Vipin Chauhan, Bhopal V. Commissioner of Income Tax (Central), Bhopal

ITA 52/Ind/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 3999 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 22-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Assessee Lawyers: S S DESHPANDE
• Keywords: Unexplained investment; Deduction for capital gain; Capital asset; Bogus loan; Set aside
• Section: 143(3); 54B; 54F; 153A; 143(1); 69; 263; 132

Judgement Text

[ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NOS.52&53/IND/2018 ASSESSMENT YEAR: 2011-12 & 2012-13 VIPIN CHA UHAN 25-6, WALMI ROAD NEW FRIENDS COLONY CHUNA BHATTI, BHOPAL / VS. CIT(CENTRAL) - II BHOPAL ( APPELLANT ) ( REVENUE ) P.A. NO. AARPC4273A APPELLANT BY SHRI S.S. DESHPANDE, A.R. RESPONDENT BY SMT. ASHIMA GUPTA, D.R. DATE OF HEARING: 04.07.2019 DATE OF PRONOUNCEMENT: 21.08.2019 / O R D E R PER KUL BHARAT, J.M: THESE TWO APPEALS BY THE ASSESSEE PERTAINING TO THE ASSESSMENT YEARS 2011-12 & 2012-13 ARE AGAINST SEPARATE ORDERS OF THE LD. PR. CIT (CENTRAL), BHOPAL BOTH DATED [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 2 16.11.2017. BOTH THE APPEALS WERE TAKEN UP TOGETHER F OR THE SAKE OF CONVENIENCE AND ARE BEING DISPOSED OF BY W AY OF A CONSOLIDATED ORDER. 2. FIRST WE TAKE UP ASSESSEES APPEAL IN ITA NO.52/IND/2018 PERTAINING TO THE ASSESSMENT YEAR 2011-12. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS O F APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE OF THE ASSESSEE, THE LD. CIT WAS NOT JUSTIFIED IN HOLDING THAT THE ORDER PASSED BY THE A.O. IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE OF THE ASSESSEE, THE LD. CIT WAS NOT JUSTIFIED IN HOLDING THAT THE PROVISIONS OF SECTION 69 ARE APPLICABLE IN THE CASE OF THE ASS ESSEE. 3. THAT THE ASSESSEE CRAVES LEAVE TO ADD, AMEND, MODIF Y OR ALTER ANY GROUND OF APPEAL ON OR BEFORE THE HEARING. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS HAVING INCOME FROM BUSINESS FROM ARCHITECTURAL CONSULTANCY AN D INTERIOR DESIGNER PARTNERSHIP FIRM AND OTHER SOURCES. A SEARCH & SEIZURE ACTION U/S 132 OF THE INCOME TAX ACT , 1961 (HEREINAFTER CALLED AS THE ACT) WAS CARRIED OUT O N [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 3 29.1.2014 AND THE ASSESSMENT U/S 153A R.W.S. 143(3) O F THE ACT FOR THE ASSESSMENT YEAR 2008-09 WAS FRAMED VID E ORDER DATED 23.3.2016. SUBSEQUENTLY, THE LD. PR. CIT FROM THE RECORDS OBSERVED THAT THE ASSESSEE HAD SHOWN ADVANCES GIVEN TO ONE MS. SMRITI CHAUHAN OF RS.59,73,000/- AS ON 31.3.2011 UNDER THE HEAD LOANS AN D ADVANCES WHEREAS MS. SMRITI CHAUHAN DISCLOSED UNSECURED LOAN OF RS.59,23,000/- FROM THE ASSESSEE AS ON 31.3.2011. THUS, IT WAS INFERRED BY THE LD. PR. CIT THAT THE ASSESSEE HAD CLAIMED BOGUS LOANS AND ADVANCES OF RS.50,000/-. ON THIS GROUND, THE LD. PR. CIT INVOK ED THE PROVISIONS OF SECTION 263 OF THE ACT AND ISSUED A NOT ICE U/S 263(1) OF THE ACT ON 31.8.2017. IN RESPONSE THERET O, THE ASSESSEE WAS REPRESENTED THROUGH ITS AUTHORISED REPRESENTATIVE AND WRITTEN SUBMISSION WAS FILED. THE LD. PR. CIT DID NOT ACCEPT THE SUBMISSIONS AS MADE BY THE ASSESSEE AND PROCEEDED TO REVISE THE ASSESSMENT ORDER AND [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 4 SET ASIDE THE ASSESSMENT ORDER DATED 23.3.2016 PERTAINI NG TO THE ASSESSMENT YEAR UNDER APPEAL AND DIRECTED THE ASSESSING OFFICER TO REFRAME THE ASSESSMENT AFTER EXAMINING THE AFORESAID ISSUE RELATED TO LOANS AND ADVANCES. AGGRIEVED AGAINST THIS, THE ASSESSEE IS IN PRESENT APPEAL. 4. GROUND NOS.1 & 2 ARE AGAINST INITIATING THE PROCEEDINGS U/S 263 OF THE ACT AND HOLDING THAT THE PROVISIONS OF SECTION 69 OF THE ACT ARE APPLICABLE. G ROUND NO.3 IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDICATION. 5. APROPOS TO GROUND NOS.1 & 2, LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WR ITTEN SUBMISSIONS. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD SHOWN UNDER THE HEAD LOANS AND ADVANCES A SUM OF RS.1,31,34,272/-, WHICH INCLUDED TH E [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 5 ADVANCES TO MS. SMRITI CHAUHAN AT RS.59,73,000/-. FURTHER, IN THE RETURN OF INCOME, MS. CHAUHAN DISCLO SED THE ADVANCES FROM ASSESSEE AT RS.59,23,000/-. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE H AD DULY DISCLOSED ALL THE TRANSACTIONS ENTERED BY HIM. T HE RETURNS WERE DULY PROCESSED U/S 143(1) OF THE ACT AF TER THE SEARCH ASSESSMENT WAS COMPLETED BY MAKING THE ADDITIONS IN RESPECT OF UNSECURED LOANS AND UNEXPLAINED EXPENDIT URE OF FOREIGN TOUR. NO ADDITION WAS MADE IN RESPECT OF THE CLAIM OF THE ASSESSEE FOR THE CAPITAL GAIN. THE CLAIM MA DE IN THE ORIGINAL RETURN WAS ACCEPTED. IT IS CONTENDED THAT NO INCRIMINATING MATERIAL WAS FOUND IN RESPECT OF THE TRANSACTION. IN THE ABSENCE OF ANY INCRIMINATING MATERIAL , NO ADDITION COULD HAVE BEEN MADE. IT IS SUBMITTED TH AT ON THIS PROPOSITION, IF THE ADDITION COULD NOT HAVE BEEN MADE IN THE ORIGINAL ASSESSMENT, THEN THE SAME COULD NOT BE TREATED AS ERRONEOUS ASSESSMENT, WHICH IS PREJUDICIAL T O [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 6 THE INTEREST OF REVENUE. IT WAS FURTHER SUBMITTED T HAT ACTION U/S 263 OF THE ACT COULD HAVE BEEN TAKEN AGAINST THE INTIMATION. NOW AFTER EXPIRY OF 2 YEARS, IT IS BE YOND LIMITATION. 6. LD. D.R. OPPOSED THESE SUBMISSIONS AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. LD. CIT(DR) VEHEMENTLY ARGUED THAT THE ASSESSEE COULD NOT EXPLAIN T HE REASON AS TO WHY MS. SMRITI CHAUHAN HAS DECLARED LOAN AND ADVANCES LESSER THAN WHAT THE ASSESSEE HAS CLAIMED AMOUNTING TO RS.50,000/-. LD. CIT(DR) FURTHER SUBMI TTED THAT THE A.O. FAILED TO TAKE NOTE OF THIS FACT AND THERE FORE, EX-FACIE ORDER OF THE A.O. IS ERRONEOUS AND SO FAR IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. LD. CIT (DR) ARGUED THAT IT IS NOT THE QUESTION OF A SMALL FIGURE. I T IS THE QUESTION WHETHER THE ORDER IS ERRONEOUS AND PREJUDICI AL TO THE INTEREST OF THE REVENUE. IN REJOINDER, LD. COU NSEL FOR THE ASSESSEE SUBMITTED THAT NEITHER MS. SMRITI CHAUHAN [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 7 WAS EXAMINED BY THE LD. PR. CIT NOR ANY CROSS EXAMINATIO N WAS GIVEN TO THE ASSESSEE. MERELY BECAUSE MS. SMRITI CHAUHAN HAS SHOWN UNSECURED LOAN AT A LOWER FIGURE THAT TOO OF A MEAGER DIFFERENCE OF RS.50,000/- ONLY WOULD NOT MAKE THE ASSESSMENT ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ONLY GROUND WHICH THE LD. PR. CIT REVISED THE CONCLUDED ASSESSMENT THAT MS. SMRITI CHAUHAN DECLARED A LESSER FIGURE OF THE ADVANCES RECEIV ED FROM SHRI VIPIN CHAUHAN, THE ASSESSEE HEREIN. LD. COUNSEL FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TO PAP ER BOOK PAGE NO.5, WHEREIN THE LEDGER ACCOUNT OF MS. CHAUHAN IS ENCLOSED. IT IS NOTICED THAT A SUM OF RS.59,73,000/- WAS PAID TO MS. CHAUHAN FROM 31.12.2010 TO 29.3.2011. THERE IS NO DISPUTE REGARDING THIS. ALL THESE [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 8 PAYMENTS HAVE BEEN MADE THROUGH BANKING CHANNELS. WE FIND THAT LD. PR. CIT HAS NOT MADE ANY ENQUIRY FROM SMT. SMRITI CHAUHAN. EXCEPT THAT THE ACCOUNTS OF MS. CHAUHAN, NO OTHER EVIDENCE SUPPORTING THAT THE ASSESSE E HAD NOT ADVANCED A SUM OF RS.59,73,000/- TO MS. CHAUHAN. THE LD. PR. CIT HAS ACCEPTED THE DISCLOSURE OF RS.59,23,000/- BY MS. SMRITI CHAUHAN. THE LD. PR. C IT HAS NOT OBSERVED ANY OTHER DEFECT, ERROR OR MISTAKE IN THE ASSESSMENT ORDER SOUGHT TO BE REVISED. UNDER THESE UNDISPUTED FACTS, THE ACTION TAKEN BY THE LD. PR. CIT COULD NOT BE SUSTAINED. THE LAW IS WELL SETTLED THAT THE O RDER OF THE A.O. SHOULD BE ERRONEOUS AND SO FAR IT IS PREJUDI CIAL TO THE INTEREST OF THE REVENUE. IN THE CASE IN HAND, T HE LD. PR. CIT COULD NOT BRING ON RECORD MATERIAL EVIDENCE SUGGE STING THAT THE FIGURE OF THE LOANS AND ADVANCES AS CLAIMED BY TH E ASSESSEE IS INCORRECT AND THE FIGURE OF LOANS AND ADVANC ES AS DISCLOSED BY MS. SMRITI CHAUHAN IS CORRECT. IN TH E [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 9 ABSENCE OF THE SAME AND LOOKING TO THE SMALLNESS OF FIG URE, THE LD. PR. CIT OUGHT NOT TO HAVE REVISED THE ORDER FOR THE ASSESSMENT YEAR 2011-12. ONE OF THE ARGUMENT OF THE REVENUE WAS THAT NO PREJUDICE IS CAUSED TO THE ASSESSEE . THE LD. PR. CIT HAS MERELY DIRECTED TO REFRAME THE ASSESSMENT AFTER EXAMINING THE ISSUE OF LOANS AND ADVANCES. THE HON'BLE DELHI HIGH COURT IN THE CASE OF ITO VS. DG HOUSING PROJECTS LTD. IN ITA NO.179/2011 HAS HELD AS UNDER: 17. THIS DISTINCTION MUST BE KEPT IN MIND BY THE CIT WH ILE EXERCISING JURISDICTION UNDER SECTION 263 OF THE AC T AND IN THE ABSENCE OF THE FINDING THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, EXERCISE OF JURISDICTI ON UNDER THE SAID SECTION IS NOT SUSTAINABLE. IN MOST CASES OF ALLEG ED INADEQUATE INVESTIGATION, IT WILL BE DIFFICULT TO HOLD THAT T HE ORDER OF THE ASSESSING OFFICER, WHO HAD CONDUCTED ENQUIRIES AND HAD ACTED AS AN INVESTIGATOR, IS ERRONEOUS, WITHOUT CIT CONDUCTI NG VERIFICATION/INQUIRY. THE ORDER OF THE ASSESSING O FFICER MAY BE OR MAY NOT BE WRONG. CIT CANNOT DIRECT RECONSIDERATIO N ON THIS GROUND BUT ONLY WHEN THE ORDER IS ERRONEOUS. AN ORDER OF REMIT CANNOT BE PASSED BY THE CIT TO ASK THE ASSESSING OFFICER TO D ECIDE WHETHER THE ORDER WAS ERRONEOUS. THIS IS NOT PERMISSIBLE. AN ORDER IS NOT ERRONEOUS, UNLESS THE CIT HOLD AND RECORDS REASONS WHY IT IS ERRONEOUS. AN ORDER WILL NOT BECOME ERRONEOUS BECA USE ON REMIT, THE ASSESSING OFFICER MAY DECIDE THAT THE ORDER IS ERRONEOUS. THEREFORE CIT MUST AFTER RECORDING REASONS HOLD THA T THE ORDER IS ERRONEOUS. THE JURISDICTIONAL PRECONDITION STIPULA TED IS THAT THE CIT MUST COME TO THE CONCLUSION THAT THE ORDER IS ERRON EOUS AND IS UNSUSTAINABLE IN LAW. WE MAY NOTICE THAT THE MATER IAL WHICH THE [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 10 CIT CAN RELY INCLUDES NOT ONLY THE RECORD AS IT STA NDS AT THE TIME WHEN THE ORDER IN QUESTION WAS PASSED BY THE ASSESS ING OFFICER BUT ALSO THE RECORD AS IT STANDS AT THE TIME OF EXAMINA TION BY THE CIT [SEE CIT VS. SHREE MANJUNATHESWARE PACKING PRODUCTS , 231 ITR 53 (SC)]. NOTHING BARS/PROHIBITS THE CIT FROM COLLECT ING AND RELYING UPON NEW/ADDITIONAL MATERIAL/EVIDENCE TO SHOW AND S TATE THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS. 18. IT IS IN THIS CONTEXT THAT THE SUPREME COURT IN MALABAR INDUSTRIAL CO. LTD. VS. COMMISSIONER OF INCOME TAX, (2000) 243 ITR 83 (SC), HAD OBSERVED THAT THE PHRASE PREJUDICIAL TO THE INTEREST OF REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRO NEOUS ORDER PASSED BY THE ASSESSING OFFICER. EVERY LOSS OF REV ENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CA NNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF REVENUE. THUS, W HEN THE ASSESSING OFFICER HAD ADOPTED ONE OF THE COURSES PERMISSIBLE AND AVAILABLE TO HIM, AND THIS HAS RESULTED IN LOSS TO REVENUE; OR T WO VIEWS WERE POSSIBLE AND THE ASSESSING OFFICER HAS TAKEN ONE VI EW WITH WHICH THE CIT MAY NOT AGREE; THE SAID ORDERS CANNOT BE TR EATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF REVE NUE UNLESS THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABL E IN LAW. IN SUCH MATTERS, THE CIT MUST GIVE A FINDING THAT THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW AND, THER EFORE, THE ORDER IS ERRONEOUS. HE MUST ALSO SHOW THAT PREJUDICE IS CAU SED TO THE INTEREST OF THE REVENUE. IN THE LIGHT OF THE ABOVE, THE IMPUGNED ORDER CANNOT BE SUSTAINED ON THIS ISSUE. HENCE, WE HOLD ACCORDING LY. THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 8. APROPOS TO GROUND NO.2, LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE AMOUNT WAS DULY REFLECTED AND HAS BEEN ADVANCED THROUGH BANKING CHANNEL AND DULY DISCLOSED IN THE ACCOUNTS AND BALANCE SHEET. HENCE, TH E [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 11 LOANS CANNOT BE TREATED AS INCOME UNDER ANY PROVISION OF THE INCOME TAX ACT. THE ACTION OF THE LD. PR. CIT I S WHOLLY BAD IN LAW. THE ORDER DESERVES TO BE CANCELLED. 9. LD. D.R. OPPOSED THESE SUBMISSIONS AND SUPPORTED THE ORDER OF THE LD. PR. CIT. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. AS PER THE LD. PR. CIT, T HE DIFFERENCE IN FIGURE REFLECTED BY THE ASSESSEE AND SM T. SMRITI CHAUHAN IS A CLAIM OF BOGUS LOAN AND ADVANCE AND IS REQUIRED TO BE ASSESSED U/S 69 OF THE ACT, WHICH W AS NOT DONE BY THE A.O. FOR THE SAKE OF CLARITY, PROVISIONS OF SECTION 69 OF THE ACT ARE REPRODUCED AS UNDER: UNEXPLAINED INVESTMENTS WHERE IN THE FINANCIAL YEA R IMMEDIATELY PRECEDING THE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS WHICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE O FFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THE INVE STMENTS OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE 2 ASSESSING] OFFICER, SATISFACTORY, THE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF SUCH FINANCIAL YEA R. [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 12 11. FROM A BARE READING OF THE AFORESAID PROVISION, IT IS CLEAR THAT SECTION 69 OF THE ACT CAN BE INVOKED IN THE CASE WHERE THE ASSESSEE MADE INVESTMENT AND ARE NOT RECORDED IN THE BOOKS OF ACCOUNTS. IT IS NOT SO IN THE CASE IN THE PRESENT CASE. THEREFORE, WE ARE OF THE VIEW T HAT LD. PR. CIT HAS MISDIRECTED HIMSELF IN COMING TO THE CON CLUSION THAT THE DIFFERENCE BETWEEN THE FIGURES OF RS.50,000 /- I.E. DISCLOSED BY THE ASSESSEE AS A LOAN AND ADVANCE AND DISCLOSED BY MS. SMRITI CHAUHAN AS LOAN AND ADVANCE RECEIVED FROM THE ASSESSEE. THEREFORE, THE FINDING OF THE LD. PR. CIT IS NOT ACCORDANCE WITH LAW. HENCE, WE H OLD THAT LD. PR. CIT IS NOT JUSTIFIED IN HOLDING THAT THE ASSESSMENT ORDER SOUGHT TO BE REVISED IS ERRONEOUS AN D PREJUDICIAL TO THE INTEREST OF THE REVENUE. THEREFO RE, WE SET ASIDE THE ORDER OF THE LD. PR. CIT AND RESTORE THE OR IGINAL [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 13 ASSESSMENT ORDER. THE GROUNDS RAISED IN THIS APPEAL AR E ALLOWED. 12. NOW COMING TO THE ITA NO.53/IND/2018, THE ASSESS EE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE OF THE ASSESSEE THE ORDER PASSED IS BARRED BY LIMITATION. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE OF THE ASSESSEE, THE LD. CIT WAS NOT JUSTIFIED IN HOLDING THAT THE ORDER PASSED BY THE A.O. IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE OF THE ASSESSEE, THE LD. CIT WAS NOT JUSTIFIED IN HOLDING THAT THE A.O. HAD NOT MADE THE REQUIRED ENQUIRY. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE OF THE ASSESSEE, THE LD. CIT WAS NOT JUSTIFIED IN HOLDING THAT THE ASSESSEE HAS NOT SOLD AN AGRICULTURE LAND. 5. THAT THE ASSESSEE CRAVES LEAVE TO ADD, AMEND, MODIF Y OR ALTER ANY GROUND OF APPEAL ON OR BEFORE THE HEARING. 13. FACTS IN THE PRESENT APPEAL ARE IDENTICAL AS WERE IN THE ASSESSMENT YEAR 2011-12 EXCEPT THE REASON FOR REVISING THE ORDER FOR THE ASSESSMENT YEAR UNDER CONSIDERATION IS THAT THE LD. PR. CIT ON THE BASIS OF THE INFORMATION AVAILABLE ON RECORD OBSERVED THAT THE ASSESS EE HAD SOLD A RESIDENTIAL PLOT (THE LAND WAS NOT USED FOR [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 14 AGRICULTURAL PURPOSES) AND CAPITAL GAIN OF RS.16,92,237/ - WAS INVESTED IN THE PURCHASE OF AGRICULTURAL LAND. THEREFORE, THE EXEMPTION CLAIMED BY THE ASSESSEE AND ALLOWED U/S 54B OF THE ACT WAS NOT IN ORDER AS THE LAND SOLD WAS A RESIDENTIAL PLOT AND NOT USED FOR AGRICULTURAL PURPOSES. THE LD. PR. CIT ISSUED A NOTICE U/S 263(1 ) OF THE ACT. IN RESPONSE THERETO, THE ASSESSEE MADE A WRITTEN SUBMISSION BEFORE THE LD. PR. CIT, HOWEVER, THE LD. PR. CIT DID NOT ACCEPT THESE SUBMISSIONS AND PROCEEDED TO RE VISE THE ASSESSMENT ORDER DATED 23.3.2016. THEREBY THE LD . PR. CIT SET ASIDE THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2012-13 AND DIRECTED THE A.O. TO REFRAME THE ASSESSMEN T AFTER EXAMINING THE ISSUE OF AVAILABILITY OF DEDUCTION U/S 54B OF THE ACT. AGAINST THIS THE ASSESSEE IS IN THE PRESENT APPEAL. 14. GROUND NO.1 IS AGAINST ORDER BEING BARRED BY LIMITATION. APROPOS TO THIS GROUND, LD. COUNSEL FOR THE [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 15 ASSESSEE SUBMITTED THAT THE IMPUGNED ORDER IS BARRED B Y LIMITATION. AS THE LIMITATION FOR INVOKING THE PROVI SIONS OF SECTION 263 OF THE ACT WOULD START RUNNING WHEN THE ORIGINAL ASSESSMENT ORDER WAS PASSED. HE VEHEMENTLY ARGUED THAT LIMITATION WOULD BE RECKONED FROM THE DATE OF THE ORIGINAL ORDER. LD. COUNSEL SUBMITTED THAT A.O. IN THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT ALLOWED THE CLAIM OF DEDUCTION U/S 54B OF THE ACT. IT IS NOT TH E CASE WHERE THE ASSESSMENT SOUGHT TO BE REVISED U/S 143(3) R.W.S. 153A OF THE ACT. LD. CIT(DR) OPPOSED THESE SUBMISSIONS AND SUBMITTED THAT THE POWER OF REVISION IS NOT RESTRICTED TO THE ORIGINAL ORDER. LD. PR. CIT I S AUTHORISED TO REVISE ANY ORDER PASSED UNDER THE INCOME TAX ACT, IF HE IS SATISFIED THAT ORDER SO PASSED IS ER RONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. LD. CIT(DR) FURTHER SUBMITTED THAT THE ASSESSEE IS RAI SING [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 16 SUCH ABSURD OBJECTION JUST FOR THE SAKE OF OBJECTION . IT IS NOT SUPPORTED BY THE LAW. 15. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE DO NOT FIND ANY MERIT I N THE GROUND RAISED BY THE ASSESSEE AS THE IMPUGNED ORDER IS WELL WITHIN LIMITATION AS PRESCRIBED UNDER THE LAW. THE ORDER SO REVISED WAS PASSED ON 23.3.2016. THE IMPUGN ED ORDER U/S 263 OF THE ACT IS DATED 16.11.2017. AS PE R THE SECTION 263(2) OF THE ACT, NO ORDER CAN BE PASSED U/S 263(1) OF THE ACT AFTER THE EXPIRY OF 2 YEARS FROM TH E END OF THE FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE RE VISED WAS PASSED. IN THE PRESENT CASE, THE IMPUGNED ORDER WAS PASSED ON 16.11.2017, WHICH IS WELL WITHIN TIME. HE NCE, GROUND NO.1 IS DISMISSED BEING DEVOID OF ANY MERIT AS THE LAW SPEAKS OF THE ORDER SOUGHT TO BE REVISED BUT NOT THE ISSUE DECIDED. [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 17 16. GROUND NOS.2 TO 4 ARE AGAINST INVOKING THE PROVISI ONS OF SECTION 263 OF THE ACT ON THE GROUND THAT THE CIT WAS NOT JUSTIFIED IN HOLDING THAT ORDER PASSED BY THE A.O . IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVE NUE. FURTHER, LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT A.O. HAD NOT MADE THE REQUISITE ENQUIRY AND HOLDING THAT THE ASSESSEE HAS NOT SOLD AN AGRICULTURAL LAND. APROPOS TO GROUND NOS.2 TO 4, LD. COUNSEL FOR THE ASSESSEE VEHE MENTLY ARGUED THAT LD. PR. CIT FAILED TO APPRECIATE THE FACTS CORRECTLY. HE SUBMITTED THAT AS PER THE REVENUE RECO RDS, LAND IN QUESTION WAS AGRICULTURAL LAND. AS PER THE REVE NUE RECORDS, AGRICULTURAL ACTIVITIES WERE BEING CARRIED OUT . THE SOLE GROUND OF REVISING THE ASSESSMENT ORDER IS PATEN TLY ON ASSUMPTION OF INCORRECT FACTS. LD. COUNSEL FOR THE AS SESSEE HAS DRAWN OUR ATTENTION TO THE SALE DEED TO BUTTRESS T HE ARGUMENT THAT WHAT WAS SOLD WAS AN AGRICULTURAL LAND. LD. COUNSEL FOR THE ASSESSEE FURTHER REITERATED THE SUBMI SSIONS [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 18 AS MADE IN THE WRITTEN SUBMISSIONS. IT IS SUBMITTED THAT LD. PR. CIT WRONGLY APPRECIATED THE FACTS. THE LAND I N QUESTION HAS BEEN PURCHASED AS AN AGRICULTURAL LAND AND HAS BEEN SOLD AS AN AGRICULTURAL LAND MENTIONING THE SURVEY NUMBER. THIS FACT CANNOT BE IGNORED. THE LAND IN QUESTION AS PURCHASED MAINLY OF ABOUT 0.4 ACRES ADMEASURING 18,600 SQ.FT. IN KHASARA NAKAL AND ALSO HAS BEEN SOLD AS AN AGRICULTURAL LAND. IT WAS FURTHER SUBM ITTED THAT ASSESSEE SOLD THE LAND ON 2.6.2011 AND HAD PURCHASED A RESIDENTIAL APARTMENT IN NOIDA UNDER A PROVISIONAL ALLOTMENT LETTER DATED 16.7.2010 AND HAS MAD E VARIOUS PAYMENTS. THUS, THE DEDUCTION IS ALLOWABLE U /S 54F OF THE ACT. IN SUPPORT OF THIS, HE DREW OUR ATT ENTION TO THE RECEIPT DATED 9.7.2012, 2.11.2010, 23.10.2010 & 12.1.2010. 17. PER CONTRA, LD. D.R. OPPOSED THESE SUBMISSIONS. LD. D.R. RELIED ON THE IMPUGNED ORDER AND SUBMITTED THAT [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 19 THERE IS CATEGORICAL FINDING BY THE LD. PR. CIT THAT N O AGRICULTURAL ACTIVITY WAS BEING CARRIED OUT. THE ASSESSE E HAS NOT PLACED ANY MATERIAL ON RECORD TO CONTRADICT SUCH FINDING. THE LD. CIT (DR) VEHEMENTLY ARGUED THAT THE ONUS IS ON THE ASSESSEE TO PROVE THAT HE IS ENTITLED FOR D EDUCTION U/S 54B OF THE ACT OR 54F OF THE ACT. LD. CIT(DR) SUBMITTED THAT EVEN BEFORE THE A.O., NO DEDUCTION U/ S 54F OF THE ACT OR BEFORE THE LD. PR. CIT WAS MADE. LD. D.R. SUBMITTED THAT EX-FACIE, A.O. FAILED TO EXAMINE THE IS SUE. LD. D.R. FURTHER ARGUED THAT LD. PR. CIT LOOKING TO T HE FACTS HAS MERELY RESTORED THE ISSUE TO THE FILE OF THE A.O . FOR DECISION AFRESH. IF THE ASSESSEE IS ENTITLED FOR ANY DEDUCTION, HE CAN PROVE BEFORE THE A.O. LD. CIT(DR) SUBMITTED THAT NO PREJUDICE IS CAUSED TO THE ASSESSEE UNDER THE FACTS OF THE PRESENT CASE. 18. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 20 OF THE AUTHORITIES BELOW. WE FIND THAT LD. PR. CIT H AS OBSERVED IN THE IMPUGNED ORDER AS UNDER: 4.2 THE SUBMISSIONS OF THE ASSESSEE IS DULY CONSIDE RED. THE ASSESSEE HAS FAILED TO SUBSTANTIATE WITH OFFICIAL DOCUMENTS TO SUPPORT HIS CLAIM THAT LAND SOLD IS BEING AGRICULTURAL LAND. ON PERUSAL O F THE SALE DEED, IT IS APPARENT THAT THE CAPITAL GAIN HAD ARISEN ON SALE O F PLOT ADMEASURING AREA OF 9310 SQ.FT. TO M/S. KRISHNA BUILDERS ON 2.6.2011 FOR RS.22,50,000/- (BEING HALF SHARE OF THE LAND) AND CLAIMED EXEMPTIO N U/S 54B OF THE ACT OF RS.16,92,237/-. IT IS ALSO NOTICED THAT NOWHERE IN THE SALE DEED IT IS MENTIONED THAT THE IMPUGNED LAND SOLD IS AGRICULTUR AL LAND EXCEPT IN PAGE NO.02, WHEREIN KRISHI HAS BEEN HANDWRITTEN BEFORE BHUMI. 4.3 THE RELEVANT PORTION OF SECTION 54B IS REPRODUC ED AS UNDER FOR READY REFERENCE:- 54B [(1)] [SUBJECT TO THE PROVISIONS OF SUB-SECTIO N (2), WHERE THE CAPITAL GAIN ARISES] FROM THE TRANSFER OF A CAPITAL ASSET B EING LAND WHICH, IN THE TWO YEARS IMMEDIATELY PRECEDING THE DATE ON WHICH T HE TRANSFER TOOK PLACE, WAS BEING USED BY [THE ASSESSEE BEING AN IND IVIDUAL OR HIS PARENT, OR A HINDU UNDIVIDED FAMILY] FOR AGRICULTURAL PURPO SES [(HEREINAFTER REFERRED TO AS THE ORIGINAL ASSET)], AND THE ASSESS EE HAS, WITHIN A PERIOD OF TWO YEARS AFTER THE DATE, PURCHASED ANY OTHER LAND FOR BEING USED FOR AGRICULTURAL PURPOSES. IN VIEW OF SECTION 54B OF THE ACT, TO CLAIM CAPITAL GAIN EXEMPTION, THE CAPITAL GAIN SHOULD ARISE FROM SALE OF LAND BEING A CAPITAL ASSET USED FOR AGRICULTURAL PURPOSES AND THE CAPITAL GAIN ARISEN S HOULD BE INVESTED IN THE PURCHASE OF AGRICULTURAL LAND USED FOR AGRICULTURAL PURPOSES. FROM THE ABOVE DISCUSSION, IT IS APPARENT THAT THE ASSESSEE IS NOT ELIGIBLE FOR AVAILING EXEMPTION U/S 54B OF THE INCOME TAX ACT, 1 961 IN VIEW OF THE CONDITIONS FOR AVAILING EXEMPTION EXPRESSLY PROVIDE D IN SECTION 54B OF THE INCOME TAX ACT, 1961. THE ASSESSEE HAD SOLD A RESI DENTIAL PLOT (THE LAND WAS NOT USED FOR AGRICULTURAL PURPOSES) AND CAPITAL GAIN OF RS.16,92,237/- WAS INVESTED IN PURCHASE OF AGRICULTURAL LAND. 4.4 IT IS AN ESTABLISHED LAW THAT AN ASSESSMENT WHI CH IS PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, IT IS E XPECTED FROM ASSESSING OFFICER THAT HE WILL MAKE ENQUIRY TO FIND OUT THE C ORRECT ASSESSABLE INCOME OF THE ASSESSEE AND NOT TAKE THE FACTS PLACED BY TH E ASSESSEE ON THEIR FACE VALUE. [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 21 IT IS A SETTLED LAW THAT IF THE ASSESSING OFFICER F AILS TO MAKE PROPER ENQUIRY, THE ASSESSMENT ORDER PASSED BY HIM IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. FURTHER, EXPLANATION 2 OF SEC TION 263(1) OF THE INCOME TAX ACT, 1961 (INSERTED BY THE FINANCE ACT, 2015 W. E.F. 1.6.2015 READS AS UNDER:- FOR THE PURPOSES OF THIS SECTION, IT IS HEREBY DEC LARED THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE, IF IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER,-- (A) THE ORDER IS PASSED WITHOUT MAKING ENQUIRIES OR VER IFICATION WHICH SHOULD HAVE BEEN MADE; (B) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT ENQ UIRING IN TO THE CLAIM; 5. AFTER CAREFUL EXAMINATION OF THE FACTS PLACED ON RECORD, I AM OF THE VIEW THAT THE ASSESSING OFFICER DID NOT EXAMINE THE FACTS OF THE CASE PROPERLY AS IT WAS REQUIRED FROM HIM. CONSIDERING THE ABOVE FACTS, I AM SATISFIED THAT THE ORDER PASSED BY THE ASSESSING OF FICER U/S 153A R.W.S. 143(3) FOR A.Y. 2012-13 ON 23.3.2016 IS ERRONEOUS A ND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THEREFORE, THE ORDER PAS SED BY THE ASSESSING OFFICER U/S 153A R.W.S. 143(3) FOR A.Y. 2012-13 ON 23.3.2016 IS SET ASIDE. THE ASSESSING OFFICER IS DIRECTED TO REFRAME THE AS SESSMENT AFTER EXAMINING THE ABOVE SAID ISSUE AND AFTER AFFORDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. 19. THE BASIS OF TREATING THE AGRICULTURAL LAND BY THE LD. PR. CIT AS CAPITAL ASSET IS THAT NO EVIDENCE WAS PLACED O N RECORD PROVING THAT THE AGRICULTURAL ACTIVITY WAS BEING CARRIED OUT BY THE ASSESSEE. WE FIND THAT A BARE READING OF SECTION 54B OF THE ACT MAKES IT CLEAR THAT FOR BEING E LIGIBLE FOR DEDUCTION U/S 54B OF THE ACT, THE LAND OUGHT TO HAVE BEEN USED FOR AGRICULTURAL PURPOSES FOR 2 YEARS IMME DIATELY PRECEDING THE DATE ON WHICH THE TRANSFER TOOK PLACE. THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL ON RECORD [ITA NOS.52 & 53/IND/2018 ] [VIPIN CHAUHAN, BHOPAL] 22 SUGGESTING THAT THE LAND WAS BEING USED FOR AGRICULTUR AL PURPOSES. HOWEVER, WE FIND THAT LD. PR. CIT HAS MERE LY RESTORED THE ISSUE TO THE A.O. FOR DECISION AFRESH. UNDER THESE UNDISPUTED FACTS, NO INTERFERENCE IS CALLED FOR . HOWEVER, THE ASSESSEE IS AT LIBERTY TO PRODUCE EVIDEN CES IN SUPPORT OF HIS CLAIM FOR DEDUCTION. THE GROUNDS RAIS ED IN THIS APPEAL ARE DISMISSED. 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.52/IND/2018 FOR THE A.Y. 2011-12 IS ALLOWED AND APP EAL OF THE ASSESSEE IN ITA NO.53/IND/2018 FOR THE A.Y. 2 012- 13 IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 21. 08.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 21/08/2019 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE