Arvind Sangoi, Raipur V. Dy. Commissioner of Income Tax, Circle-1(1), Raipur

ITA 33/RPR/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4884 (ITAT-RAIPUR)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Appeal Filed On: 19-05-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R.K. SINGH
• Keywords: Capital asset; Business income; Revision of order; Competent authority; Set aside; Capital Gains
• Section: 145; 263; 144; 143(3)

Judgement Text

ITA NOS.34 & 33/RPR/2021 A.YS. 2016-17 PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER A ND SHRI N.K. CHOUDHRY, JUDICIAL MEMBER ITA NO.34/RPR/2021 ASSESSMENT YEAR: 2016-17 SHRI DILIP SANGOI, VS. DCIT, CIRCLE 1(1), SAMTA COLONY RAIPUR. RAMSAGAR PARA RAIPUR (CG) [PAN AJGPS 3531 D] ITA NO.33/RPR/2021 ASSESSMENT YEAR: 2016-17 SHRI ARVIND SANGOI, VS. DCIT, CIRCLE 1(1), GANJPARA, RAIPUR. RAMSAGAR PARA RAIPUR (CG) [PAN AUCPS 4150 P] (APPELLANTS) (RESPONDENT) APPELLANTS BY : SHRI AMIT MALOO JAIN, C.A. RESPONDENT BY : SHRI R.K. SINGH, CIT D.R. DATE OF HEARING : 30.07.2021 DATE OF PRONOUNCEMENT : 29.09.2021 O R D E R PER PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER : ITA NO.34/RPR/2021 A.Y. 2016-17 SHRI DILIP SANG OI THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE REVISIONAL ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX (PCIT IN SHORT), RAIPUR COMMUNICATED TO ASSESSEE ON 26.03.2021 PASSE D UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 (THE ACT IN SHORT) WHEREBY THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER (A.O.) DATED 24.10.2018 UNDER SEC TION 143(3) OF THE ACT CONCERNING ASSESSMENT YEAR (A.Y.) 2016-17 WAS SOUGHT TO BE SET ASIDE FOR REFRAMING THE ASSESSMENT IN TERMS OF SUPERVISORY JURISDICTION. ITA NOS.34 & 33/RPR/2021 A.YS. 2016-17 PAGE 2 OF 10 2. AS PER ITS GROUNDS OF APPEAL, THE ASSESSEE HAS C HALLENGED THE REVISIONAL ACTION OF THE PCIT WHEREBY THE A.O. WAS DIRECTED TO PASS T HE ASSESSMENT ORDER DENOVO AFTER MAKING ENQUIRIES ON THE POINTS SET OUT IN THE NOTIC E WHICH ARE STATED TO BE ALREADY EXAMINED AND CONSIDERED DURING THE ORIGINAL ASSESSM ENT PROCEEDINGS CONCERNING A.Y. 2016-17. THE ASSESSEE HAS CHALLENGED THE ASSU MPTION OF JURISDICTION BY THE PCIT UNDER SECTION 263 OF THE ACT ON THE GROUND THA T THE ASSESSMENT ORDER UNDER REVISION IS NEITHER ERRONEOUS NOR PREJUDICIAL TO TH E INTEREST OF THE REVENUE. 3. THE BACKGROUND FACTS LEADING TO REVISION ARE THA T THE RETURN OF INCOME OF THE ASSESSEE WAS SUBJECTED TO ASSESSMENT PROCEEDINGS FO R THE A.Y. 2016-17 IN QUESTION AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143( 3) OF THE ACT DATED 24.10.2018. THE PCIT CALLED FOR THE EXAMINATION OF ASSESSMENT R ECORDS AND WAS OF THE OPINION THAT THE ASSESSMENT ORDER SO PASSED IS ERRONEOUS IN SO FAR IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE FOR THE REASONS THAT THE A. O. HAS FAILED TO MAKE PROPER ENQUIRIES IN RESPECT OF NATURE & CHARACTER OF INCOM E ARISING ON CO-OWNERSHIP SALE OF LAND. THE PCIT OPINED THAT THE FACTS IN THE CASE O F THE ASSESSEE SUGGESTS THAT THE PROFIT ARISING ON SALE OF LAND IN QUESTION HAS GIVE N RISE TO BUSINESS INCOME AS AGAINST THE CAPITAL GAINS CLAIMED BY THE ASSESSEE. THE P CIT ACCORDINGLY ISSUED SHOW CAUSE NOTICE UNDER SECTION 263 OF THE ACT AS TO WHY THE A SSESSMENT ORDER SO PASSED SHOULD NOT BE SET ASIDE OR MODIFIED TO WITHDRAW THE CONCES SIONAL TAX RATE AVAILED BY THE ASSESSEE BY CHARACTERISING THE SURPLUS ON SALE OF L AND AS CAPITAL GAINS IN DEPARTURE WITH ITS TRUE NATURE AS BUSINESS INCOME. 4. IT WILL BE APT TO REPRODUCE THE SHOW CAUSE NOTIC E FOR EASY REFERENCE:- NOTICE FOR THE HEARING M/S/MR/MS SUBJECT : NOTICE FOR HEARING IN RESPECT OF REVISION PROCEED INGS U/S 263 OF THE THE INCOME TAX ACT, 1961 ASSESSMENT YEAR 2016-17 . IN THIS REGARD, A HEARING IN THE MATTER IS FIXED ON 16/03/2021 AT 11:30 AM . YOU ARE REQUESTED TO ATTEND IN PERSON OR THROUGH AN AUTHORIZED REPRESENTATIVE TO SUBMIT YOUR REPRESENTATION, IF AN Y ALONG WITH SUPPORTING DOCUMENTS/INFORMATION IN SUPPORT OF THE ISSUES INVO LVED (AS MENTIONED BELOW). IF YOU WISH THAT THE REVISION PROCEEDING BE CONCLUD ED ON THE BASIS OF YOUR ITA NOS.34 & 33/RPR/2021 A.YS. 2016-17 PAGE 3 OF 10 WRITTEN SUBMISSIONS/REPRESENTATIONS FILED IN THIS O FFICE, ON OR BEFORE THE SAID DUE DATE, THEN YOUR PERSONAL ATTENDANCE IS NOT REQUIRED . YOU ALSO HAVE THE OPTION TO FILE YOUR SUBMISSION FROM THE E-FILING PORTAL US ING THE LINK: INCOMETAXINDIAEFILING.GOV.IN ON EXAMINATION OF YOUR INCOME TAX RECORDS FOR THE ABOVE ASSESSMENT YEAR, I FIND THAT THE ORDER PASSED U/S 143(3) R.W.S 147 ON 24.10.2018 OF THE INCOME TAX ACT, 1961 IS ERRONEOUS IN SO FAR AS IT I S PREJUDICIAL TO THE INTEREST OF REVENUE IN THE FOLLOWING MANNER: - THE ORDER IN THE AFORESAID CASE IS ERRONEOUS SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE ON THE FOLLOWING GROUNDS: IN THIS CASE RETURN OF INCOME WAS FILED BY THE ASSE SSEE FOR THE YEAR UNDER CONSIDERATION ON 10.09.2016 DECLARING TO TAL INCOME OF RS. 22,18,460/- FOR AY 16-17. THE CASE WAS SELECTED FOR LIMITED SCRUTINY THROUGH CASS AND ACCORDINGLY, ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED ON 24.10.2018. IN THIS CASE ON PERUSAL OF THE ASSESSMENT FOLDER FO LLOWING ISSUES CAME TO NOTICE:- ON PERUSAL OF CASE RECORD, IT WAS SEEN THAT THE ASS ESSEE HAS BEEN SOLELY WORKING WITH THE INTENTION TO ACQUIRE LAND W ITH ONE CO-OWNER AND THEN SELL IT AT PROFIT. THEREFORE, THE INCOME WAS TO BE HELD AS ADVENTURE IN THE NATURE OF TRADE AND PROFIT AND GAINS THERE FROM WAS LIABLE FO R TAXATION AS BUSINESS INCOME WHETHER FROM SALE OF AGRICULTURE LAND OR NON-AGRICU LTURE LAND. IT IS APPARENT FROM THE RECORD THAT THE INTENTION O F THE ASSESSEE WAS NOT TO PERFORM ANY AGRICULTURAL ACTIVITY ON THE LAND AN D INVESTMENT IN AGRICULTURE LAND. THE INTENT AND PURPOSE FOR PURCHASING THE LAN D, AFTER CONVERSION OF LAND USE FOR RESIDENTIAL PURPOSE AND SELLING IT OF SUCH LAND CAN BY NO MEANS QUALIFY FOR LTCG. HERE IT IS WORTHWHILE TO MENTION AND REPRODUCED SEC TION 2(13) OF IT ACT : WHICH STATES AS UNDER: BUSINESS INCLUDES ANY-TRADE, COMMERCE OR MANUFACTUR ING OR ANY ADVENTURE OR CONCERN IN THE NATURE OF TRADE, COMMER CE OR MANUFACTURE. THE ISSUE WAS TO WHAT SHOULD CONSTITUTE AS ADVENTURE IN THE NATURE OF TRADE, HAS BEEN CONSIDERED AND EXAMINED BY VARIOUS HIGHER COUR TS. HONBLE SUPREME COURT IN ITS JUDGMENT IN THE CASE O F CIT VS. M/S SUTJEJ COTTON MILLS SUPPLY AGENCY LT. 100 ITR706 HAS HELD THAT IF THE DOMINANT INTENTION WAS TO CARRY ON AN ADVENTURE IN THE NATUR E OF BUSINESS, THE PROFIT CAN BE TAXED. SINCE IT IS PROVED THAT THE INTENTION OF THE ASSESSEE WAS TO EARN PROFIT ITA NOS.34 & 33/RPR/2021 A.YS. 2016-17 PAGE 4 OF 10 FROM TRANSACTION OF PURCHASE AND SALE OF AGRICULTUR E LAND, PROFIT EARNED CAN BE TAXED FROM SALE OF SUCH AGRICULTURAL LAND AS BUSINE SS INCOME. FURTHER THE HONBLE SUPREME COURT IN THE CASE OF G. VENKAT SWANI/NAIDU & CO. VS. CIT 35 ITR594 HAS HELD THAT I N CASES WHERE PURCHASES HAVE BEEN MADE SOLELY AN EXCLUSIVELY WITH INTENTION TO RESELL AT A PROFIT AND PURCHASER HAS NO INTENTION OF HOLDING PROPERTY FOR HIMSELF OR OTHERWISE ENJOYING OR USING IT, PRESENCE OF SUCH AN INTENTION IS A REL EVANT FACTOR AND UNLESS IT IS OBSTRUCTED BY PRESENCE OF OTHER FACTORS IS COULD RA ISE A STRONG PRESUMPTION THAT THE TRANSACTION IS AN ADVENTURE IN THE NATURE OF TR ADE. AUDIT EXAMINATION REVEALED THAT THE ASSESSEE HAD PU RCHASED THE LAND WITHIN LIMIT OF MUNICIPALITY OF RAIPUR SITUATED AT VILLAGE MOVA, ADMEASURING AREA 36000 SQ. FT. WITH ANOTHER CO-OWNER SHRI ARVIND SAN GOION 26.03.2007. FURTHER, IT WAS OBSERVED THAT THE SAID LAND WAS DIVERTED FOR RESIDENTIAL USE BY THE COMPETENT AUTHORITY ON 16.01.2015. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE AND CO-OWNER HAD SOLD THE LAND 7983 SQ. FT . OUT OF 36000 SQFT. FOR RS. 1,18,74,959/- TO THE FOUR PERSON. THE ASSESSEE HAD DISCLOSED HIS SHARE FROM SALE OF LAND OF RS. 5,93,74,780/- AND WORKED O UT LTCG FROM SALE OF LAND FOR RS. 11,78,210/- AFTER DEDUCTING INDEXATION COAS T OF LAND AND ADJUSTMENT OF LONG TERM CAPITAL LOSS OF RS. 27,49,277/- ON SALE O F PAGE 2 OF 4 AJGPS3531D- DILIP SANGOI A.Y. 2016-17 ITBA/REV/F/REV1/2020-21/1 031409603(1) UNLISTED SHARES AND SECURITIES. SINCE, THE ASSESSEE ACQUIRED LAND WITH A VIEW TO SELLING IT LATER RESULTING IN PROFIT AND THE ACTIVI TY CAN ONLY BE DESCRIBED AS BUSINESS VENTURE. THE ASSESSEE HAD CALCULATED LTCG FROM SALE OF LAND RS. 42,96,423/- AND CLAIMED INDEXATION COST WAS NOT IN ORDER. THE PROFIT FROM SALE OF LAND FOR RS. 52,92,123/- (5937480 645357) WITH OUT CONSIDERING TRANSFER EXPENSES AND BENEFIT OF INDEXATION OF ACQUISITION O F COST WAS REQUIRED TO BE TAXED AS BUSINESS INCOME WHICH WAS NOT FOUND SO. IN VIEW OF PROVISIONS OF SECTION 74 OF IT ACT THE A SSESSEE HAD CLAIMED AND ALLOWED SET-OFF LONG TERM CAPITAL LOSS FROM SAL E OF PROPERTY WHICH WAS REQUIRED TO BE TREATED AS BUSINESS INCOME ALSO NOT IN ORDER. SINCE THE ABOVE FACTS AND ENQUIRY IN RELATION TO TH E ABOVE DISCUSSED ISSUES REMAINED TO BE DONE BY THE AO DURI NG THE COURSE OF ASSESSMENT PROCEEDING AND THE AO FAILED TO TAX PROF IT FROM SALE OF LAND TREATING AS BUSINESS INCOME, THE ORDER PASSED U/S 1 43(3) OF IT ACT FOR AY 2016-17 ON 24.10.2018 IS PREJUDICIAL TO THE INTE REST OF REVENUE WHICH RESULTED IN UNDER ASSESSMENT. AS THE ABOVE ASPECT REGARDING NON-DISCLOSURE OF INV ESTMENT IN SHARES IN THE BOOKS OF ACCOUNTS, REMAINED TO BE EXA MINE DURING THE COURSE OF ASSESSMENT PROCEEDING, THE ASSESSMENT ORD ER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, THE SAM E NEEDS DETAILED VERIFICATION ENQUIRY. ITA NOS.34 & 33/RPR/2021 A.YS. 2016-17 PAGE 5 OF 10 3. IN VIEW OF THESE FACTS, THERE IS NO DOCUMENTARY EVIDENCE TO SATISFACTORILY EXPLAIN THE NATURE AND SOURCE OF CASH TRANSACTION/C ONTRACT RECEIPTS. CONSEQUENTLY, THERE IS NO PROPER VERIFICATION MADE BY THE AO IN THIS CASE. 4. HENCE, THERE IS NO APPLICATION OF MIND ON THE P ART OF THE AO TO CORRECTLY TAX THE INCOME OF THE ASSESSEE IN THE RETURN OF INC OME AND THEREFORE, THE ASSESSMENT ORDER PASSED U/S 144 OF THE ACT IS ERRON EOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. THEREFORE, IN EXERCISE OF THE POWERS CONFERRED ON M E BY SECTION 263 OF THE I.T. ACT, 1961, I PROPOSE TO SUITABLE REVISE TH E ORDER U/S 263, WHICH MAY INCLUDE SETTING ASIDE THE ORDER AS SUCH. ACCORDINGL Y, AN OPPORTUNITY IS BEING EXTENDED TO EXPLAIN YOUR CASE ALONG WITH DETAILS, D OCUMENTS AND NECESSARY EVIDENCES. AN ABSENCE OF ANY SUBMISSION OR REPLY SH ALL LEAD TO THE CONCLUSION THAT YOU HAVE NO OBJECTION FOR THE PROPOSED ACTION AND THE PROCEEDINGS SHALL BE FINALIZED ACCORDINGLY. YOUR SUBMISSION/REPLY MAY KINDLY BE SENT THROUGH TH E E-MAIL ON OR BEFORE 16/03/2021. IF YOU WISH TO APPEAR PERSONALLY OR THROUGH YOUR AU THORIZED REPRESENTATIVE, PERSONAL HEARING MAY KINDLY BE AVAI LED ON 16/03/2021 AT 11:30 PM IN THE OFFICE OF PCIT-1, CENTRAL REVENUE BUILDIN G, CIVIL LINES, RAIPUR. 5. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESS EE FILED A DETAILED REPLY DATED 19.03.2021 SEEKING TO DEMONSTRATE THAT THE SURPLUS ARISING ON SALE OF LAND HAS BEEN RIGHTLY CHARACTERISED AS CAPITAL GAINS AND THE A.O. MADE NECESSARY ENQUIRIES IN THIS REGARD WHILE ACCEPTING THE STAND OF THE ASSESSEE. THE PCIT, HOWEVER, ALLEGED THAT THE A.O. HAS NOT CONDUCTED PROPER ENQUIRY REGARDING GENUINENESS OF THE CONTENTIONS PUT FORTH BY THE ASSESSEE. THE A.O. WAS ACCORDINGL Y DIRECTED TO MAKE ADEQUATE ENQUIRIES WITH REGARD TO THE NATURE OF TRANSACTION IN THE LIGHT OF PROVISIONS OF SECTION 2(13) OF THE ACT AND CONSEQUENT SET OFF OF LOSS. T HE ASSESSMENT ORDER WAS ACCORDINGLY SET ASIDE AND REMANDED BACK TO THE FILE OF THE A.O. FOR FRESH ADJUDICATION OF THE ISSUE BY INVOKING THE REVISIONAL POWER UNDER SECTION 263 OF THE ACT. 6. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THE IMPUGNED ASSESSMENT ORDER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE I NTEREST OF THE REVENUE. SEVERAL CONTENTIONS WERE RAISED IN THIS REGARD:- ITA NOS.34 & 33/RPR/2021 A.YS. 2016-17 PAGE 6 OF 10 I) THE PCIT HAS WRONGLY ASSUMED THAT THE LAND PURCH ASED BY THE ASSESSEE ALONG WITH THE OTHER CO-OWNER SHRI ARVIND SANGOI (ITA NO. 33/RPR/2021) IS 36000 SQ. FT., WHEREAS, THE LAND IS ONLY 13000 SQ. FT., OUT O F WHICH, THE SHARE OF EACH CO- OWNER IS 6500 SQ. FT. THE SIZE OF LAND PARCEL HAS SOMEWHAT WRONGLY INFLUENCED THE MIND OF PCIT. II) THE ASSESSEE WAS SUBJECTED TO LIMITED SCRUTINY AND ONE OF THE REASONS WAS TO VERIFY WHETHER THE CAPITAL GAINS/LOSS ON SALE OF PR OPERTY HAS BEEN CORRECTLY SHOWN IN THE RETURN OF INCOME. HENCE, A NORMAL PRE SUMPTION WOULD ARISE THAT THE POINTS SPECIFIED IN NOTICE HAS BEEN EXAMINED. III) THE QUERY LETTER DATED 14.08.2018 ISSUED IN TH E COURSE OF THE ASSESSMENT PROCEEDINGS WOULD SHOW THAT THE A.O. HAS SPECIFICAL LY CALLED THE DOCUMENTS TO VERIFY THE CAPITAL GAINS AND HAS ALSO REFERRED TO T HE SUBMISSIONS MADE BY THE ASSESSEE AND THE DOCUMENTS FILED ALONG WITH THE SUB MISSIONS DATED 13.09.2018. IV) THE A.O. HAS COMPLETED THE ASSESSMENT PROCEEDIN GS AFTER VERIFICATION OF DOCUMENTS AND THE ASSESSMENT WAS COMPLETED BY ADOPT ING ONE OF THE POSSIBLE AND PLAUSIBLE VIEW TOWARDS NATURE & CHARACTER OF IN COME WHICH IS, TYPICALLY, A DEBATABLE ISSUE AND IS SUBJECT MATTER OF LITIGATION IN MANY CASES. THUS, THE OPINION FORMED BY THE A.O. ON THE CHARACTER OF INCO ME I.E. WHETHER TAXABLE UNDER BUSINESS INCOME UNDER THE HEAD CAPITAL GAI NS IS A MATTER OF SUBJECTIVE OPINION HAVING REGARD TO THE FACTS OF A GIVEN CASE. THE PCIT UNDER SECTION 263 OF THE ACT COULD NOT HAVE INVOKED REVISIONAL POWERS TO SUBSTITUTE HIS OPINION ON DEBATABLE ISSUE WITHOUT SHOWING AS TO HOW THE A.O. WAS IN LEGAL ERROR IN ADOPTING ONE OF THE PLAUSIBLE VIEWS. THE DECISION OF THE HONBLE SUPREME COURT IN CIT VS. GREEN WORLD CORPORATION (2009) 77 CCH 449 WAS RELIED UPON. A REFERENCE WAS ALSO MADE TO THE DECISION OF THE TR IBUNAL IN THE CASE OF MINAL NAYAN SHAH VS. PCIT (2019) 180 ITD 149 (AHD.), TORR ENT PHARMACEUTICALS VS. DCIT (2018) 173 ITD 130 FOR THE PROPOSITION THAT A PLAUSIBLE VIEW TAKEN IN EXERCISE OF QUASI JUDICIAL FUNCTION CANNOT BE DISLO DGED IN A LIGHT HEARTED MANNER IN THE NAME OF INADEQUACY IN ENQUIRIES OR VERIFICAT ION AS PERCEIVED IN THE OPINION OF THE REVISIONAL AUTHORITY AND THE REVISI ONAL POWERS CANNOT BE ITA NOS.34 & 33/RPR/2021 A.YS. 2016-17 PAGE 7 OF 10 EXERCISED FOR DIRECTING A FULLER ENQUIRY TO MERELY FIND OUT WHETHER THE EARLIER VIEW WAS TAKEN ERRONEOUSLY, PARTICULARLY WHEN A PLA USIBLE VIEW WAS ALREADY TAKEN AFTER ENQUIRY. V) IT WAS FINALLY CONTENDED THAT ALL THE RELEVANT D OCUMENTS AND FACTS CONCERNING THE TRANSACTION WERE AVAILABLE ON RECORD BEFORE THE PCIT. THE PCIT HAS NOT DONE ANYTHING EXCEPT DIRECTING THE A.O. TO RECOMMEN CE SOME UN-SPELLED AND SO- CALLED PROPER ENQUIRY ON THE ISSUE. THE PCIT H IMSELF COULD HAVE EXAMINED THE ISSUE IF HE SO DESIRED WHICH DEPENDED ON MERE L OGICAL APPRECIATION OF FACTS WHICH WERE DULY AVAILABLE BEFORE HIM. VI) THE PCIT IS PRECLUDED FROM DIRECTING MORE ENQUI RIES WITHOUT SHOWING THE NATURE OF ENQUIRIES REQUIRED TO BE CONDUCTED AND WI THOUT CARRYING OUT SOME MINIMUM ENQUIRIES HIMSELF. THE PCIT HAS ONLY ISSUE D A SINGLE NOTICE DATED 19.03.2021 AND PASSED THE REVISIONAL ORDER HURRIEDL Y DATED 23.07.2021 WITHOUT MAKING ANY ENQUIRY EXPECTED OF HIM IN THIS REGARD A ND AFTER PLACING RELIANCE ON INCORRECT BASIC FACTS. IN THE LIGHT OF SUBMISSIONS MADE, IT WAS URGED THAT THE REVISIONAL ORDER OF THE PCIT BE SET ASIDE AND THE ASSESSMENT ORDER PASSED UNDER SEC TION 143(3) OF THE ACT BE RESTORED. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, RELIED UPON THE REVISIONAL ORDER AND CONTENDED THAT EXPLANATION-2 T O SECTION 263 OF THE ACT ENABLES THE PCIT TO HOLD THE ORDER PASSED BY THE A.O. TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, WHERE T HE ORDER IS PASSED WITHOUT MAKING ENQUIRIES OR VERIFICATIONS WHICH SHOULD HAVE BEEN M ADE IN THE CONTEXT OF THE CASE. 8. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED THE REVISIONAL ORDER AS WELL AS THE ASSESSMENT ORDER SOUGHT TO BE REVISE D. THE MATERIAL/DOCUMENTS REFERRED TO AND RELIED UPON IN THE COURSE OF APPEAL HAS BEEN PERUSED IN ACCORDANCE WITH RULE 18(6) OF THE ITAT RULES, 1963. ON PERUSA L OF THE FACTS, IT EMERGES THAT THE ASSESSEE HEREIN ALONG WITH OTHER CO-OWNER SOLD A PA RT OF LAND PARCEL. IT IS THE CASE OF THE ASSESSEE THAT, IN PAST, HE HAS NEVER INDULGED I NTO ANY BUSINESS OF REAL ESTATE OR SALE OR PURCHASE OF PLOTS WHICH FACT HAS BEEN DULY PLACED BEFORE THE A.O. IN THE COURSE OF ASSESSMENT PROCEEDINGS. NO INTEREST BEAR ING FUNDS HAVE BEEN UTILISED AND ITA NOS.34 & 33/RPR/2021 A.YS. 2016-17 PAGE 8 OF 10 NO DEVELOPMENT EXPENSES HAVE BEEN INCURRED. IT IS THE CLAIM OF THE ASSESSEE THAT THE GAIN HAS ARISEN TO THE ASSESSEE DUE TO EFFLUX OF TI ME WITHOUT ANY SPECIFIC EFFORTS AND BECAUSE OF METEORIC RISE IN VALUE OF LAND PARCELS A RISING TO EVERY LAND OWNERS ON ACCOUNT OF UNPRECEDENTED DEVELOPMENT OF RAIPUR CITY . 8.1 WHEN, WE SEE THE FACTS IN ITS NATURAL PERSPECTI VE, THE CHARACTERISATION OF THE INCOME AS CAPITAL GAIN IN THE GIVEN FACTS, LOOKS QUITE PLAUSIBLE. IT CANNOT CERTAINLY BE BRANDED AS AN ISSUE FREE OF ANY DEBATE. THE LAW IS WELL SETTLED THAT WHERE THE A.O. HAS TAKEN A VIEW WHICH IS PLAUSIBLE IN LAW, CANNOT BE DISPLACED AND SUBSTITUTED BY THE SUBJECTIVE VIEW OF A SUPERIOR AUTHORITY. IN THE IN STANT CASE, THE PCIT HAS NOT SHOWN AS TO HOW THE A.O. HAS GONE WRONG WHILE ADMITTING THE NATURE OF INCOME DECLARED BY THE ASSESSEE. THERE IS NOTHING ON RECORD TO SHOW THAT THE A.O. ACTED ARBITRARILY IN EXERCISE OF QUASI JUDICIAL POWERS. THE A.O. HAD ME RELY ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND BACKED BY A LONG LINE OF JUD ICIAL PRECEDENTS HOLDING SUCH INCOME TO BE CAPITAL GAINS. IN CONTRAST, THE PCIT HAS ADOPTED ERRONEOUS MEASUREMENT OF LAND GIVING THE IMPRESSION OF LARGE PARCEL OF LAND WHICH IS NOT TRUE. THE BASIC FEATURES OF A CAPITAL ASSET WERE ALSO OVE RLOOKED. SECONDLY, IT WAS OPEN FOR THE PCIT TO EXAMINE THE FACTS HIMSELF AND COME TO A CONCLUSION OF UN-DEBATABLE NATURE. WE FAIL TO UNDERSTAND WHAT KIND OF ENQUIRI ES IS NEEDED IN SUCH CASES WHEN THE RELEVANT FACTS ARE AVAILABLE ON RECORD BOTH BEF ORE THE A.O. AS WELL AS THE PCIT AND ONLY WARRANTS A RELOOK AT THE SAME. 8.2 EXPLANATION-2 TO SECTION 263 OF THE ACT DOES NO T GIVE A UNCONTROLLED & UNBRIDLED POWER TO THE REVISIONAL COMMISSIONER TO REOPEN A CO MPLETED ASSESSMENT TO CONDUCT FURTHER ENQUIRIES TO VERIFY AND FIND OUT WHETHER OR DER PASSED IS IN FACT ERRONEOUS OR NOT. THE FACTS EXPLAINED ON BEHALF OF THE ASSESSEE GIVES AN INFALLIBLE IMPRESSION THAT THE COURSE ADOPTED BY THE ASSESSEE IN TREATING THE GAINS AS CAPITAL GAINS CHARGEABLE UNDER SECTION 145 OF THE ACT AND ENDORSED BY THE A. O. TO BE PLAUSIBLE. 8.3 THE REVISIONAL POWER EXERCISED IN THE FACTS OF THE CASE IS PLAINLY WITHOUT AUTHORITY OF LAW. CONSEQUENTLY, THE REVISIONAL ORD ER PASSED UNDER SECTION 263 IS LIABLE TO BE QUASHED AND SET ASIDE. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO.33/RPR/2021 A.Y. 2016-17 SHRI ARVIND SAN GOI ITA NOS.34 & 33/RPR/2021 A.YS. 2016-17 PAGE 9 OF 10 9. THE ASSESSEE HEREIN IS OTHER CO-OWNER OF THE SAM E LAND PARCEL, THE CHARACTER OF GAIN ARISING ON SALE THEREFROM IS IN DISPUTE. T HE CONFIGURATION OF FACTS BEING REPLICA TO THE OTHER CO- OWNER (DILIP SANGOI - ITA NO.34/RP R/2021) SUPRA, THE CONCLUSION DRAWN THEREIN SHALL APPLY MUTATIS MUTANDIS TO THE INSTANT CASE AS WELL. CONSEQUENTLY, THE REVISIONAL ORDER PASSED UNDER SECTION 263 OF TH E ACT IN THE CASE OF ARVIND SANGOI IS ALSO QUASHED AND SET ASIDE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 11. IN THE COMBINED RESULT, THE APPEALS OF BOTH THE ASSESSEES CAPTIONED ABOVE ARE ALLOWED. PRONOUNCED ON 29.09.2021 AS PER RULE 34(4) OF THE INCOME TAX APPELLATE TRIBUNAL RULES,1963. SD/- SD/- (N.K. CHOUDHRY) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER UE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR