SELL THE SAID LEASEHOLD LAND. THAT IN TERMS OF SAID RESOLUTION, THE COMPANY SOLD THE SAID LEASEHOLD RIGHTS TO SUJATA HOTELS PVT. LTD; PATNA F OR CONSIDERATION OF RS.5.50 CRORES. THAT THE BUYER MADE THE PAYMENT OF SALE CONSIDERAT ION AS PER FOLLOWING DETAILS: DATE AMOUNT (RS.) 24/11/2005 11,00,000 19/12/2005 10,00,000 19/12/2005 20,00,000 11/01/2006 39,00,000 04/04/2006 1,50,00,000 31/05/2006 70,00,000 31/07/2006 15,00,000 31/09/2006 10,00,000 31/10/2006 65,00,000 31/01/2007 10,00,000 23/02/2007 30,00,000 17/03/2007 10,00,000 31/03/2007 1,00,00,000 TOTAL: 5,50,00,000 THAT THE ABOVE SAID LAND WAS MORTGAGED WITH CANARA BANK, SHALIMAR ROAD, JAMMU AGAINST VARIOUS CREDIT LIMITS OF COMPANY. THEREFORE, AGREEMENT WAS NOT EXECUTED WITH THE BUYE R AND NO POSSESSION WAS GIVEN IN THE FINANCIAL YEAR 2005-06, WHEN THE SALE WAS AGREED UPON. THAT THE SAID PROPERTY WAS RELEASED BY THE CANARA B ANK IN THE FINANCIAL YEAR 2009-10 RELEVANT TO ASSESSMENT YEAR 2010-11. THE POSSESSION WAS GIVEN ON 15.07.2009. THE ASSESSEE CO MPANY FURNISHED COPIES OF PURCHASE DEEDS, AGREEMENTS TO S ELL, VALUATION REPORT OF VALUE AS ON 1.4.1981 WORKING OF CAPITAL G AINS AND OTHER DOCUMENTS VIDE ITS REPLY DATED 30.10.2012. COPIES E NCLOSED FOR YOUR INFORMATION AND CONSIDERATION PLEASE. ITA NO.236(ASR)/2015 10 THAT IN THE INCOME TAX ACT, THERE WAS A PROVISION V IZ SECTION 52. THAT SECTION ENABLED THAT ASSESSING OFFICER TO IGNO RE THE ALE PRICE AND ADOPT MARKET VALUE FOR PURPOSE OF COMPUTING CAP ITAL GAINS. WHILE INTERPRETING THE SAID PROVISIONS THE JUDICIAL VIEW WAS THAT THERE SHOULD BE SOME UNDER CONSIDERATION AND THAT T HE CONSIDERATION OVER AND ABOVE WHAT HAS BEEN SHOWN IN THE DOCUMENT HAS BEEN RECEIVED. IT WAS ALSO HELD THAT WHERE THER E IS NO EVIDENCE THAT MORE CONSIDERATION HAS PASSED PROVISIONS WERE NOT APPLICABLE. THOUGH THE SAID SECTION HAS BEEN OMITTED BUT THE P RINCIPLE REMAINS THE SAME. IN K.P.VERGHESE VS. INCOME TAX OFFICER, 131 ITR 597 , THE HONBLE SUPREME COURT HAD THE OCCASION TO DEAL WITH REGARD TO UNDERSTATEMENT OF SALE CONSIDERATION. THE HONBLE C OURT HELD THAT IT IS NOT ENOUGH TO ATTRACT PROVISIONS OF SUB-SECTION (2) OF SECTION 52, THAT THE FAIR MARKET VALUE EXCEEDS THE VALUE OF CON SIDERATION RECEIVED BUT IT IS FURTHER MORE NECESSARY THAT THER E FULL VALUE OF THE CONSIDERATION IS UNDERSTATED OR IN OTHER WORDS SHOW N AT LESSER FIGURE THAN THAT ACTUALLY RECEIVED BY THE ASSESSEE. SIMILAR VIEWS HAS BEEN HELD BY THE HONBLE SUPREME COURT IN COMMISSIONER OF INCOME TAX VS. SHIVAKAMI CO. (P) L TD. 159 ITR 71. SERIES OF JUDGMENTS IS THAT THE SALE CONSIDERATION DECLARED BY THE ASSESSEE HAS TO BE ACCEPTED BY THE REVENUE AS TRUE UNLESS IT IS PROVED TO BE WRONGLY DECLARED. IT IS FURTHER HELD T HAT THE BURDEN OF PROOF IS UPON THE REVENUE TO ESTABLISH THAT THE ASS ESSEE HAS UNDERSTATED THE SALE CONSIDERATION AND THAT THE AS SESSEE HAS RECEIVED OVER AND ABOVE THE CONSIDERATION SHOWN IN THE DOCUMENTS. SECTION 48 CONTEMPLATES FULL VALUE OF CONSIDERATI ON WHICH IS FULL SALE PRICE ACTUALLY PAID. IT DOES NOT REFER TO THE ADEQUACY OF THE PRICE NOR THE MARKET VALUE OF THE SUBJECT MATTER OF THE S ALE. IN COMMISSIONER OF INCOME TAX VS. GILANDERS ARBUTHN OT & CO. 87 ITR 407, HONBLE SUPREME COURT HELD THAT FOR PURPOS ES OF CAPITAL GAINS, SALE CONSIDERATION HAS TO BE CONSIDERED. IN VIEW OF THE PROVISIONS OF SECTION 48, SALE CONSI DERATION AS SHOWN IN THE SALE DEED ONLY HAS TO BE CONSIDERED. IN ATTILI NARYAN RAO VS. ITO 16 ITD 35, HONBLE ITA T OBSERVED THAT IN PARA 6 THAT CAPITAL GAINS CAN BE COMPUTED ONLY W ITH REFERENCE TO PRICE REALIZED BY THE ASSESSEE TOWARDS HIS INTEREST OF THE THIRD PARTIES IN THE PROPERTY SOLD. ITA NO.236(ASR)/2015 11 IN DCIT VS. SINGLA ENCLAVE DEVELOPERS (P) LTD. 156 TTJ (CHD.) (UO) 1, HONBLE ITAT HAS HELD THAT IN THE ABSENCE OF ANY OT HER EVIDENCE ON RECORD ADDITION TOWARDS UNDISCLOSED CONSIDERATION O N SALE OF SHOP- CUM-FLATS COULD NOT BE MADE SIMPLY BY SUBSTITUTING THE VALUE OF FLATS AS RECORDED IN MORTGAGE DEED FOR SALE PRICE S HOWN IN THE REGISTERED SALE DEED. IN CIT VS. DISCOVERY ESTATES (P) LTD. 356 ITR 159, THE HONBLE DELHI HIGH COURT HAS HELD THAT IT IS NOT OPEN TO THE AO O N THE BASIS OF WHAT HE PERCEIVED TO BE THE MARKET CONDITIONS, TO M AKE ADDITIONS TO THE SALE PRICE OF THE PROFITS, WITHOUT ANY EVIDENCE OF UNDERSTATEMENT. MOREOVER THERE IS NO OTHER PROVISION IN THE ACT PER MITTING THE AO TO ENHANCE THE PROFITS OR THE SALE PRICE EXCEPT SECT ION 50C AND SECTION 92BA OF THE I.T.ACT, 1961 AND THOSE SECTIONS WERE N OT APPLICABLE TO THE ASSESSEE. 13. THAT THE PROPOSAL RECEIVED FROM THE JCIT, RANG E-2, JAMMU, WHO HAS VALUED THE PROPERTY AT RS.22.04 CRORES, IS WITH OUT ANY BASIS. THE LD. JCIT, RANGE-2, HAS MERELY RELIED UPON THE V ALUATION REPORT DATED 18.12.2004 OF VALUER SH. Q.L. DUA WHICH WAS S UBMITTED TO CANARA BANK BY THE ASSESSEE COMPANY. THAT ASSESSEE GOT THE VALUATION DONE FROM APP ROVED VALUER ON 18.12.2004 AND VALUATION OF LAND WAS MADE AT RS.10 .06 CRORES. THIS VALUATION WAS ONLY FOR LOAN, OVERDRAFTS, WITHD RAW LIMITS, SECURITY (PRIMARY, PERSONAL OR COLLATERAL), SURETY, GUARANTEE, MORTAGE (LEGAL EQUITABLE OR OTHERWISE). THAT IT IS A KNOWN FACT THE VALUATION GIVEN TO BANKS ARE NORMALLY OVERVALUED TO GET ADDITIONAL LOANS AND THEREFORE VA LUE TAKEN AS PER VALUATION REPORT BY THE LD. JCIT, RANGE-2, JAMMU C ANNOT BE CONSIDERED AS TRUE MARKET VALUE OF THE SAID LEASEHO LD PROPERTY. SUDHIR INDUSTRIES VS. ITO 81 TTJ (JODH) ADDITION ON ACCOUNT OF DIFFERENCE IN STOCK STATEMEN T FILED WITH THE BANK. ASSESSEE EXPLAINED THAT THE VALUE OF STOCK S UBMITTED TO THE BANK IS PURPOSELY SHOWN AT HIGHER SIDE TO AVAIL BET TER FINANCIAL HELP. ADDITION DELETED. RULING OF HONBLE SUPREME COURT COUPLED WITH OMISSI ON OF SECTION 52 MAKE THE LEGAL POSITION CLEAR THAT UNLESS IT IS PRO VED THAT THERE IS SOME ADDITIONAL RECEIPT., ADDITION CANNOT BE MADE A VALUATION REPORT IS ONLY ON OPINION, BUT THAT DOES NOT SHOW O R PROVE THAT THERE IS SOME UNDERHAND DEALINGS AND CONSIDERATION HAS PA SSED MORE THAN WHAT IS DISCLOSED BY THE ASSESSEE. THIS HAS B EEN SO HELD IN BRITANIA IND. VS. DCIT; 238 ITR 57. CAPITAL GAIN IS THUS ON ACTUAL BASIS AND NOT ON FICTITIOUS VALUE. HONBLE HIGH COURT OF JAMMU & KASHMIR IN ASHOK KUMA R VS. ITO - 201 CTR 178 HAS HELD THAT ADDITION COULD NOT BE MAD E ON THE BASIS ITA NO.236(ASR)/2015 12 OF DIFFERENCE BETWEEN CLOSING STOCK DECLARED IN THE TRADING ACCOUNT AND STOCK SHOWN IN THE STATEMENT TO THE BANK AS ST OCK POSITION SHOWN TO THE BANK WAS ON ESTIMATE AND INFLATED VALU E WAS SHOWN TO AVAIL MORE CREDIT FROM THE BANK. SIMILAR HAS BEEN HELD IN : ASSTT. CIT VS. JYOTI WOOLLEM MILLS 125 TTJ 810 CIT VS. N. SWAMY 241 ITR 363 CIT VS. SIDHU RICE AND GENL. MILLS 281 ITR 428 CIT VS. VEERDIP ROLLERS PVT. LTD. 323 ITR 341 THAT THE MARKET VALUE OF ANY PROPERTY IS THE VALUE AT WHICH BUYER IS AGREEABLE TO BUY THE PROPERTY AND THE SELLER IS AGR EEABLE TO SELL THE PROPERTY. THAT THE ACTUAL AREA OF THE PROPERTY IS 1467.42 SQ . YARDS AND THAT HAS BEEN REFLECTED IN THE PURCHASE DEEDS, AGREEMENT TO SELL AND ALL COMMUNICATIONS WITH THE ASSESSING OFFICER. THAT BUYER AND SELLER HAD AGREED TO THE DEAL WITH R EGARD TO SAID LEASEHOLD PROPERTY IN THE FINANCIAL YEAR 2005-06 A ND FIRST INSTALMENT WAS PAID ON 24.09.2005. THEREFORE, FOR A LL INTENTS AND PURPOSES THE VALUATION IS TO BE TAKEN FOR THE FINAN CIAL YEAR 2005-06 WHICH IS THE RELEVANT YEAR FOR DETERMINING THE VALU E OF THE SAID LEASEHOLD PROPERTY. THAT IN PAGE NO.2 PARA NO.4, THE ASSESSING OFFICER HAS CONSIDERED THE MINIMUM RESERVE PRICE FOR AUCTION OF COMMERCIA L PL;OT AT RS.1,29,683/-/- PER SQUARE METER AND AFTER DEDUCTIO NS COMPUTED THE VALUE AT RS.9.12 CRORES. THE A.O. HAS NOT APPR ECIATED THE FACT THAT THE SAID LEASEHOLD LAND IS A RESIDENTIAL LAND AND THEREFORE RATES OF COMMERCIAL PROPERTY CANNOT BE APPLIED. THAT AS PER THE NOTIFICATION ISSUED FOR CIRCLE RATE S UNDER DELHI STAMPS RULES 2007, THE VALUE OF A RESIDENTIAL PROPE RTY IS 1/3 RD OF THE VALUE OF COMMERCIAL PROPERTY. THAT THE VALUATION OF LAND IS DONE GENERALLY IN CAS E OF FREEHOLD LAND. IN CASE OF LEASEHOLD LAND, REASONABLE DISCOUNT IS T O BE ALLOWED FOR REMAINING PERIOD OF LEASE WHICH IN THIS CASE WAS 25 YEARS IF YEAR OF NEGOTIATION IS CONSIDERED. IT WILL BE 21 YEARS IF T HE DATE OF HANDING OVER OF POSSESSION IS TO BE CONSIDERED. THAT THE MATTER WAS CONSIDERED BY THE ADDL. CIT, JA MMU WHILE MAKING ASSESSMENT FOR THE A.Y. 2007-08. AFTER ASSES SEES SUBMISSIONS THE MATTER WAS FILED. COPY OF ASSESSEE S WRITTEN SUBMISSION AND ASSESSMENT ORDER FOR ASSESSMENT YEAR 1007-08 IS ENCLOSED. ITA NO.236(ASR)/2015 13 THAT IT WAS OBSERVED BY THE LD. JCIT, RANGE-2, JAMM U THAT PURCHASER M/S. SUJATA HOTELS PVT. LTD., IS OWNED BY THE SAME SHAREHOLDERS OF NITCO LOGISTICS PVT. LTD. THE FACT IS THAT SOME OF THE SHAREHOLDERS OF THE ASSESSEE COMPANY ARE ALSO SHARE HOLDERS IN SUJATA HOTELS PVT. LTD. THAT YOUR GOODSELF HAS REFERRED TO PROVISIONS OF SE CTION 50C OF THE I.T. ACT WHERE THE MARKET VALUE FOR PAYMENT OF STAM P DUTY HAS TO BE TAKEN AS MARKET VALUE OF CALCULATION OF CAPITAL GAI NS. THIS PROVISIONS IS APPLICABLE WITH REGARD TO TRANSFER BY AN ASSESSE E OF A CAPITAL ASSET BEING LAND OR BUILDING OR BOTH. IN ITO VS. PRADES STEEL ROLLING MILLS 115 TTJ 294 & NAVNEET KOUR THAKUR VS. ITO 112 TTJ 76, IT HAS BEEN HELD THAT PR OVISIONS OF SECTION 50C ARE NOT APPLICABLE IN CASE OF TRANSFER OF LEASEHOLD RIGHTS. THAT ASSESSEE WAS NOT THE OWNER OF THE SAID LAND WH ICH BELONGS TO DELHI IMPROVEMENT TRUST ( NOW DDA) AND THE ASSESSEE COMPANY IS ONLY A LESSEE AND THEREFORE THE PROVISIONS OF SECT ION 50C ARE NOT APPLICABLE TO THE ASSESSEE HAS NOT TRANSFERRED ANY CAPITAL ASSET BEING LAND OR BUILDINGS. THAT WITHOUT PREJUDICE IT IS FURTHER TO SUBMIT THAT TRANSFER HAS TAKEN PLACE IN THE FINANCIAL YEAR 2005-06 THEREFORE VALUA TION AS PER STAMP ACT IS TO BE TAKEN AS PER RATE APPLICABLE IN THAT VERY YEAR AND NOT FOR THE YEAR IN WHICH POSSESSION WAS GIVEN. THAT CIRCLE RATES IN DELHI WERE FIRST INTRODUCED IN 18/07/2007 AND THEREFORE THERE WERE NO CIRCLE RATES FOR THE FINANC IAL YEAR 2005-06. COPY OF CIRCLE RATES ARE ENCLOSED. THAT EVEN IF CIRCLE RATES AS APPLICABLE IN THE FINA NCIAL YEAR 2007-08 ARE NOT APPLIED, THE MARKET VALUE WORKS OUT AS UND ER: TOTAL AREA 1467.42 SQ. YARDS OR 1226.94 SQ. METERS RATE OF RESIDENTIAL PLOT AS PER DELHI RS.21 ,800/- PER SQ. METER IN CATEGORY CIRCLE RATES 18/7/2007 D (KAROL BAGH) AS THE SALE TRANSACTION AGREED IN FINANCIAL YEAR 2005-06 INDEXED VALUE IN 2007-08 551 INDEXED VALUE IN 2005-06 497 THE PROPORTIONATE RATE 21800+497/551=RS.19,664/- PER SQ. METER THE MARKET VALUE AS PER CIRCLE RATE 19664+1 226.94=RS.2,41,26,548/- SAY RS.2.42 CRORES ITA NO.236(ASR)/2015 14 THE ABOVE WORKING SHOWS THAT EVEN IF PRO VISIONS OF SECTION 50C ARE TO BE APPLIED THE SALE VALUE DETERMINED AT RS.2.42 CRORES IS MUCH LESS THAN THE VALUE AT WHICH THE ASSESSEE COM PANY HAS SOLD THE LEASEHOLD RIGHTS. THAT ASSESSEE HAD PURCHASED THE SAID LEASEHOLD LAND FOR RS.1,12,500/- AND HAS CONSTRUCTED GODOWN. THE VALUA TION OF CONSTRUCTION AT RS.9,28,500/- MADE BY THE REGISTERE D VALUERS AS ON 1.4.1981 AND 18/12/2004 IS THE MARKET VALUE ONLY AN D SAME IS NEITHER THE COST NOR WRITTEN DOWN VALUE FOR THE PUR POSE OF ACCOUNTING. IN VIEW OF THE ABOVE SUBMISSION, IT IS PRAYED THA T THE PROCEEDINGS U/S 263 MAY PLEASE BE FILED. THE ASSESSEE SHALL BE PLEASED TO FURNISH ANY OTHER INFORMATION IN THIS REGARD. 3. THE LD. CIT DISPOSED OF THE ASSESSEES APPEAL BY VIRTUE OF THE IMPUGNED ORDER, HOLDING AS FOLLOWS: 3.2. THE BASIC PRINCIPLE OF INTERPRETATION IS TO ASCERTAIN THE INTENTION OF THE LEGISLATURE WHICH HAS TO BE GATHER ED FROM THE LANGUAGE USED WHICH MAY BE CLEAR AND EXPLICIT. THE FINANCE ACT, 2002 HAS INTRODUCED THE SECTION 50C WHICH IS APPLIC ABLE ON THE TRANSFER OF LAND OR BUILDING OR BOTH. AS PER THE S AID PROVISIONS OF THE ACT, IF AS A RESULT OF TRANSFER OF LAND OR BUILDING OR BOTH, THE CONSIDERATION DECLARED TO BE RECEIVED OR ACCRUING AS A RESULT OF WHICH TRANSFER IS LESS THAN THE VALUE ADOPTED OR AS SESSED OR ASSESSABLE (THE WORD ASSESSABLE HAS BEEN INSERTE D W.E.F. IST OCTOBER, 2009) BY ANY AUTHORITY OF A STATE GOVERNME NT FOR THE PURPOSE OF PAYMENT OF STMAP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE ALSO ADOPTED OR ASSESSED SHALL BE DEEMED TO B E THE FULL VALUE OF THE CONSIDERATION AND CAPITAL GAINS SHALL BE COM PUTED ACCORDINGLY U/S 148 OF THE ACT. HOWEVER, W.E.F. IST OCTOBER, 2 009 THE WORD ASSESSABLE HAS BEEN INSERTED AND AFTER SUCH INSER TION EVEN IF THE PROPERTY IS NOT REGISTERED THEN THE VALUE ASSESSABL E FOR STAMP DUTY PURPOSE CAN BE ASCERTAINED AND THE SAME HAS TO BE TAKEN AS SALE CONSIDERATION FOR THE PURPOSE OF COMPUTING CAPITAL GAINS IN CASE IT IS HIGHER THAN ACTUAL CONSIDERATION. THE BASIC RULE IS THAT CAPITAL GAINS ARE DEEMED TO BE INCOME OF THE PREVIOUS YEAR IN WHI CH THE TRANSFER GIVING RISE TO THE GAINS TAKEN PLACE. THUS, THE YEA R OF CHARGE IS THE YEAR IN WHICH THE SALE, EXCHANGE, RELINQUISHMENT ET C. TAKEN PLACED. WHERE THE TRANSFER IS BY WAY OF ALLOWING POSSESSION OF AN IMMOVABLE PROPERTY IN PART PERFORMANCE OF A CONTRAC T, IT IS THE YEAR IN WHICH SUCH POSSESSION IS HANDED OVER. IF THE HAN DING OVER OF THE POSSESSION PROCEEDS THE ENTERING INTO THE CONTRACT AND THE ITA NO.236(ASR)/2015 15 TRANSFEREE IS ALLOWED THE POSSESSION IN PART PERFOR MANCE OF THE PROPOSED CONTRACT, THE YEAR OF TAXABILITY OF THE CA PITAL GAIN IS THE YEAR, IN WHICH THE CONTRACT IS ENTERED INTO. AS PER SECTION 50C AS AMENDED W.E.F. 01.10.2009, THE CONSIDERATION WILL BE DEEMED EQUAL TO THE VALUE ASS ESSED OR ASSESSABLE BY REGISTERING AUTHORITY FOR THE PURPOSE OF STAMP DUTY. THEREFORE, IN CASE THE REGISTRATION HAS NOT YET TA KEN PLACE AND POSSESSION HAS BEEN GIVEN, THE CAPITAL GAIN WILL BE REQUIRED TO BE COMPUTED W.E.F. 1.10.2009 ON THE BASIS OF VALUE ASS ESSABLE BY REGISTERING AUTHORITY FOR THE PURPOSE OF STAMP DUTY IF THE SAME EXCEEDS THE AMOUNT OF CONSIDERATION AS PER AGREEMEN T W.E.F. IST OCTOBER, 2009, THE WORD ASSESSABLE HAS BEEN INSER TED AND AFTER SUCH INSERTION EVEN IF THE PROPERTY IS NOT REGISTER ED, THEN THE VALUE ASSESSABLE FOR STAMP DUTY PURPOSE CAN BE ASCERTAINE D, THE SAME HAS TO BE TAKEN AS SALE CONSIDERATION FOR THE PURPO SE OF COMPUTING CAPITAL GAINS, IN CASE IT IS HIGHER THAN ACTUAL CON SIDERATION. NO SPECIFIC METHOD OF VALUATION HAS BEEN PROVIDED U/S 50C OR THE RELEVANT SECTIONS OF THE WEALTH TAX ACT REFERRED TO FOR THE PURPOSE OF VALUATION U/S 50C BY THE DEPARTMENTAL VALUATION OFF ICER. THE PROPERTY HAS TO BE VALUED CONSIDERING ALL RELEVANT FACTORS LIKE COMPARABLE INSTANCES OF SALE IN THE LOCALITY. THE HONBLE SUPREME COURT IN THE CASE OF CHIMANLAL HARGOVINDDAS VS. SPE CIAL LAND ACQUISITION OFFICER AIR 1988 SC 1652 HAS PROVIDED S OME GUIDELINES. 3.2.2. IN SECTION 50C, THE WORD TRANSFER HAS BEE N USED AND FOR THE PURPOSE OF CAPITAL GAIN, THE SAID WORD TRANSFER H AS BEEN DEFINED UNDER SUB-SECTION 47 OF SECTION 2 OF THE I.T. ACT, 1961 AS UNDER: TRANSFER IN RELATION TO A CAPITAL ASSET, I NCLUDES: I) THE SALE, EXCHANGE OR RELINQUISHMENT OF THE ASSET; OR II) THE EXTINGUISHMENT OF ANY RIGHTS THEREIN OR III) THE COMPULSORY ACQUISITION THEREOF UNDER ANY LAW; O R IV) . V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSE SSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN P ART PERFORMANCE OF CONTRACT OF THE NATURE REFERRED TO I N SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882. EXPLANATION -1 : FOR THE PURPOSE OF SUB-CLAUSES (V) AND (VI) IMMOVABLE PROPERTY SHALL HAVE THE SAME MEANING AS I N CLAUSE (D0 OF SECTION 269UA EXPLANATION-2: FOR THE REMOVAL DOUBTS, IT IS HEREB Y CLARIFIED THAT TRANSFER INCLUDES AND SHALL BE DEEMED TO HAVE ALW AYS INCLUDED DISPOSING OF OR PARTING WITH AN ASSET OR ANY INTERE ST THEREIN, OR CREATING ANY INTEREST IN ANY ASSET IN ANY MANNER WH ATSOEVER, ITA NO.236(ASR)/2015 16 DIRECTLY OR INDIRECTLY, ABSOLUTELY OR CONDITIONALLY , VOLUNTARILY OR INVOLUNTARILY BY WAY OF AN AGREEMENT. THE WORD TRANSFER HAS M FURTHER BEEN DEFINED IN S UB-CLAUSE (1) OF SUB SECTION (2) OF SECTION 269UA AS UNDER: IN RELATION TO ANY IMMOVABLE PROPERTY REFERRED TO IN SUB-CLAUSE (10 OF CLAUSE (D), MEANS TRANSFER OF SUCH PROPERTY BY W AY OF SALE OR EXCHANGE OR LEASE FOR A TERM OF NOT LESS THAN TWELV E YEARS AND INCLUDES ALLOWING THE POSSESSION OF SUCH PROPERTY T O BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE N ATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT. EXPLANATION: FOR THE PURPOSE OF THIS SUB-CLAUSE, A LEASE WHICH PROVIDES FOR EXTENSION OF THE TERMS THEREOF BY A FU RTHER TERM OR TERMS SHALL BE DEEMED TO BE A LEASE FOR A TERM OF NOT LES S THAN TWELVE YEARS, IF THE AGGREGATE OF THE TERM FOR WHICH SUCH LEASE IS TO BE GRANTED AND THE FURTHER TERM OR TERMS FOR WHICH IT CAN BE SO EXTENDED IS NOT LESS THAN TWELVE YEARS: 3.3. FROM THE FACTS, PRIMA FACIE IT APPEARS THAT: A) THAT THE PROVISIONS OF SECTION 50C OF THE I.T. ACT, 1961 ARE NOT APPLICABLE TO THIS PROPERTY BEING A LEASEHOLD PROPERTY IS NOT CORRECT KEEPING IN VIEW THE FACT THAT LEASEH OLD RIGHTS ARE FOR A PERIOD OF MORE THAN TWELVE YEARS; B) THAT THE CIRCLE RATES ARE NOT APPLICABLE KEEPING IN VIEW THE FACT PROPERTY BEING LEASEHOLD PROPERTY IS NOT CORRE CT IN VIEW OF (A) ABOVE AS THE WORD ASSESSABLE HAS BEE N INSERTED IN THE SAID PROVISIONS OF THE ACT AS THE V ALUE HIGHER THAN THE DECLARED PRICE IN THE TRANSFER DEED WILL BE TAKEN. HOWEVER, AN ASSESSEE MAY OBJECT AND CLAIM BEFORE THE AO THAT THE VALUE ADOPTED IS HIGHER THAN THE FAIR MARKET VALUE OF THE PROPERTY ON THE DATE OF TR ANSFER, THE AO MAY REFER THE VALUATION OF THE PROPERTY THE VALUATION OFFICER IN THE MANNER AS MENTIONED IN SEC TION 50C(2) OF THE ACT. C) KEEPING IN VIEW (B) ABOVE IT WILL HAVE NO RELEVANCE . D) KEEPING IN VIEW (B) IT WILL HAVE NO RELEVANCE E) THE ISSUE HAS BEEN DISCUSSED IN DETAIL SUPRA 3.4. PRIMA FACIE THIS IS A CASE WHERE THE AO, WHO PASSED THIS IMPUGNED ORDER, HAS NOT LOOKED INTO ALL THE RELEVA NT MATERIAL FACTS AND RELEVANT SECTIONS OF INCOME TAX ACT, 1961 AS APPLICABLE TO ASSESSEES CASE AS ON DATE. THEREFORE , I AM OF THE VIEW THAT THE AO MAY LOOK INTO ALL THE ASPECTS RAISED IN THE PETITION FILED U/S 263 AND CONSIDER THE OBJECTIONS STATED THEREIN. TO THAT EXTENT, I HOLD THAT THE ORDER WAS PREJUDICE TO ITA NO.236(ASR)/2015 17 THE INTEREST OF REVENUE AND THEREFORE, NEEDS TO BE MADE DENOVO ON THE PARTICULAR ISSUES AFTER TAKING INTO CONSIDER ATION THE SUBMISSIONS FILED BY THE ASSESSEE AND SECTIONS APPL ICABLE. HOWEVER, IT MAY BE EMPHASIZED HERE AGAIN THAT THE ASSESSMENT MAY BE RE-FRAMED ONLY ON THIS ASPECT AFT ER PROVIDING A SUITABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE 4. THE LD. COUNSEL FOR THE ASSESSEE HAS, AT TH E OUTSET, CONTENDED THAT AN ORDER PASSED U/S 263 OF THE ACT, LIKE THE ONE PR ESENTLY UNDER CHALLENGE, IS NOT SUSTAINABLE IN LAW, IF THE AOS ORDER IS NOT HELD TO BE SATISFYING THE TWIN CONDITIONS OF BEING ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE; THAT FOR INVOKING THE PRO VISIONS OF SECTION 263 OF THE ACT, TWIN CONDITIONS MUST BE FULFILLED, I.E. , 1. THE ASSESSMENT ORDER OF AO IS ERRON EOUS AND 2. THE ASSESSMENT ORDER OF AO IS PREJUD ICIAL TO THE INTEREST OF REVENUE. THAT BOTH THESE CONDITIONS HAVE TO BE FULFILLED SI MULTANEOUSLY TO INVOKE SECTION 263 OF THE ACT, THAT A PERUSAL OF ORDER P ASSED U/S 263 OF THE ACT BY THE COMMISSIONER OF INCOME TAX, JAMMU SHOWS THAT THE WORTHY CIT HAS CONCLUDED IN PARA 3.4 OF THE ORDER, THAT THE AS SESSMENT ORDER PASSED BY THE AO WAS PREJUDICIAL TO THE INTEREST OF REVENU E AND THEREFORE, NEEDS TO BE MADE DENOVO; AND THAT THUS, THE ASSESSMENT OR DER HAS NOT BEEN HELD TO BE ERRONEOUS 5. RELIANCE IN THIS REGARD HAS BEEN PLACED ON T HE FOLLOWING CASE LAWS: I) MALABAR INDUSTRIES CO. LTD. VS. CIT, 243 ITR 83 (SC) II) CIT VS. VIKAS POLYMERS, 341 ITR 53 (ALL.) III) CIT VS. GABRIEL INDIA LTD., 203 ITR 108 (BOM.) ITA NO.236(ASR)/2015 18 IV) ITO VS. ARVIND JEWELLERS, 259 ITR 502 (GUJ.) 6. ON THE OTHER HAND, THE LD. DR HAS PLACED S TRONG RELIANCE ON THE IMPUGNED ORDER. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. SECTION 263 OF THE A CT LAYS DOWN THAT: THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECO RD OF ANY PROCEEDINGS UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSESSING OFFICER IS ER RONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BE ING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THERON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORD ER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELIN G THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. 8. THUS, IN ORDER TO INVOKE THE PROVISIONS OF SECTION 263 OF THE ACT, THE LD. CIT MUST HOLD THAT THE AOS ORDER SATISFIES BOTH THE CONDITIONS OF BEING ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTE RESTS OF THE REVENUE. 9. IN THIS REGARD, IN MALABAR INDUSTRIES C O. LTD. VS. CIT (SUPRA), IT HAS BEEN HELD THAT : A BARE READING OF THIS PROVISION MAKES IT CLEAR THA T THE PREREQUISITE TO THE EXERCISE OF JURISDICTION BY THE COMMISSIONER SUO MOTU UNDER IT, IS THAT THE ORDER OF THE INCOME- TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT ERESTS OF THE REVENUE. THE COMMISSIONER HAS TO BE SATISFIED TO TW IN CONDITIONS, NAMELY, (I) THE ORDER OF THE ASSESSING OFFICER SOUG HT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERE STS OF THE REVENUE. IF ONE OF THEM IS ABSENT- IF THE ORDER OF THE INCOM E-TAX OFFICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IS PREJUDICIAL TO THE REVENUE RECOU RSE CANNOT BE HAD TO SECTION 263(1) OF THE ACT. THERE CAN BE NO DOUBT THAT THE PROVISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COM MITTED BY THE ITA NO.236(ASR)/2015 19 ASSESSING OFFICER, IT IS ONLY WHEN AN ORDER IS ERRO NEOUS THAT THE SECTION WILL BE ATTRACTED . AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUI REMENT OF THE ORDER BEING ERRONEOUS. IN THE SAME CATEGORY FALL ORDERS P ASSED WITHOUT APPLYING THE PRINCIPLES OF NATURAL JUSTICE OR WITHO UT APPLICATION OF MIND. THE PHRASE PREJUDICIAL TO THE INTERESTS OF T HE REVENUE IS NOT AN EXPRESSION OF ART AND IS NOT DEFINED IN THE ACT. UNDERSTOOD IN ITS ORDINARY MEANING IT IS OF WIDE IMPORT AND IS NOT CONFINED TO LOSS OF TAX. THE SCHEME OF THE ACT IS TO LEVY AND C OLLECT TAX IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND THIS TASK IS ENTRUSTED TO THE REVENUE. IF DUE TO AN ERRONEOUS OR DER OF THE INCOME-TAX OFFICER, THE REVENUE IS LOSING TAX LAWFU LLY PAYABLE BY A PERSON, IT WILL CERTAIN BE PREJUDICIAL TO THE INTE RESTS OF THE REVENUE. THE PHRASE PREJUDICIAL TO THE INTERESTS O F THE REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORD ER PASSED BY THE ASSESSING OFFICER. EVERY LOSS OF REVENUE AS A C ONSEQUENCE OF AN ORDER OF AO CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, FOR EXAMPLE, WHEN AN ITO ADOPTED ONE OF TH E COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF R EVENUE; OR WHERE TWO VIEWS ARE POSSIBLE AND THE ITO HAS TAKEN ONE VI EW WITH WHICH THE CIT DOS NOT AGREE, IT CANNOT BE TREATED AS AN E RRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE ITO IS UNSUSTAINABLE IN LAW. 10. IN CIT VS. VIKAS POLYMERS, 341 ITR 537 (DELHI ), IT WAS HELD THAT CIT HAS TO BE SATISFIED OF TWIN CONDITIONS, NAMELY, (I) THE ORDER OF THE AO SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS P REJUDICIAL TO THE INTEREST OF THE REVENUE THAT IF ONE OF THEM IS ABSENT. I.E., IF THE ORDER OF THE ITO IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IT IS PREJUDICIAL TO THE REVENUE, RECOURSE CANN OT BE HAD TO SECTION 263(1) THAT IT IS A PRE-REQUISITE THAT THE CIT MUST GIVE REASONS TO JUSTIFY THE EXERCISE OF SUO MOTU REVISIONAL POWERS BY HIM T O RE-OPEN A CONCLUDED ASSESSMENT; THAT A BARE REITERATION BY HIM THAT THE ORDER OF THE ITO IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL T O THE INTEREST OF THE REVENUE, WILL NOT SUFFICE; AND THAT IF A QUERY IS R AISED DURING THE COURSE ITA NO.236(ASR)/2015 20 OF SCRUTINY BY THE AO, WHICH WAS ANSWERED TO THE SA TISFACTION OF THE AO, BUT NEITHER THE QUERY, NOR THE ANSWER WAS REFLECTE D IN THE ASSESSMENT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUS ION THAT THE ORDER OF THE AO CALLED FOR INTERFERENCE AND REVISION. 11. IN CIT VS. GABRIEL INDIA LTD., (SUPRA), IT W AS HELD THAT POWER OF SUO MOTU REVISION UNDER SUB SECTION (1) OF SECTION 263 IS IN THE NATURE OF SUPERVISORY JURISDICTION AND THE SAME CAN BE EXERCI SED ONLY IF THE CIRCUMSTANCES SPECIFIED THEREIN EXIST; THAT TWO CIR CUMSTANCES MUST EXIST TO ENABLE THE COMMISSIONER TO EXERCISE POWER OF REV ISION UNDER THIS SUB- SECTION, VIZ., (I) THE ORDER IS ERRONEOUS; (II) BY VIRTUE OF THE ORDER BEING ERRONEOUS PREJUDICE HAS BEEN CAUSED TO THE INTER ESTS OF THE REVENUE; THAT IT HAS, THEREFORE, TO BE CONSIDERED FIRSTLY AS TO WHEN AN ORDER CAN BE SAID TO BE ERRONEOUS; THAT AN ORDER CANNOT BE TERME D AS ERRONEOUS UNLESS IT IS NOT IN ACCORDANCE WITH LAW; THAT IF AN ITO ACTING IN ACCORDANCE WITH LAW MAKES A CERTAIN ASSESSMENT, TH E SAME CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BEC AUSE ACCORDING TO HIM THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORA TELY; AND THAT THIS SECTION DOES NOT VISUALIZE A CASE OF SUBSTITUTION O F THE JUDGMENT OF THE COMMISSIONER FOR THAT OF THE ITO, WHO PASSED THE OR DER, UNLESS THE DECISION IS HELD TO BE ERRONEOUS. 12. IN S MURUGAN VS. ITO 135 ITD 527 ( ITAT CHEN NAI BENCH), IT WAS HELD THAT AN ORDER CAN BE REVISED ONLY AND ONLY WH EN THE TWIN CONDITIONS OF ERROR IN THE ORDER AND PREJUDICE C AUSED TO REVENUE CO- ITA NO.236(ASR)/2015 21 EXIST; THAT ONCE THE CIT COMES TO A CONCLUSION, ON BASIS OF MATERIAL, THAT THE ORDER OF THE AO IS ERRONEOUS AND ALSO PREJUDICI AL TO THE INTERESTS OF REVENUE, THE CIT IS EMPOWERED TO PASS AN ORDER AS T HE CIRCUMSTANCES OF THE CASE MAY WARRANT; THAT HE MAY PASS AN ORDER ENH ANCING THE ASSESSMENT OR HE MAY MODIFY OR CANCEL SAME AND DIR ECT TO FRAME A FRESH ASSESSMENT; THAT THE LD. CIT IS REQUIRED TO EXERCIS E THE REVISIONAL POWER WITHIN THE BOUNDS OF LAW AND HAS TO SATISFY THE NE ED OF FAIRNESS IN ADMINISTRATIVE ACTION AND FAIR PLAY WITH DUE RESPEC T TO THE PRINCIPLE OF AUDI ALTERAM PARTEM, AS ENVISAGED IN THE CONSTITUTI ON OF INDIA, AS WELL AS IN S. 263; THAT REVISION HAS TO BE DONE FOR THE PU RPOSE OF SETTING RIGHT DISTORTIONS AND PREJUDICES CAUSED TO REVENUE IN ABO VE CONTEXT; THAT AN ASSESSMENT ORDER CAN BE REVISED IF AND ONLY IF THE SAID TWIN CONDITIONS CO-EXIST; THAT IF THE AO EXAMINED ISSUE FROM ALL AN GLES, HIS ORDER CANNOT BE SAID TO BE ERRONEOUS ON ACCOUNT OF NON-APPLICATI ON OF MIND, AND HENCE, ONE OF THE TWIN CONDITIONS PRECEDENT TO REVI SE, THE ORDER WOULD BE MISSING; AND THAT RESULTANTLY, THE ASSESSMENT ORDE R IN QUESTION COULD NOT BE REVISED. 13. IN THE RESENT CASE, THE LD. PRI. CIT HAS, IN PA RA 3.4 OF THE IMPUGNED ORDER HELD AS FOLLOWS: 3.4 PRIMA FACIE THIS IS A CASE WHERE THE AO, WHO PASSED THIS IMPUGNED ORDER, HAS NOT LOOKED INTO ALL THE RELEVA NT MATERIAL FACTS AND RELEVANT SECTIONS OF INCOME TAX ACT, 1961 AS AP PLICABLE TO ASSESSEES CASE AS ON DATE. THEREFORE, I AM OF THE VIEW THAT THE AO MAY LOOK INTO ALL THE ASPECTS RAISED IN THE PETITIO N FILED U/S 263 AND CONSIDER THE OBJECTIONS STATED THEREIN. TO THAT EXT ENT, I HOLD THAT THE ORDER WAS PREJUDICE TO THE INTEREST OF REVENUE AND THEREFORE, NEEDS ITA NO.236(ASR)/2015 22 TO BE MADE DENOVO ON THE PARTICULAR ISSUES AFTER TA KING INTO CONSIDERATION THE SUBMISSIONS FILED BY THE ASSESSEE AND SECTIONS APPLICABLE. HOWEVER, IT MAY BE EMPHASIZED HERE AGAI N THAT THE ASSESSMENT MAY BE RE-FRAMED ONLY ON THIS ASPECT AFT ER PROVIDING A SUITABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . 14. A BARE PERUSAL OF PARA 3.4. OF THE IMPUGNED ORDER SHOWS THAT THE LD. PRI. CIT HELD THE AOS ORDER TO BE ONLY PREJUDI CIAL TO THE INTERESTS OF THE REVENUE. IT WAS ON THIS SOLE BASIS THAT THE AO WAS DIRECTED TO MAKE ASSESSMENT DENOVO. THUS, OBVIOUSLY, THE SECOND COND ITION OF THE AOS ORDER BEING ERRONEOUS IS NOT SHOWN TO EXIST EVEN B Y THE LD. PRI. 4E5CIT HIMSELF. THIS IS IN DIRECT CONTRADICTION TO THE AF ORESAID CASE LAWS. THAT BEING SO, THE ORDER UNDER APPEAL IS NOT SUSTAINABLE IN LAW. THE SAME IS ACCORDINGLY QUASHED. CONSEQUENTLY, THE AOS ORDER I S SUSTAINED. 15. IN VIEW OF THE ABOVE, NOTHING FURTHER SURV IVES FOR ADJUDICATION NOR ANYTHING WAS ARGUED BEFORE US. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/05/ 2016. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 31/05/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:NITCO LOGISTICS PVT. LTD. JAMMU 2. THE PRINCIPAL CIT, JAMMU 3. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER