SANGEETA AGARWAL, JAIPUR V. PR. CIT-2, JAIPUR

ITA 261/JPR/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6486 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 05-05-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B K GUPTA CIT DR DHK
• Assessee Lawyers: S L PODDAR
• Keywords: Sale consideration of property below Jantri Value; Business income; Revision of order; Revised return; Reassessment proceedings; TDS; Set aside
• Section: 143(3); 50C; 142(1); 133(6); 64; 13; 22; 147; 148; 263; 63

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,B JAIPUR JH ,U-DS-LSUH] MIK/;{K ,O LAANHI XKSLKBZ] U;KF;D LNL; DS LE{K BEFORE: SHRI N.K. SAINI, V.P. & SHRI SANDEEP G OSAIN, JM VK;DJ VIHY LA-@ ITA NO. 261/JP/2020 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SMT. SANGEETA AGARWAL A-243B, PROP: M/S. GUPTA ENGINEERING WORKS, ROAD NO. 6, VKI AREA, JAIPUR CUKE VS. THE PR.CIT CIRCLE-2 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ADGPA 6938 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPOND ENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR, ADVOCATE JKTLO DH VKSJ LS@ REVENUE BY: SHRI B.K. GUPTA, CIT- DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16/09/2020 MN?KKS'K.KK DH RKJH[K@ DATE OF PRONOUNCEMENT: 17 /09/2020 VKNS'K@ ORDER PER SANDEEP GOSAIN, J.M. THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. PR.CIT - 2, JAIPUR DATED 13.09.2020 FOR TH E ASSESSMENT YEAR 2010- 11 PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 ON THE GROUNDS MENTIONED HEREINBELOW. 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. PR.CIT ERRED IN PASSING THE ORDER U/S 263 O F THE I.T. ACT, 1961 WHICH IS VOID AB INITIO DESERVES TO BE QU ASHED. ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 2 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. PR.CIT HAS ERRED IN PASSING THE ORDER U/S 2 63 OF THE ACT ON THE GROUNDS WHICH ARE NOT PREJUDICIAL TO THE INTEREST OF REVENUE OR ERRONEOUS. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. PR.CIT HAS ERRED IN GIVING THE FINDINGS ON THE ISSUES WHICH HAS ALREADY BEEN DECIDED BY THE AO. 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. PR.CIT HAS ERRED IN GIVING DIRECTION FOR FO LLOWING ISSUES WHICH HAS ALREADY DEALT BY THE AO IN THE ORD ER PASSED U/S 148/143(3) OF THE I.T. ACT, 1961. (I) ISSUE REGARDING SALE OF LAND AS BUSINESS INCOME. (II) EXPENDITURE INCURRED ON BROKERAGE AND COMMISSION FOR SALE OF LAND. (III) INTEREST INCOME (IV) PROPRIETORS CAPITAL. 2.1 DURING THE COURSE OF HEARING, LD.AR OF THE ASSE SSEE SUBMITTED THAT HE HAS FILED THE REVISED GROUNDS OF APPEAL UNDER RU LE 11 R.W.S. 22 OF THE INCOME TAX APPELLATE TRIBUNAL RULES, 1963.THE REVIS ED GROUNDS OF APPEAL OF THE ASSESSEE ARE AS UNDER:- 1. FOR THAT THE ORDER U/S 263 IS BADE IN LAW FOR THE REASON THAT THE PROCEEDINGS U/S 147 INITIATED ITSEL F WAS BAD IN LAW, THE ORDER U/S 147/143(3) WAS NOT MAINTAINABLE SINCE NO ASSESSMENT CAN BE MADE FOR MAKING ROWING AND FISHIN G ENQUIRY AND AN INVALID ASSESSMENT CANNOT BE SET ASI DE U/S 263. 2. FOR THAT THE ORDER U/S 263 IS ALSO OTHERWISE BAD IN LAW FOR THE REASON THAT NO ADDITION WAS MADE FOR THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT U/ S 147 AND AS SUCH NO OTHER ADDITION COULD HAVE BEEN MADE BY T HE AO ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 3 THEREFORE, THE LD. CIT CANNOT DIRECT THE AO TO ENQU IRE AND MAKE ADDITION ON VARIOUS ISSUES. 2.2 SINCE THE ASSESSEE HAS FILED THE REVISED GROUND S OF APPEAL UNDER RULE 11 R.W.S. 22 OF THE INCOME TAX APPELLATE TRIBU NAL RULES, 1963, THEREFORE, THE BENCH DOES NOT FIND ANY ADVERSE REAS ON TO REJECT THE SAME BEING THE LEGAL GROUNDS AS PRAYED BY THE LD.AR THAT IT GOES TO THE ROOT OF THE MATTER. ALTHOUGH THE LD. DR CONTESTED THE REVIS ED GROUNDS AND SUBMITTED THAT THE ASSESSEE IS NOT ENTITLED TO TAKE THE SAME AT THIS STAGE. HOWEVER, WE ARE OF THE VIEW THAT REVISED GROUNDS SO RAISED BY THE ASSESSEE ARE LEGAL IN NATURE AND DO NOT REQUIRE ANY SEPARATE EVIDENCE FOR ADJUDICATION. HENCE, THE REVISED GROUNDS OF APPEAL FILED BY THE ASSESSEE IS ADMITTED IN ACCORDANCE WITH THE PROVISIONS OF INCO ME TAX APPELLATE TRIBUNAL RULES, 1963 FOR WHICH THE LD. DR HAS NO OB JECTION. 3.1 FIRST OF ALL, WE TAKE UP THE ORIGINAL GROUNDS O F APPEAL FILED BY THE ASSESSEE FOR ADJUDICATION. 4.1 APROPOS GROUND NO. 1 TO 4 OF THE ASSESSEE, T HE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND THE ASSESSEE HAS FILED HER RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION O N 29-09-2020 DECLARING HER TOTAL INCOME AT RS. 45,45,440/-. SUBS EQUENTLY, THE NOTICE U/S 148 WAS ISSUED ON 29-03-2017 AND PROCEEDINGS FOR RE OPENING THE ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 4 ASSESSMENT WERE INITIATED AND ASSESSMENT WAS COMPLE TED U/S 148/143(3) ON 7-12-2017. THEREAFTER THE LD. PR. CIT INITIATED THE PROCEEDINGS U/S 263 OF THE ACT BY ISSUING THE NOTICE AND AFTER HEARING THE PARTIES, ORDER U/S 263 OF THE ACT WAS PASSED ON 13-03-2000 THEREBY THE ORDER OF ASSESSMENT DATED 7-12-2017 WAS SET ASIDE BY CONSIDERING THE SA ME TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE OBS ERVATION OF THE LD. PR. CIT AT PARA 6 OF HER ORDER IS AS UNDER:- 6. IN VIEW OF THE ABOVE, I HOLD THAT THE ORDER PASSED BY THE AO ON 7-12-2017 WAS PASSED WITHOUT CONDUCTING NECESSARY INQUIRIES AND WITHOUT VERIFYIN G NECESSARY DETAILS WHICH AO OUGHT TO HAVE DONE CONSI DERING THE ISSUES INVOLVED AND THE FACTS OF THE CASE AS ME NTIONED IN PARA 5 ABOVE. THE ORDER PASSED BY THE AO ON 7-12-20 17 IS THEREFORE, HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE ORDER PASSED BY THE AO IS ALSO HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REV ENUE IN TERMS OF CLAUSE (A) & (B) OF EXPLANATION (2) TO SEC TION 263 OF THE ACT. THE ORDER PASSED BY THE AO, THUS DESERVES TO BE SET ASIDE TO BE MADE A FRESH AFTER GIVING OPPORTUNITY T O THE ASSESSEE. THE ORDER OF THE AO IS, ACCORDINGLY, SET ASIDE. 4.2 AGAINST THIS ORDER OF THE LD. PR. LD. CIT, THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE US ON THE GROUNDS MENTIONED HEREIN ABOVE. 4.3 THE GROUND NOS. 1 TO 4 RAISED BY THE ASSESSEE ARE INTERRELATED AND INTERCONNECTED AND RELATE TO CHALLENGING THE ORDER OF THE LD. PR.CIT PASSED ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 5 U/S 263 OF THE ACT. THEREFORE, WE THOUGHT IT FIT TO DISPOSE OFF THESE GROUNDS THROUGH A COMMON ORDER. 4.4 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE REITERATED THE SAME ARGUMENTS AS WERE RAISED BY HIM BEFORE THE LD PR.CIT AND HE HAS ALSO FILED THE WRITTEN SUBMISSIONS TO THIS EFFECT A S UNDER:- MAIN GROUND NO. 1 TO 4 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED PR.CIT ERRED IN PASSING THE ORDER U/S 263 OF THE IT ACT 1961 WHI CH IS VOID AB-INITIO DESERVES TO BE QUASHED. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX HAS ERRED AND PASSING TH E ORDER U/S 263 OF INCOME TAX ACT, 1961 ON THE GROUNDS WHICH ARE NOT P REJUDICIAL TO THE INTEREST OF THE REVENUE OR ERRONEOUS. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED PRINCIPAL CIT HAS ERRED IN GIVING THE FINDINGS ON THE ISSUES WHICH HAS ALREADY BEEN DECIDED BY THE LEARNED ASSESSING OFFICER. 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED PRINCIPAL CIT HAS ERRED IN GIVING DIRECTION FOR FOLLOWING ISS UES WHICH HAS ALREADY DEALT BY THE LEARNED ASSESSING OFFICER IN THE ORDER PASSE D U/S 148/143(3) OF THE IT ACT, 1961 (I) ISSUE REGARDING SALE OF LAND AS BUSINESS INCOME. (II) EXPENDITURE INCURRED ON BROKERAGE AND COMMISSION FO R SALE OF LAND. (III) INTEREST INCOME. (IV) PROPRIETORS CAPITAL. THE ASSESSEE IS AN INDIVIDUAL AND THE ASSESSEE HAS FILED RETURN FOR ASSESSMENT YEAR 2010-11 ORIGINALLY ON 29.09.2010 DECLARING TOT AL INCOME AT RS. 45,52,440/-. A COPY OF THE IT RETURN ALONG WITH THE COMPUTATION OF INCOME IS AVAILABLE ON PAPER BOOK PAGE NUMBER 1 TO 7. SUBSEQUENTLY NOTICE U/S 148 WAS ISSUED ON 29.03.2017 AND IN COMPLIANCE THEREOF THE ASSESSEE FILED THE INCOME TAX RETURN ON 03.11.2017 DECLARING THE INCOM E AT RS. 45,52,440/-. A COPY OF THE IT RETURN ALONG WITH THE COMPUTATION OF INCOME FIELD ON 03.11.2017 IS AVAILABLE ON PAPER BOOK PAGE NUMBER 8 TO 12 . THE ASSESSMENT ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 6 WAS COMPLETED U/S 148/143(3) DATED 07.12.2017 ON TH E SAME INCOME. COPY OF ASSESSMENT ORDER IS AVAILABLE ON PAPER BOOK PAGE NO. 13 TO 15 . SUBSEQUENTLY THE LEARNED PR. CIT-2 HAS ISSUED NOTICE ON 07.08.20 19. COPY OF NOTICE IS AVAILABLE ON PAPER BOOK PAGE NO. 16 TO 19 . THE ASSESSEE REPLIED THE NOTICE VIDE REPLY DATED 22.08.2019. COPY OF REPLY IS AVAIL ABLE ON PAPER BOOK PAGE NO. 20 TO 23 . BUT THE LEARNED PR. CIT NOT CONVINCED WITH THE RE PLY FILED BY THE ASSESSEE AND SET ASIDE THE ORDER PASSED BY LEARNED AO ON 07.12.2017. THE ORDER PASSED BY THE LEARNED PR. CIT IS UNLAWFUL, IL LEGAL AND UNJUST BECAUSE OF THE FOLLOWING REASONS- 1. THE LEARNED AO HAS COMPLETED THE RE-OPENED ASSESSME NT BY CONSIDERING THE REASONS RECORDED FOR RE-OPENING OF THE ASSESSMENT. THE REASONS RECORDED ARE AS UNDER: - AS PER AST SYSTEM (AIR INFORMATION), IT HAS BEEN F OUND THAT THE ABOVE MENTIONED PERSON HAS NOT FILED RETURN OF INCOME FOR AY 2010-11. FURTHER ISSUED LETTER REGARDING INFORMATIO N SOUGHT U/S 133(6) OF THE ACT IS ALSO NOT COMPLIED BY THE SAID PERSON. LATER ON, IT WAS NOTICED THAT THE ASSESSEE SOLD IMM OVABLE PROPERTY VALUED OF RS. 23,40,000/- AND FURTHER SUB REGISTRAR VALUED (FINAL VALUE) THIS PROPERTY AT RS. 46,80,000/-. SINCE, RETURN HAS NOT BEEN FILED BY THE ASSESSEE TH EREFORE, VERIFICATION CANOE BEEN POSSIBLE AT THIS TIME. LOOKING TO THE FACTS MENTIONED ABOVE, I HAVE REASON S TO BELIEVE THAT THE INCOME TO THE EXTENT OF RS. 46,80,000/- HA S ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE IT ACT, 19 61. THEREFORE IT IS FIT CASE TO ISSUE NOTICE U/S 148 OF THE INCOME TAX ACT, 1961. IN THE REASONS RECORDED IN THE FIRST PARA THE LEARN ED AO HAS MENTIONED THAT THE ASSESSEE NOT FILED THE RETURN WH ICH IS NOT CORRECT. THE ASSESSEE HAS ORIGINALLY FILED RETURN ON 29.09.2 010 COPY OF WHICH IS PLACED ON PAPER BOOK PAGE NO. 1. THE LEARNED AO FURTHER MENTIONED THAT HE ISSUED LETTER U/S 133(6) OF THE ACT FOR CAL LING SOME INFORMATION, THIS LETTER WAS NEVER RECEIVED BY THE ASSESSEE. IN THE NEXT PARA OF REASONS RECORDED THE LEARNED AO FURTHER MENTIONED THAT IT WAS NOTICED THAT THE ASSESSEE SOL D IMMOVABLE PROPERTY VALUED OF RS. 23,40,000/- AND FURTHER SUB REGISTRAR VALUED (FINAL VALUE) THIS PROPERTY AT RS. 46,80,000/-. THI S FACT WAS CORRECT AND THE ASSESSEE HAS SHOWN THIS TRANSACTION OF SALE OF PROPERTY IN THE RETURN FILED ORIGINALLY ON 29.09.2010. SO THE REASONS WERE NOT RECORDED BY APPRECIATING THE CORRECT FACTS AS WELL AS PROPER AP PLICATION OF MIND. ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 7 IN THE LAST PARA OF THE REASONS RECORDED THE LEARNE D AO FURTHER MENTIONED THAT SINCE, RETURN HAS NOT BEEN FILED BY THE ASSESSEE THEREFORE, VERIFICATION CANOE BEEN POSSIBLE AT THIS TIME. LOOKING TO THE FACTS MENTIONED ABOVE, I HAVE REASON S TO BELIEVE THAT THE INCOME TO THE EXTENT OF RS. 46,80,000/- HA S ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE IT ACT, 19 61. THEREFORE IT IS FIT CASE TO ISSUE NOTICE U/S 148 OF THE INCOME TAX ACT, 1961. THE ABOVE REASONS ARE ALSO NOT CORRECT SINCE THE AS SESSEE HAS FILED THE RETURN DULY DISCLOSING THE TRANSACTION, THEREFORE THE REAS ONS RECORDED FOR REOPENING OF THE ASSESSMENT PROCEEDINGS ARE INVALID AND ARE NOT SUSTAINABLE. THEREFORE WHERE THE VERY INITIATION OF REASSESSMENT PROCEEDIN GS ARE NOT SUSTAINABLE THE ORDER PASSED BY LEARNED PCIT U/S 263 OF THE INCOME TAX ACT, 1961 IS VOID AB- INITIO. 4.5 IT WAS SUBMITTED THAT DURING THE REASSESSMENT P ROCEEDINGS THE AO HAS MADE PROPER ENQUIRIES WHICH ARE NECESSARY ACCOR DING TO REASONS RECORDED. THE LD.AR FURTHER SUBMITTED THAT THE ORD ER PASSED BY THE AO IS NOT ERRONEOUS AND NOT PREJUDICIAL TO THE INTERES T OF THE REVENUE. THE LD.AR RELIED UPON FOLLOWING CASE LAWS. (I) MALABAR INDUSTRIAL CO LTD. VS. CIT (2000) 243 ITR 8 3 (SC) (II) VESUVIUS INDIA LTD VS. CIT (2002) 54 SOT 172 (ITAT- KOLKATA) (III) C I T-1 JAIPUR VS M/S GREEN TRIVENI DEVELOPER ON 24 OCTOBER, 2017- HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT - D.B. INCOME TAX APPEAL NO. 114 / 2015 (IV) CIT V. HONDA SIEL POWER PRODUCTS LTD . (2011) 33 ITR 547 (DELHI), ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 8 4.6 ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ER OF THE LD.PR.CIT AND FILED THE WRITTEN SUBMISSION TO THIS EFFECT PRA YING THAT THE FINDINGS RECORDED BY THE LD.PR.CIT IN THE IMPUGNED ORDER IS IN ORDER FOR WHICH THE LD. DR RELIED ON THE FOLLOWING CASE LAWS. 1. CIT VS SUN ENGINEERING WORKS LTD., 64 TAXMANN.COM 442 (SC) 2. CIT VS A SAMARAPURI CHETTY RATNAM AND ABDUL HADI, 64 TAXMANN.COM 344 (MAD. H.C) 3. CIT VS JACOB J THALIATH, 344 ITR 279 (KERALA) 4. GIGABYTE TECHNOLOGY (INDIA) (P) LTD VS CIT (2015) 53 TAXMANN.COM 30 (PANJI TRIB) 5. BABULAL S SOLANKI VS ITO (2019) 104 TAXMANN.COM 155 (AHD. TRIB) 6. DANIEL MERCHANTS P. LTD VS ITO, ANRM (SC) (SLP NO. 23976/2017 7. KERALA STATE ELECTRICITY BOARD LTD. VS DCIT, CIRCLE 1(1), TRIVENDRUM [2019] 111 TAXMANN.COM 353 (COCHIN TRIB) 4.7 WE HAVE HEARD THE LD. COUNSELS FOR BOTH THE PAR TIES AND WE HAVE ALSO PERUSED THE MATERIALS PLACED ON RECORD, DELIBE RATED UPON JUDGEMENTS CITED BY THE PARTIES AS WELL AS THE ORDERS OF THE R EVENUE AUTHORITIES. FROM THE FACTS, WE NOTICED THAT THE ASSESSEE IS AN INDIV IDUAL AND HAD FILED RETURN FOR THE YEAR UNDER CONSIDERATION ORIGINALLY ON 29.09.2010 DECLARING TOTAL INCOME AT RS. 45,52,440/-. SUBSEQUE NTLY NOTICE U/S 148 WAS ISSUED ON 29.03.2017 AND IN COMPLIANCE THEREOF THE ASSESSEE FILED THE INCOME TAX RETURN ON 03.11.2017 DECLARING THE INCOM E AT RS. 45,52,440/-. ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 9 COPY OF THE IT RETURN ALONG WITH THE COMPUTATION OF INCOME IS AVAILABLE ON PAPER BOOK PAGE NUMBER 8 TO 12. THE ASSESSMENT WAS COMPLETED U/S 148/143(3) DATED 07.12.2017 ON THE SAME INCOME. SUB SEQUENTLY THE LD PR. CIT-2 HAD ISSUED NOTICE U/S 263 OF THE ACT ON 07.0 8.2019. FOR WHICH ASSESSEE REPLIED THE NOTICE VIDE REPLY DATED 22.08. 2019. HOWEVER, THE LD PR. CIT WAS NOT CONVINCED WITH THE REPLY FILED BY T HE ASSESSEE AND THEREFORE, SET ASIDE THE ORDER PASSED BY AO DATED 07.12.2017. WE NOTICED FROM THE RECORD THAT DURING THE REASSESSME NT PROCEEDINGS THE AO HAD MADE ALL THE NECESSARY INQUIRES AND INVESTIG ATION WHICH WERE NECESSARY TO COMPLETE THE ASSESSMENT. DURING THE AS SESSMENT PROCEEDING, THE AO HAD ISSUED VARIOUS QUESTIONERS AND NOTICE U /S 143(2), 142(1) OF THE INCOME TAX ACT, 1961. NOTICE ISSUED U/S 142(1) DATED 10.11.2017 WAS REPLIED BY THE ASSESSEE ON 30.11.2017. COPY OF REPL Y DATED 30.11.2017 IS PLACED ON PAPER BOOK PAGE NO. 26. IN THE REPLY THE ASSESSEE HAD CATEGORICALLY SUBMITTED THAT HE HAD PURCHASED AGRIC ULTURE LAND ON 02.07.2007 AND 31.01.2008 FOR THE PURPOSE OF BUSINE SS, THEREAFTER SHE GOT CONVERTED THIS LAND BY RIICO FOR THE PURPOSE OF IND USTRIAL USE. SHE IMMEDIATELY JUST AFTER THE PURCHASE ON 25.07.2007 D EPOSITED CHALLAN OF RS. 40,000/- IN THE RIICO FOR CONVERSION OF LAND AN D FILED CONVERSION APPLICATION TO THE RIICO IN JULY 2007 AND DEPOSITED THE CHARGE FOR ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 10 CHANGE OF LAND USE FOR INDUSTRIAL PURPOSE IN JANUA RY 2009 AND FEBRUARY 2009 AFTER RECEIVING ORDER FROM RIICO. THE RECEIPTS ARE PLACED ON PAPER BOOK PAGE NO. 34 & 35. IMMEDIATE AFTER THE CONVERSI ON, THE ASSESSEE HAD SOLD THE CONVERTED LAND ON 08.04.2009. COPY OF PURC HASE DEED IS PLACED ON PAPER BOOK PAGE NO. 29 TO 33 AND SALE DEED OF IN DUSTRIAL LAND IS PLACED ON PAPER BOOK PAGE NO. 36 TO 43. THE PURCHASE OF LA ND WAS IN BIGHAS/HECTARES WHEREAS THE SALE DEED WAS EXECUTED FOR INDUSTRIAL PLOT MEASURING IN METERS FOR 3600 SQUARE METER AND WITH SOME TEMPORARY CONSTRUCTION AND BOUNDARY WALL. IN THIS WAY, THE W HOLE TRANSACTION WAS A TRANSACTION TO EARN PROFIT BY PURCHASING AGRICULTUR E LAND, GET IT CONVERTED INTO THE INDUSTRIAL USE, DEVELOP IT BY MAKING SOME TEMPORARY CONSTRUCTION AND BOUNDARY WALL AND SALE IT. THEREFORE, THE PRO FIT IN THIS TRANSACTION WAS A BUSINESS PROFIT AND IT WAS WRONGLY SHOWN AS C APITAL GAIN INCOME IN THE RETURN FILED ORIGINALLY ON 29.09.2010 WHICH WAS SUBSEQUENTLY CORRECTED BY THE ASSESSEE IN THE RETURN FILED ON 3 0.11.2017. WE ALSO NOTICED THAT ALL THESE FACTS WERE BROUGHT IN TO THE NOTICE OF THE AO DURING THE REASSESSMENT PROCEEDINGS VIDE LETTER DATED 29. 11.2017 WHICH IS PLACED ON PAPER BOOK AT PAGE NO. 8. THE AO ACCEPT ED THE SUBMISSION OF THE ASSESSEE AND ASSESSED IT ON RETURNED INCOME. SO , THE ASSESSMENT WAS COMPLETED AFTER MAKING COMPLETE INQUIRY REGARDING R EASONS RECORDED AND ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 11 THERE IS NO LACK OF INQUIRY OR INVESTIGATION BY THE AO ON THIS ACCOUNT. THEREFORE THE OBSERVATION IN THIS REGARD WHILE PASS ING THE ORDER U/S 263 BY LD PCIT THAT ORDER PASSED BY THE AO ON 07.12.201 7 WAS PASSED WITHOUT CONDUCTING NECESSARY INQUIRIES AND WITHOUT VERIFYING NECESSARY DETAILS WAS WITHOUT ANY BASIS OR WITHOUT ANY EVIDEN CE ON RECORD. 4.7.1 WE ARE FURTHER OF THE VIEW THAT IF ON A PARTI CULAR ISSUE THERE ARE TWO VIEWS AND ONE POSSIBLE VIEW WAS TAKEN BY THE AO TH EN IN THAT EVENTUALITY IT CANNOT BE SAID AS ERRONEOUS. AS PER THE FACTS OF PRESENT CASE, WHICH WE HAVE DISCUSSED ABOVE, THE ASSESSEE HAD PURCHASED AGRICULTURE LAND, GOT IT CONVERTED INTO THE INDUST RIAL LAND AND DEVELOPED IT AND SOLD IT. THE TRANSACTION IS OF PURELY COMMERCIA L NATURE AND THE INCOME/PROFIT EARNED OUT OF THIS TRANSACTION IS PUR ELY BUSINESS INCOME. THE ASSESSEE HAS WRONGLY SHOWN THIS INCOME UNDER TH E HEAD OF CAPITAL GAIN WHICH WAS ACTUALLY BUSINESS INCOME. SO THE AO HAS ACCEPTED THIS AS BUSINESS INCOME. THE FINDING OF THE LD PR. CIT IN T HIS REGARD MAY BE OTHER POSSIBLE VIEW AS CATEGORIZED AS CAPITAL GAIN INCOME BUT THIS DOES NOT MEAN THAT THE ORDER PASSED BY THE AO IS ERRONEOUS BECAUSE THE AO HAS TAKEN THE VIEW WHICH IS POSSIBLE ONE. ON THIS PROPO SITION, WE DRAW STRENGTH FROM THE FOLLOWING DECISIONS. ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 12 (I) MALABAR INDUSTRIAL CO LTD. VS. CIT (2000) 243 ITR 8 3 (SC) (II) VESUVIUS INDIA LTD VS. CIT (2002) 54 SOT 172 (ITAT- KOLKATA) (III) C I T-1 JAIPUR VS M/S GREEN TRIVENI DEVELOPER ON 24 OCTOBER, 2017- HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT - D.B. INCOME TAX APPEAL NO. 114 / 2015 WHEREIN IT HAS BEEN OBSERVED AS UNDER:- 18. FROM THE AFORESAID DISCUSSION, IT IS APPARENT T HAT THE EXPRESSION PREJUDICIAL TO THE INTEREST OF REVEN UE APPEARING IN SECTION 263 HAS TO BE READ IN CONJUNCTION WITH THE EXPRESSION 'ERRONEOUS' AND THAT EVERY LOSS OF REVENUE AS A CON SEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN CASE S WHERE THE ASSESSING OFFICER ADOPTS ONE OF THE COURSES PERMISS IBLE IN LAW OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME TAX OFFICER HAS TAKEN ONE VIEW, THE COMMISSIONER OF INCOME TAX CANNOT EXERCISE HIS POWERS UNDER SECTION 263 TO DIFFER WITH THE VIEW OF THE ASSESSING OFFICER EVEN IF THERE HAS BEEN A LOSS OF REVENUE. OF COURSE, IF THE ASSESSING OFFICER TAKES A VIEW WH ICH IS PATENTLY UNSUSTAINABLE IN LAW, THE COMMISSIONER OF INCOME TAX CAN EXERCISE HIS POWERS UNDER (23 OF 23) [ ITA- 114/2015] SECTION 263 WHERE A LOSS OF REVENUE RESULTS AS A CONSEQUENCE OF THE VIEW ADOPTED BY THE ASSESSING OF FICER. IT IS ALSO CLEAR THAT WHILE PASSING AN ORDER UNDER SECTION 263 , THE COMMISSIONER OF INCOME TAX HAS TO EXAMINE NOT ONLY THE ASSESSMENT ORDER, BUT THE ENTIRE RECORD OF THE PROF ITS. SINCE THE ASSESSEE HAS NO CONTROL OVER THE WAY AN ASSESSMENT ORDER IS DRAFTED AND SINCE, GENERALLY, THE ISSUES WHICH ARE ACCEPTED BY THE ASSESSING OFFICER DO NOT FIND MENTION IN THE AS SESSMENT ORDER AND ONLY THOSE POINTS ARE TAKEN NOTE OF ON WH ICH THE ASSESSEE'S EXPLANATIONS ARE REJECTED AND ADDITIONS / DISALLOWANCES ARE MADE, THE MERE ABSENCE OF THE DIS CUSSION OF THE PROVISIONS OF SECTION 80IB(13) READ WITH SECTION 80IA(9) WOULD NOT MEAN THAT THE ASSESSING OFFICER HAD NOT APPLIED HIS MIND TO THE SAID PROVISIONS. AS POINTED OUT IN KELVINATOR OF INDIA (SUPRA), WHEN A REGULAR ASSESSM ENT IS MADE UNDER SECTION 143(3) , A PRESUMPTION CAN BE RAISED THAT THE ORDER HAS BEEN PASSED UPON AN APPLICATION OF MIND. NO DOUBT, THIS PRESUMPTION IS REBUTTABLE, BUT THERE MUST BE S OME MATERIAL TO INDICATE THAT THE ASSESSING OFFICER HAD NOT APPL IED HIS MIND. ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 13 (IV) CIT V. HONDA SIEL POWER PRODUCTS LTD . (2011) 33 ITR 547 (DELHI), WHEREIN IT HAS BEEN OBSERVED AS UNDER:- 18. FROM THE AFORESAID DISCUSSION, IT IS APPARENT T HAT THE EXPRESSION PREJUDICIAL TO THE INTEREST OF REVENUE A PPEARING IN SECTION 263 HAS TO BE READ IN CONJUNCTION WITH THE EXPRESSION 'ERRONEOUS' AND THAT EVERY LOSS OF REVENUE AS A CON SEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN CASE S WHERE THE ASSESSING OFFICER ADOPTS ONE OF THE COURSES PERMISS IBLE IN LAW OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME TAX OFFICER HAS TAKEN ONE VIEW, THE COMMISSIONER OF INCOME TAX CANNOT EXERCISE HIS POWERS UNDER SECTION 263 TO DIFFER WITH THE VIEW OF THE ASSESSING OFFICER EVEN IF THERE HAS BEEN A LOSS OF REVENUE. OF COURSE, IF THE ASSESSING OFFICER TAKES A VIEW WH ICH IS PATENTLY UNSUSTAINABLE IN LAW, THE COMMISSIONER OF INCOME TAX CAN EXERCISE HIS POWERS UNDER (23 OF 23) [ ITA- 114/2015] SECTION 263 WHERE A LOSS OF REVENUE RESULTS AS A CONSEQUENCE OF THE VIEW ADOPTED BY THE ASSESSING OF FICER. IT IS ALSO CLEAR THAT WHILE PASSING AN ORDER UNDER SECTION 263 , THE COMMISSIONER OF INCOME TAX HAS TO EXAMINE NOT ONLY THE ASSESSMENT ORDER, BUT THE ENTIRE RECORD OF THE PROF ITS. SINCE THE ASSESSEE HAS NO CONTROL OVER THE WAY AN ASSESSMENT ORDER IS DRAFTED AND SINCE, GENERALLY, THE ISSUES WHICH ARE ACCEPTED BY THE ASSESSING OFFICER DO NOT FIND MENTION IN THE AS SESSMENT ORDER AND ONLY THOSE POINTS ARE TAKEN NOTE OF ON WH ICH THE ASSESSEE'S EXPLANATIONS ARE REJECTED AND ADDITIONS / DISALLOWANCES ARE MADE, THE MERE ABSENCE OF THE DIS CUSSION OF THE PROVISIONS OF SECTION 80IB(13) READ WITH SECTION 80IA(9) WOULD NOT MEAN THAT THE ASSESSING OFFICER HAD NOT APPLIED HIS MIND TO THE SAID PROVISIONS. AS POINTED OUT IN KELVINATOR OF INDIA (SUPRA), WHEN A REGULAR ASSESSM ENT IS MADE UNDER SECTION 143(3) , A PRESUMPTION CAN BE RAISED THAT THE ORDER HAS BEEN PASSED UPON AN APPLICATION OF MIND. NO DOUBT, THIS PRESUMPTION IS REBUTTABLE, BUT THERE MUST BE S OME MATERIAL TO INDICATE THAT THE ASSESSING OFFICER HAD NOT APPL IED HIS MIND EVEN OTHERWISE, THE LANGUAGE USED BY THE LEGISLATUR E IN SECTION 263 IS TO THE EFFECT THAT THE LD. PR. CIT MAY INTERFERE IN RE VISION, IF HE CONSIDERS THAT ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 14 THE ORDER PASSED BY THE ITO IS ERRONEOUS, IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IT IS QUITE CLEAR THA T TWO THINGS MUST CO-EXIST IN ORDER TO GIVE JURISDICTION TO THE LD. P R. CIT TO INTERFERE IN REVISION. THE ORDER OF THE ITO IN QUESTION MUST NOT ONLY BE ERRONEOUS BUT ALSO THE ERROR IN THE ITO ORDER MUST BE OF SUCH A K IND THAT IT CAN BE SAID OF IT THAT IT IS PREJUDICIAL TO THE INTERESTS OF THE R EVENUE. IN OTHER WORDS, MERELY BECAUSE THE OFFICERS ORDER IS ERRONEOUS, TH E LD. PR. CIT CANNOT INTERFERE. AGAIN, MERELY BECAUSE THE ORDER OF THE O FFICER IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, THEN AGAIN, THAT IS N OT ENOUGH TO CONFER JURISDICTION ON THE LD. PR. CIT TO INTERFERE IN R EVISION. THESE TWO ELEMENTS MUST CO-EXIST , THIS IS BECAUSE, THE FIRST OF THE TWO REQUIREMEN TS NAMELY, (I) THE ORDER IS ERRONEOUS AND (II) THE SAM E IS ALSO PREJUDICIAL TO THE INTERESTS OF THE REVENUE, IS NOT SATISFIED. SIM ILARLY, IF AN ORDER IS ERRONEOUS BUT NOT PREJUDICIAL TO THE INTERESTS OF T HE REVENUE, THEN ALSO THE POWER OF SUO MOTU REVISION CANNOT BE EXERCISED. ANY AND EVERY ERRONEOUS ORDER CANNOT BE THE SUBJECT-MATTER OF REV ISION BECAUSE THE SECOND REQUIREMENT ALSO MUST BE FULFILLED. THERE MU ST BE SOME PRIMA FACIE MATERIAL ON RECORD TO SHOW THAT TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED OR THAT BY THE APPLICATION OF THE RELEVANT STATUTE ON AN INCORRECT OR INCOMPLETE INTERPRETATION A LESSER TAX THAN WHAT WAS JUST HAS ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 15 BEEN IMPOSED. THE PHRASE PREJUDICIAL TO THE INTERESTS OF THE REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORD ER PASSED BY THE AO. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF AO CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVE NUE, FOR EXAMPLE, WHEN AN ITO ADOPTED ONE OF THE COURSES PERMISSIBLE IN LA W AND IT HAS RESULTED IN LOSS OF REVENUE; OR WHERE TWO VIEWS ARE POSSIBLE AND THE ITO HAS TAKEN ONE VIEW WITH WHICH THE LD. PR. CIT DOES NOT AGREE , IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE ITO IS UNSUSTAINABLE IN LAW. AN ORDER OF ASSESSMENT PASSED BY THE ITO WITHOUT MAKING NECESSARY ENQUIRIE S ON CERTAIN IMPORTANT POINTS CONNECTED WITH THE ASSESSMENT WOUL D BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE, WHEN T HE ITO IS EXPECTED TO MAKE AN ENQUIRY OF A PARTICULAR ITEM OF INCOME AND HE DOES NOT MAKE AN ENQUIRY AS EXPECTED, THAT WOULD BE A GROUND FOR THE LD. PR. CIT TO INTERFERE WITH THE ORDER PASSED BY THE ITO SINCE SU CH AN ORDER PASSED BY THE ITO IS ERRONEOUS AND PREJUDICIAL TO THE INTERES TS OF REVENUE, BUT THE ITO HAD MADE ENQUIRIES IN REGARD TO THE NATURE OF T HE EXPENDITURE INCURRED BY THE ASSESSEE WHO HAD GIVEN DETAILED EXP LANATION IN THAT REGARD BY A FETTER IN WRITING AND ALL THESE ARE PART OF TH E RECORD OF THE CASE AND THE CLAIM WAS ALLOWED BY THE ITO ON BEING SATISFIED WITH THE EXPLANATION ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 16 OF THE ASSESSEE SUCH, DECISION OF THE ITO CANNOT BE HELD TO BE ERRONEOUS SIMPLY BECAUSE IN HIS ORDER HE DID NOT MAKE ELABORA TE DISCUSSION IN THAT REGARD. IT IS A SETTLED PRINCIPLE OF LAW THAT IN OR DER TO INVOKE, THE PROVISIONS OF SECTION 263 OF THE I.T.ACT, 1961, THE LD. PR. CIT SHALL ASCERTAIN FROM THE RECORDS THAT TWIN CONDITIONS EMB EDDED IN SAID PROVISION I.E, THE ORDER OF THE AO IS ERRONEOUS A ND IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE ARE TO BE SATISFIED. IN LIG HT OF ABOVE LEGAL POSITION, IF WE EXAMINE THE FACTS OF THE PRESENT CASE, IT CAN BE SAID THAT IT IS ONLY CLAUSE (A) AND (B) ARE RELEVANT AND OTHER TWO CLAUS ES ARE NOT RELEVANT TO DECIDE, WHETHER THE ORDER PASSED BY THE AO IS ERRON EOUS, IN LIGHT OF NEWLY INSERTED EXPLANATION (2). CLAUSE (A) DEALS WI TH CIRCUMSTANCES WHERE THE ORDER HAS BEEN PASSED WITHOUT MAKING ENQU IRIES OR VERIFICATION, WHICH SHOULD HAVE BEEN MADE. IN THIS CASE, FROM THE FACTS, IT CAN BE SEEN THAT THERE WAS AN ENQUIRY BY THE AO IN RESPECT OF ALL ISSUES AND THE ASSESEE HAD ALSO FURNISHED A DETAILED REPLY. THEREF ORE, WE CAN SAY THAT THIS CLAUSE IS NOT APPLICABLE IN THIS CASE. CLAUSE (B) OF THE EXPLANATION DEALS WITH CIRCUMSTANCES, WHERE THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT ENQUIRING INTO THE CLAIM. IN THIS CASE, FRO M THE FACTS, IT CAN BE SEEN THAT THE RELIEF (NON APPLICATION OF PROVISIONS OF SECTION 50C OF THE INCOME-TAX ACT) HAS BEEN ALLOWED ONLY AFTER MAKING ENQUIRIES. THEREFORE, ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 17 THIS CLAUSE IS ALSO NOT APPLICABLE IN THIS CASE. TH EREFORE, IT IS PROVED THAT THE CONDITIONS TO INVOKE THE POWERS U/S 263 OF THE ACT ARE NOT SATISFIED AND HENCE, THE LD. PR. CIT HAD ERRED IN INVOKING T HE SCOPE OF PROVISIONS OF 263 OF THE I.T.ACT, 1961. FURTHER, ASSUMING FOR A MOMENT, BUT NOT ACCEPTING IN ORDER TO INVOKE SECTION 263 OF THE AC T , THE OTHER CONDITIONS, WHICH IS TO BE SATISFIED IS THAT THE ORDER SHOULD B E PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAUSE IN RESPECT OF CATEG ORIZATION OF INCOME UNDER THE HEAD BUSINESS INCOME VERSUS CAPITAL GAIN INCOME. THE NATURE OF TRANSACTION WAS VERY CLEAR THAT IT WAS A COMMERCIAL TRANSACTION AND IT DID NOT FALL UNDER THE CATEGORY OF CAPITAL GAIN INCOME. THEREFORE, INVOCATION OF JURISDICTION U/S 263 ON THESE ISSUES ARE ALSO IN CORRECT. 4.7.2 THE FIRST OBJECTION FOR WHICH THE ORDER WAS P ASSED BY THE LD PR. CIT THAT THE ASSESSEE HAS SOLD THE LAND OF SAME AREA WH ICH WAS PURCHASED AND IN THE ORIGINAL RETURN FILED THE TRANSACTION FOR TH E LAND SALE WAS SHOWN UNDER THE HEAD CAPITAL GAIN WHEREAS IN THE RETURN F ILED IN REOPENING PROCEEDINGS IT WAS SHOWN AS BUSINESS INCOME AND THE SAME WAS ACCEPTED BY THE AO AND HE HAD NOT EXAMINED THIS ISSUE. 4.7.3 THE FINDING OF THE LD. PR. CIT ARE NOT CORREC T BECAUSE THE ASSESSEE HAS PURCHASED AGRICULTURE LAND MEASURING 36/68 PART OF 0.86 HECTARE ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 18 WHEREAS SHE SOLD THE 3600 SQUARE METER INDUSTRIAL P LOT. SO THE LAND SOLD AND LAND PURCHASED WAS NOT SAME AND THE FINDING IN THE ORDER U/S 263 IS NOT CORRECT. THE IMPORTANT FACT WHICH HAS BEEN IGNO RED BY THE LD. PCIT IS THAT IN COMPUTATION OF INCOME FILED WITH THE ORIGIN AL RETURN THE ASSESSEE HAS MADE A MISTAKE THAT HE HAS SHOWN THE LAND TRANS ACTIONS UNDER THE HEAD CAPITAL GAIN INCOME WHEREAS THE TRANSACTION WA S PURELY A BUSINESS TRANSACTION. THE OBJECT BEHIND THE PURCHASE OF LAND IS TO CONVERT IT INTO THE INDUSTRIAL LAND AND AFTER DEVELOPMENT SALE IT O N GOOD PRICE FOR EARNING PROFIT. THE ASSESSEE HAS PURCHASED AGRICULTURE LAND ON 30.01.2008. COPY OF PURCHASE DEED IS AVAILABLE ON PAPER BOOK PAGE NO . 28 TO 33. SUBSEQUENTLY SHE GOT IT CONVERTED INTO THE INDUSTRI AL LAND AND DEPOSITED RS. 72,000/- AND RS. 21,600/- AS CONVERSION CHARGES TO RIICO AND DISTRICT COLLECTOR JAIPUR. COPY OF RECEIPTS OF PAYM ENT OF CONVERSION CHARGES IS PLACED ON PAPER BOOK PAGE NO. 34 TO 35. COPY OF SALE DEED IS AVAILABLE IS ON PAGE NO. 36 TO 43. IN THE SALE DEED ON PAGE 38 OF THE PAPER BOOK ALL THE DETAILS OF CONVERSION ARE DULY MENTION ED AND THE SALE DEED WAS EXECUTED FOR INDUSTRIAL LAND. THE NATURE OF TRA NSACTION IS ALSO BUSINESS TRANSACTION AS THE ASSESSEE PURCHASED THE LAND ON 30.01.2008 AND HE IMMEDIATELY FILED THE APPLICATION FOR CONVERSION AND HAS TAKEN ADVANCE FROM SELLER JUST AFTER SEVEN MONTHS OF PURC HASE I.E. ON ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 19 31.07.2008 HE HAS TAKEN ADVANCE OF RS. 10,00,000/- WHICH IS MENTIONED IN SALE DEED ON PAGE NO. 39 OF THE PAPER BOOK AND I MMEDIATELY AFTER CONVERSION THE ASSESSEE EXECUTED THE SALE DEED OF I NDUSTRIAL LAND. SO THE TRANSACTION OF PURCHASE AND SALE AND CONVERSION IS PURELY A BUSINESS TRANSACTION AND THE ASSESSEE HAS WRONGLY SHOWN IT A S CAPITAL GAIN WHICH HAS BEEN CORRECTED VIDE FILING THE REVISED RETURN C OPY OF WHICH IS PLACED ON PAPER BOOK PAGE NO. 9 TO 12. BY FILING RETURN IN RESPONSE TO NOTICE U/S 148 THE ASSESSEE HAS CORRECTED HER MISTAKE AND SHOW N THIS TRANSACTION IN BUSINESS INCOME. THE AO HAS EXAMINED ALL THE ISSU ES REGARDING SALE OF LANDS. ALL THE DETAILS WERE SUBMITTED BEFORE THE LE ARNED AO. THE ASSESSMENT ORDER PASSED BY AO WAS NEITHER ERRONEOUS , NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. REVISION UNDER SECTION 263 BY PCIT WAS NOT JUSTIFIED AS ALL THE FOUR ISSUES QUESTIONED BY PCIT WERE THOROUGHLY EXAMINED BY AO DURING THE ASSESSMENT PROCEEDINGS, A ND AFTER CONSIDERING RELEVANT FACTS AND EXPLANATIONS FURNISH ED BY ASSESSEE HAD CHOSEN TO ACCEPT THE CLAIM OF THE ASSESSEE AND HENC E, THE SAME COULD NOT BE TERMED AS NON CONSIDERATION OF ISSUES OR AO HAD FAILED TO CARRY OUT REQUIRED ENQUIRIES, WHICH OUGHT TO HAVE BEEN CARRIE D OUT IN ACCORDANCE WITH LAW. THUS THE ORDER PASSED BY THE LEARNED PCIT DESERVES TO BE QUASHED. ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 20 4.7.4 THE SECOND OBJECTION OF THE LD PCIT WAS THA T THE AO DID NOT VERIFY DETAILS IN RESPECT OF BROKERAGE AND COMMISSION PAYM ENT OF RS. 150800/-. DURING THE REASSESSMENT PROCEEDINGS THE ASSESSEE HA S SUBMITTED DETAILS OF BROKERAGE PAYMENT THE VOUCHERS AND OTHER DETAILS AR E PLACED ON PAPER BOOK PAGE NO. 64 & 65 AND TDS WAS ALSO DEDUCTED ON BROKERAGE PAYMENT TREATING THE TRANSACTION AS BUSINESS TRANSA CTION. THEREFORE THE EXPENDITURE INCURRED ON BROKERAGE AND COMMISSION WA S FULLY VERIFIABLE AND THE DETAIL WAS SUBMITTED DURING THE REASSESSMEN T PROCEEDINGS. THEREFORE THIS OBJECTION WAS ALSO NOT SUSTAINABLE. 4.7.5 THE THIRD OBJECTION OF THE LD PCIT WAS THAT I NTEREST RECEIVED ARE SHOWN AS RS. 5,28,165/- AS AGAINST THE INTEREST REC EIVED OF RS. 3,30,030/-. THE OTHER INCOME SHOWN RS. 7,42,196/- AS AGAINST TH E RS. 1,63,925/-. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAS SUBMITTED DETAILS OF INTEREST RECEIVED AND OTHER INCOMES WHICH ARE AS UN DER: - PARTICULARS INDIVIDUAL CAPACITY ENTERED IN THE BOOKS OF THE FIRM DIFFERENCE REASON INTEREST RECEIVED 528165 331030 197135 RS. 331030/- ARE SHOWN IN CREDIT OF P&L A/C OF THE FIRM OTHER INCOME 163925 742196 578271 THE INCOME OF RS. 163925/- IS NOT SHOWN IN GUPTA TRADING CO AND DIRECTLY SHOWN IN INDIVIDUAL COMPUTATION. ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 21 THE REASON FOR THE DIFFERENCE WAS DULY EXPLAINED AN D THE LEARNED AO HAS VERIFIED THE SAME. THEREFORE AGAIN THIS OBJECTION W AS NOT ACCEPTABLE FOR INVOKING THE PROVISIONS OF SECTION 263 OF THE INCOM E TAX ACT, 1961. 4.7.6 THE LAST OBJECTION OF THE LEARNED PCIT WAS TH AT PROPRIETORS CAPITAL IS SHOWN AT RS. 1,23,40,013/- AGAINST THE C APITAL SHOWN IN EARLIER RETURN AT RS. 26,21,641/-. IN THIS REGARD IT WAS CL ARIFIED THAT THE ASSESSEE WAS MAINTAINING BOOKS OF ACCOUNT FOR HIS BUSINESS O F M/S GUPTA ENGINEERING WORKS SEPARATELY AND INDIVIDUAL BOOKS A RE KEPT SEPARATELY. THE INDIVIDUAL CAPITAL OF THE ASSESSEE WAS RS. 1,23 ,40,013/- OUT OF WHICH THE ASSESSEE HAS INVESTED CAPITAL OF RS. 26,21,641/ - IN M/S GUPTA ENGINEERING WORKS. SO THE CAPITAL IN INDIVIDUAL CAP ACITY WAS RS. 1,23,40,000/- AND CAPITAL OF M/S GUPTA ENGINEERING WAS RS. 26,21,641/-. COPY OF BALANCE SHEET, PROFIT & LOSS A/C AND OTHER RELEVANT DOCUMENTS ARE PLACED ON PAPER BOOK PAGE NO. 71 TO 82. THEREFORE THE DIFFERENCE IN THE FIGURES OF OTHER INCOME AND INTEREST INCOME WAS DULY EXPLAINED AND THE OBJECTION IN THIS REGARD IS ALSO NOT SUSTAINABL E. 4.7.7 IT IS ALSO NOTEWORTHY TO MENTION THAT THE CA SE LAWS RELIED ON (SUPRA) BY THE REVENUE IN THE PRESENT FACTS AND CIR CUMSTANCES OF THE CASE ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 22 ARE NOT APPLICABLE. HOWEVER, TO THIS EFFECT, THE F OLLOWING CASE RELIED ON SUPPORT THE CASE OF THE ASSESSEE. (I) INDIAN SHAVING PRODUCTS LTD VS. BIFR (1996) 218 ITR 140 (SC) (II) CIT VS. LAKSHMI MACHINE WORKS LTD (2020) 422 ITR 23 5 (MAD) (III) CIT VS. MADHURA COATS LTD (2020) 422 ITR 390 (MAD) IN VIEW OF THE ABOVE FACTS, CIRCUMSTANCES, CASE LAW S RELIED ON (SUPRA), WE FIND THAT IT IS NOT A FIT CASE FOR PASSING THE ORDE R U/S 263 OF THE ACT BY THE LD. PR.CIT . THE ORDER PASSED U/S 143(3) R.W.S. 14 8 OF THE ACT BY THE AO WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTERE ST OF THE REVENUE. THUS THE ORDER PASSED BY THE AO IS CONFIRMED AND THE MAI N GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. 5.0 AS REGARDS THE REVISED GROUNDS RAISED BY THE AS SESSEE (SUPRA), WE FIND THAT IT IS NOT REQUIRED TO ADJUDICATE UPON AS THE MAIN GROUNDS NO. 1 TO 4 HAS BEEN DEALT WITH BY US DECIDING THE SAME IN FA VOUR OF THE ASSESSEE. THUS THE REVISED GROUNDS RAISED BY THE ASSESSEE ARE INFRUCTUOUS. HENCE, THE SAME ARE DISMISSED. ITA NO. 261/JP/2020 SMT. SANGEETA AGARWAL VS PR.CIT, CIRCLE2, ,JAIPUR 23 6.0 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17/09/202 0. SD/- SD/- ,U-DS-LSUH LANHI XKSLKBZ (N.K. SAINI) (SANDEEP GOSAIN) MIK/;{K@ VICE PRESIDENT U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 17 /09/2020. *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT - SMT. SANGEETA AGARWAL, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT-THE PR. CIT, CIRCLEL-2, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR . 5. XKMZ QKBZY@ GUARD FILE {ITA NO. 261/JP/2020} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSTT. REGISTRAR