TAPADIA CONSTRUCTIONS LTD,AURANGABAD V. PR. CIT, (CENTRAL), NAGPUR, NAGPUR

ITA 650/PUN/2024

AI Insights

The case involves Tapadia Constructions Ltd., which appealed against the order of the PCIT (Central), Nagpur, revising the assessment order for the assessment year 2015-16 under section 263 of the Income Tax Act, 1961. The original assessment was completed under section 153A read with section 143(3) after a search operation, and the PCIT later found discrepancies in the valuation of properties sold by the assessee compared to government valuations. The Tribunal examined whether the PCIT had the jurisdiction to revise the assessment order, considering the prior approval under section 153D and the lack of incriminating material.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784336 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 01-04-2024
• Other Referred Cases: PCIT vs. Prakhar Developers (P.) Ltd., Gyan Infrabuild Private Limited vs. PCIT, Ramamoorthy Vasudevan vs. PCIT, Dhariwal Industries Ltd. vs. CIT, Devender Kumar Gupta vs. PCIT, Alankit Associates Pvt. Ltd. vs. PCIT, Martial Buildcom P. Ltd. vs. DCIT, Lord Krishna Dwellers (P) Ltd. vs. DCIT, CIT vs. Smt. Padmavathi, Sai Bhargavanath Infra vs. ACIT, Shri Krishnaraj Build Home Pvt. Ltd. vs. ITO, M/s. Reegal Construction vs. ITO, Bal Kishan Gupta vs. ACIT, Naina Saraf vs. PCIT, DCIT vs. Jankhit Chandulal Prajapati, Spytech Buildcon vs. ACIT, T.N. Civil Supplies Corporation Ltd. vs. CIT, CIT vs. M/s. Fine Jewellery (India) Ltd., CIT vs. Sunbeam Auto, CIT vs. Gabriel India Ltd., Krishi Utpanna Bazar Samittee vs. DCIT vice versa
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT BOBDE
• Assessee Lawyers: SHUBHAM N. RATHI
• Keywords: Set aside; Opportunity of being heard; Revenue expenditure; Retrospective amendment; Sale consideration of property below Jantri Value; Fair market value; Income from undisclosed sources; Document seized; Documents seized; Capital receipt; Capital expenditure; Capital Gains; Valuation report; Assessment record; Competent authority; Revision of order; Prejudicial to interest; Bogus
• Section: 143(3); 142(1); 263; 43CA; 132; 153A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER ITA No.650/PUN/2024 Assessment year : 2015-16 Tapadia Constructions Ltd., 1st Floor, Tapadia Terraces, Adalat Road, Aurangabad – 431001 Vs. PCIT (Central), Nagpur PAN: AABCT0347F (Appellant) (Respondent) Assessee by : Shri Shubham N. Rathi Department by : Shri Amit Bobde, CIT Date of hearing : 17-09-2025 Date of pronouncement : 12-11-2025 O R D E R PER R.K. PANDA, V.P: This appeal filed by the assessee is directed against the order dated 22.02.2024 passed u/s 263 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the Ld. PCIT(Central), Nagpur relating to assessment year 2015-16. 2. Facts of the case, in brief, are that the assesse is a private limited company engaged in the business of builders, developers, housing projects, hotel and sports club, investment / dealing in shares and securities. It had filed its original return of income on 30.09.2015 declaring total loss of Rs.26,06,750/-. The case was Printed from counselvise.com 2 ITA No.650/PUN/2024 selected for scrutiny under CASS and the order u/s 143(3) of the Act was passed on 15.05.2017 assessing the total loss at Rs.23,50,420/- against the returned loss of Rs.26,06,750/-. A search action u/s 132 of the Act was conducted on 21.08.2018 at the business and residential premises of different members / associate concern of Tapadia group at Aurangabad and their family members and business concerns during which the assessee was also covered. In response to notice u/s 153A of the Act the assessee filed its return of income on 01.06.2020 declaring total loss at Rs.23,50,420/-. The Assessing Officer completed the assessment u/s 153A of the Act on 02.06.2021 determining the total income of the assessee at Rs.23,43,850/- wherein he had made addition of Rs.46,94,267/- u/s 43CA of the Act on the ground that there is a difference of Rs.46,94,267/- between the actual consideration of the land and the government valuation. 3. Subsequently, the Ld. PCIT perused the record and found that a valuation report was furnished by the Sub-Registrar, Jalna vide letter dated 30.04.2021, according to which, the valuation was given for land at Gut No.105, lands in 22 other Guts and also for buildings, plant and machinery on the above land. On perusal of the valuation report he noticed that the Registrar has given the valuation of buildings, godown, staff quarters, function hall, plant & machinery etc for assessment year 2015-16 at Rs.18,55,98,058/-. This valuation report is submitted by the Joint District Registrar i.e. Mudrank Zilhadhikari vide letter dated 30.04.2021 which is on record. However, the plant & machinery has been sold by Printed from counselvise.com 3 ITA No.650/PUN/2024 the assessee at Rs.13,74,63,267/- (excluding VAT) as per the entry in the books of the assessee. This fact is also clear from the copy of the ledger of Arjun Sugar Industries Ltd., Jalna in the books of the assessee. Thus, there is a difference of Rs.4,81,34,791/- (Rs.18,55,98,058/- - Rs.13,74,63,267/-) between the fair market value of plant & machinery and the actual sale price of the machinery. The assessee company has sold the plant & machinery and buildings at less than the fair market value / government valuation. The aforesaid difference amount of Rs.4,81,34,791/- needs to be brought to tax accordingly. However, this issue has not been considered by the Assessing Officer while completing the assessment proceedings u/s 153A of the Act. He, therefore, was of the opinion that the omission on the part of the Assessing Officer to examine and conduct enquiry in respect of this specific issue has resulted in under-assessment of the income in the hands of the assessee for which the order passed u/s 153A of the Act on 02.06.2021 for assessment year 2015-16 is prima facie erroneous in so far as it is prejudicial to the interest of Revenue. He, therefore, issued a show cause notice asking the assessee to explain as to why the order passed u/s 153A of the Act should not be set aside as per provisions of section 263 of the Act. 4. The assessee in response to the said show cause notice filed elaborate submissions along with various case laws stating that the Assessing Officer while passing the order has verified all the details and therefore, the assessment order is Printed from counselvise.com 4 ITA No.650/PUN/2024 not erroneous. It was accordingly requested to drop the proceedings u/s 263 of the Act. 5. However, the Ld. PCIT was not satisfied with the arguments advanced by the assessee and set aside the order passed u/s 153A / 143(3) of the Act to the file of the Assessing Officer with a direction to consider the specific issues and make necessary enquiries to ascertain the facts and pass the assessment order in accordance with law after providing due opportunity of being heard to the assessee. The relevant observations of the Ld. PCIT read as under: Printed from counselvise.com 5 ITA No.650/PUN/2024 Printed from counselvise.com 6 ITA No.650/PUN/2024 Printed from counselvise.com 7 ITA No.650/PUN/2024 Printed from counselvise.com 8 ITA No.650/PUN/2024 6. Aggrieved with such order of the Ld. PCIT, the assessee is in appeal before the Tribunal by raising the following grounds: Printed from counselvise.com 9 ITA No.650/PUN/2024 1. THE CHALLENGE TO THE JURISDICTION ASSUMED BY THE PCIT (CENTRAL) 1.1 The Learned Principal Commissioner of Income Tax (Central), Nagpur ['the Ld PCIT] has erred in assuming jurisdiction to revise the assessment order passed u/s 153A of the Income tax Act, 1961 ['the Act'] after taking prior approval of the Joint Commissioner of Income Tax u/s 153D of the Act. 1.2 Without prejudice to the above, on the facts and circumstances of the case and in law, the Ld. PCIT is not empowered u/s 263 to exercise jurisdiction where the larger issue is raised in appeal against the assessment order. 1.3 In the aforesaid circumstances, it is humbly prayed that the order u/s 263 is without jurisdiction and deserves to be quashed. WITHOUT PREJUDICE TO THE ABOVE 2. THE CHALLENGE TO REVISION OF THE JURISICTIONLESS ASSESSMENT ORDER 2.1 The Ld. PCIT has erred in initiating the proceedings u/s 263 of the Act and revising the assessment order which itself is without jurisdiction and invalid. 2.2 The Ld. PCIT erred in assuming jurisdiction in revising the invalid and illegal assessment order. 2.3 In the facts and circumstances and in law the Ld. PCIT has erred in revising the assessment and therefore it is prayed to quash the order passed u/s 263 of the Act. WITHOUT PREJUDICE TO THE ABOVE 3. REVISION ILLEGAL 3.1 The Ld. Pr. CIT erred in passing the order u/s 263 of the Act, revising the assessment order passed by the AO u/s 143(3) of the Act. 3.2 It is submitted that in the facts and circumstances of the case, and in law, the order is bad, illegal and void as necessary preconditions for initiating the revision proceedings as well as the completion thereof were not fulfilled. a. Without prejudice to the generality above, the Pr. CIT failed to appreciate that: Printed from counselvise.com 10 ITA No.650/PUN/2024 i. The assessment order framed was not \"erroneous\" within the meaning of section 263 of the Act. ii. Even otherwise, there was no lack of investigation/inquiry and non application of mind on the part of the AO while framing the assessment order, and iii. In any case, the assessment order was not \"prejudicial to the interest of the revenue\" within the meaning of section 263 of the Act. 3.3 While doing so, the Ld. Pr. CIT has failed to appreciate that the assessment order passed u/s 143(3) is neither erroneous and not prejudicial to the interest of the revenue. 3.4 On the facts and in the circumstances of the case, the order passed by the Ld. Pr. CIT u/s 263 of the Act is void ab initio and deserves to be set aside. 35. Without prejudice to the above, otherwise also, it is submitted that in the facts and in the circumstances of the case, and in law, on merits also, no revision u/s 263 of the Act was called for. 7. The Ld. Counsel for the assessee submitted that since the order has been passed u/s 153A on 02.06.2021 after prior approval of the JCIT, therefore, the PCIT could not have revised the same u/s 263 of the I T Act, 1961. Referring to the decision of the Hon’ble Madhya Pradesh High Court in the case of PCIT vs. Prakhar Developers (P.) Ltd. reported in (2024) 162 taxmann.com 48 (MP), he submitted that the Hon’ble High Court in the said decision has held that an order of assessment passed under section 153A read with section 143(3) after getting an approval of the Jt. Commissioner under section 153D could not be revised under section 263 of the Act. He submitted that similar view has been taken by the Patna Bench of the Tribunal in the case of Gyan Printed from counselvise.com 11 ITA No.650/PUN/2024 Infrabuild Private Limited vs. PCIT vide ITA Nos.175 to 178/Pat/2023 order dated 13.05.2024 for assessment years 2015-16 to 2018-19 and by the Pune Bench of the Tribunal in the case of Ramamoorthy Vasudevan vs. PCIT vide ITA Nos.967 & 968/PUN/2016, order dated 29.11.2018 for assessment years 2008-09 and 2009-10. 8. The Ld. Counsel for the assessee submitted that the Pune Bench of the Tribunal in the case of Dhariwal Industries Ltd. vs. CIT vide ITA Nos.1108 to 1113/PUN/2014, order dated 23.12.2016 for assessment years 2004-05 to 2006-07 & 2008-09 to 2010-11 has also held that the CIT has no power to revise the order u/s 263 in a case where the same has been passed with the approval of the Addl.CIT u/s 153D of the Act. 9. Referring to the decision of the Delhi Bench of the Tribunal in the case of Devender Kumar Gupta vs. PCIT reported in (2024) 166 taxmann.com 95 (Delhi – Trib), he submitted that the Tribunal in the said decision has held that an order of assessment passed u/s 153A r.w.s. 143(3) of the Act after getting an approval of the Jt. Commissioner u/s 153D of the Act could not be revised u/s 263 of the Act without giving a finding that prior approval u/s 153D was vitiated and was also erroneous in so far as it is prejudicial to the interest of Revenue. Printed from counselvise.com 12 ITA No.650/PUN/2024 10. Referring to the decision of the Delhi Bench of the Tribunal in the case of Alankit Associates Pvt. Ltd. vs. PCIT vide ITA No.2051/PUN/2024 vide order dated 25.11.2024 for assessment year 2013-14 he submitted that the Tribunal in the said decision has also held that the revision order passed u/s 263 of the Act is liable to be quashed since the same has been passed after obtaining the necessary approval from the Addl. CIT u/s 153D of the Act. 11. The Ld. Counsel for the assessee in his next plank of argument submitted that no incriminating material was brought on record by the Assessing Officer despite specific objections. Even in the remand report the Assessing Officer has vaguely referred to the entire Annexure-A without pointing out any specific incriminating document. He submitted that the objection of no incriminating material found was also taken before the Ld. PCIT. However, he failed to bring on record any incriminating material. Referring to the written submissions filed by the Ld. DR, he submitted that he has also made only general reference without identifying any specific incriminating material. He submitted that for the first time before the Tribunal the Ld. DR produced the valuation report of the Joint Sub- Registrar, Jalna dated 02.05.2014 alleging it to be the incriminating material. However, the valuation report fails both on legal principle and on merits. 12. So far as the legal principle is concerned, he submitted that every document found during the course of search cannot be incriminating material unless such Printed from counselvise.com 13 ITA No.650/PUN/2024 document remains undisclosed, unexplained, uncorroborated and most importantly depicts some undisclosed income. The valuation report is a document issued by the government authority and not a document prepared by the assessee. Further, the valuation report is merely an estimate of circle rate as a guideline for stamp duty and does not represent the market value. 13. So far as the merit of the valuation report is concerned, he submitted that as per the valuation report (excluding serial No.22 as it was transferred on 16.09.2013) the stamp duty valuation is Rs.28,05,78,000/- as on 03.05.2014 for the lands transferred. However, the actual consideration for the same is Rs.27,58,86,733/- and the variation is merely 1.70% which is within the safe harbour limits of 10% as per first proviso to section 43CA(1). 14. Referring to the decision of the Pune Bench of the Tribunal in the case of Sai Bhargavanath Infra vs. ACIT vide ITA Nos.1332/PUN/2019 vide order dated 17.08.2022 for assessment year 2015-16, he submitted that the Tribunal in the said decision has held that the application of first proviso to section 43CA of the Act is having retrospective effect. 15. He also relied on the following decisions: i) Shri Krishnaraj Build Home Pvt. Ltd. vs. ITO vide ITA Nos.752 & 753/JPR/2023, order dated 14.02.2024 ii) M/s. Reegal Construction vs. ITO vide ITA No.354/Kol/2023, order dated 13.07.2023 for assessment year 2015-16 Printed from counselvise.com 14 ITA No.650/PUN/2024 iii) Bal Kishan Gupta vs. ACIT (2023) 152 taxmann.com 567 (Delhi – Trib.) iv) Naina Saraf vs. PCIT vide ITA No.271/JP/2020, order dated 14.09.2021 for assessment year 2015-16 which has been affirmed by the Hon’ble Rajasthan High Court. 16. Referring to the decision of the Delhi Bench of the Tribunal in the case of DCIT vs. Martial Buildcom P. Ltd. vide ITA Nos.2677 & 2678/Del/2023, order dated 31.01.2024 he submitted that the valuation report of the DVO cannot be the incriminating material. 17. He submitted that none of the lower authorities and the Ld. DR has alleged that the sale deed found during the search is incriminating material. He submitted that the transaction was duly recorded in the books of account and in the return of income. The consideration has been received through banking channel and there is no allegation of any unaccounted income. The registered sale deed is a public document and the registrar is mandatorily supposed to report such transactions to the Income Tax Department as per provisions of section 285BA of the Act. He submitted that sale deed / Index II depicts 2014 valuation whereas undisputedly the valuation of 2012 applies to the instant case. 18. Referring to the decision of the Delhi Bench of the Tribunal in the case of Lord Krishna Dwellers (P) Ltd. vs. DCIT vide ITA No.5294/Del/2013 order dated Printed from counselvise.com 15 ITA No.650/PUN/2024 17.12.2018, he submitted that when the sale deed transaction is duly recorded in the books of account, the same cannot be considered as incriminating material. 19. Referring to the decision of the Hon’ble Madras High Court in the case of CIT vs. Smt. Padmavathi reported in (2020) 120 taxmann.com 187 (Mad), he submitted that revision u/s 263 of the Act cannot be made merely on the ground of valuation difference. 20. The Ld. Counsel for the assessee referring to pages 121 to 124 of the paper book submitted that the Ld. PCIT has wrongly compared the building valuation of Rs.18.55 crore with machinery sale consideration of Rs.13.74 crore and alleged a difference of Rs.4.81 crore. He submitted that the foundation of revision itself is flawed and based on erroneous appreciation of facts or incorrect appreciation of record. Therefore, revision cannot stand if the jurisdiction is assumed on erroneous facts. For the above proposition, he relied on the decision of Ahmedabad Bench of the Tribunal in the case of Nirav Chandrakantbhai Bhalani vs. PCIT vide ITA No.1041/Ahd/2024, order dated 06.08.2024. 21. Without prejudice to the above, the Ld. Counsel for the assessee submitted that the Ld. PCIT has initiated revision proceedings on the basis of valuation report for 2014 whereas it is an admitted fact that the valuation of 2012 is applicable and not of 2014. He did not bring on record the valuation for 2012 or any other document to allege that there is a valuation difference. He submitted that the Ld. Printed from counselvise.com 16 ITA No.650/PUN/2024 PCIT has initiated revision merely on the suspicion of a valuation difference in the transfer of the building without any material on record. 22. Referring to the decision of Hon’ble Bombay High Court in the case of CIT vs. Gabriel India Ltd. reported in (1993) 203 ITR 108 (Bom), he submitted that the revision u/s 263 of the Act is invalid if made without any material on record and for fishing and roving inquiries. 23. The Ld. Counsel for the assessee drew the attention of the Bench to pages 62 to 67 of the paper book and pages 70 to 71 of the paper book and submitted that during the course of assessment proceedings the Assessing Officer has made specific enquiry regarding the valuation difference of Rs.69.99 crore consisting of Rs.51.43 crore of land and Rs.18.56 crore of building. After considering the detailed submission by the Ld. Counsel for the assessee the Assessing Officer was satisfied with respect to valuation of building and made addition only with respect to difference in valuation of land. 24. Referring to the decision of Hon’ble Madras High Court in the case of Arul Industries vs. ACIT reported in (2025) 177 taxmann.com 607 (Mad), he submitted that where the Assessing Officer had made enquiry even through inadequate the Commissioner could not assume jurisdiction u/s 263 of the Act. Printed from counselvise.com 17 ITA No.650/PUN/2024 25. Referring to the decision of the Pune Bench of the Tribunal in the case of Krishi Utpanna Bazar Samittee vs. DCIT vice versa vide ITA Nos.2043/PN/2012 and 2166/PN/2012, order dated 20.03.2014 for assessment year 2008-09, he drew the attention of the Bench to para 10 of the order and submitted that the Tribunal in the said decision has held that in view of the circular dated 30.06.2005 issued by the Government of Maharashtra for the purpose of payment of stamp duty, the highest price in the sale auction is considered to be the fair market value. The Tribunal has held that the consideration stated in the sale deed is to be accepted as the fair market value for the purpose of payment of stamp duty and not the price worked out as per the ready reckoner. 26. Referring to the decision of the Delhi Bench of the Tribunal in the case of Smt. Abha Bansal vs. PCIT reported in (2021) 132 taxmann.com 231 (Delhi – Trib.), he submitted that the Tribunal in the said decision has held that where the Assessing Officer accepted claim of the assessee that compensation received on account of cancellation of agreement for purchase of villa due to non-delivery of villa to the assessee within stipulated time was capital receipt and chargeable to tax as capital gains, since entire material on record clearly showed that the Assessing Officer had applied his mind before passing the said order, even if details of enquiry were not mentioned in assessment order, same would not make assessment order cryptic or liable for revision under section 263. Printed from counselvise.com 18 ITA No.650/PUN/2024 27. Referring to the decision of the Hon’ble Madras High Court in the case of CIT vs. Smt. Padmavathi reported in (2020) 120 taxmann.com 187 (Mad), he submitted that the Hon’ble High Court in the said decision has held that guideline value is only an indicator and same is fixed by the State Government for purpose of calculating stamp duty on a deal of conveyance and merely because guideline value was higher than the sale consideration shown in deed of conveyance, it cannot be a sole reason for holding that assessment was erroneous and prejudicial to interest of revenue. He submitted that the Hon’ble High Court has further held that where the Commissioner, while invoking his power under section 263, faults with Assessing Officer on ground that he did not make proper enquiry, in absence of any clarity as to why in opinion of Commissioner, enquiry was not proper, invocation of power under section 263 was not justified. The Ld. Counsel for the assessee drew the attention of the Bench to para 18 of the order which reads as under: “18. The PCIT, has not dealt with this specific objection, but, would fault the assessing officer for not invoking Section 56(2)(vii)(b)(ii) merely on the ground that the market value was higher. As pointed out earlier, the guideline value is only an indicator and that will always not represent the fair market value of the property and therefore, the invocation of the power under section 263 of the Act by the PCTT is not sustainable in law.” 28. Referring to the decision of the Chennai ‘C' Bench of the Tribunal in the case of Shri Gaurav Dugar vs. PCIT vide ITA No.948/CHNY/2024 vide order dated 30.08.2024 for assessment year 2014-15, he submitted that the Tribunal, following the decision of the Hon’ble Madras High Court in the case of CIT vs. Printed from counselvise.com 19 ITA No.650/PUN/2024 Smt. Padmavathi (supra), has held that the revision is not possible merely because guideline value was higher than the sale consideration shown in the deed of conveyance and hence the same cannot be a sole reason for holding the assessment as erroneous in so far as prejudicial to the interest of Revenue. 29. Referring to the decision of the Mumbai Bench of the Tribunal in the case of Renukamata Multi State Coop Urban Credit Society Ltd. vs. ACIT vide ITA Nos.4001 & 4002/Mum/2019, vide order dated 06.02.2023 for assessment years 2010-11 & 2011-12, he submitted that the Tribunal in the said decision has held that if an assessee has recorded transactions in his books or other documents maintained in the ordinary course, then in order to hold the material or evidence found in the course of search to be incriminating in nature, the seized documents/evidences should lead to the conclusion that the entries made in the books of the assessee do not represent the true and correct state of affairs of the assessee. Rather the evidence unearthed or found in the course of search should establish that the real transaction of the assessee was something different than what was recorded in the regular books and therefore the entries in the books did not represent true and correct state of affairs i.e. the assessee has undisclosed income/expense outside the books or that the assessee is conducting income earning activity outside the books of accounts or all the revenue earning activities are not disclosed to the tax authorities in the books regularly maintained or the returns filed with the authorities from time to time, etc. It has further been held Printed from counselvise.com 20 ITA No.650/PUN/2024 that every seized material or document / information cannot be held to be incriminating in nature, capable of justifying the additions in unabated assessments, unless the Assessing Officer brings on record further corroborative material or evidence to substantiate his suspicion and conclude that the transaction reflected in regular books or documents did not represent the true state of affairs. 30. Referring to the decision of the Hon’ble Supreme Court in the case of PCIT vs. Abhisar Buildwell (P.) Ltd. reported in (2023) 454 ITR 212 (SC), the Ld. Counsel for the assessee submitted that unabated assessment cannot be reopened u/s 153A of the IT Act unless any incriminating material is found. He drew the attention of the Bench to clause (iv) of para 14 of the order which reads as under: “(iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved.” 31. So far as the merit of the case is concerned, he submitted that the auction was allotted to the assessee on 05.03.2015 and an agreement to sell with the purchaser was entered into on 23.11.2012 (preliminary) and on 03.12.2012 (final). The sale certificate by the auctioneer was issued on 03.12.2012 and the property’s highest bid of the auction depicts fair market value of the property. He submitted Printed from counselvise.com 21 ITA No.650/PUN/2024 that the highest bid of the assessee was Rs.28,83,34,349/- and the actual sale consideration is Rs.29,10,37,733/- and the same is higher than the fair market value. Therefore, the provisions of section 43CA of the Act do not apply. For the above proposition, he relied on the decision of the Pune Bench of the Tribunal in the case of Krishi Utpanna Bazar Samittee vs. DCIT vide ITA No.2043/PUN/2012 order dated 20.03.2014. Relying on various other decisions he submitted that the order passed u/s 263 by the Ld. PCIT is not justified and is liable to be set aside. 32. The Ld. DR on the other hand heavily relied on the order of the Ld. PCIT. Referring to the decision of the Ahmedabad Bench of the Tribunal in the case of DCIT vs. Jankhit Chandulal Prajapati vide IT(SS)A Nos.121 & 122/Ahd/2023 order dated 08.08.2025 he drew the attention of the Bench to the following observations at para 7 of the order: “In fact, the word \"incriminating” is nowhere defined under the Income Tax Act. The provision of section 153A of the Act, only refers to books of accounts or other documents or assets or evidences found during the search and which has a bearing on the total income of the assessee. The dictionary meaning of the word \"incriminating\" is making it seem that someone is guilty, especially of a crime\". Therefore, any evidence found during the search, which has a bearing on the income of the assessee and which is not correctly disclosed to the Department, will be in the nature of 'incriminating material’. Such incriminating material found in the course of search can be any form of evidence such as a document, an entry in the books of accounts, an asset, a statement given on oath, absence of any fact claimed earlier but not found during the course of search etc. Any fact or evidence which suggests that documents/transactions claimed or submitted in any old proceedings were not genuine, fulfilling the ingredients of undisclosed income, shall constitute an incriminating material.” 33. Referring to the decision of Jaipur Bench of the Tribunal in the case of Spytech Buildcon vs. ACIT reported in (2021) 190 ITD 325 (Jaipur-Trib.), he Printed from counselvise.com 22 ITA No.650/PUN/2024 submitted that the Tribunal in the said decision has held that where the assessee entered into an agreement for sale of flats with customer prior to 01.04.2013, however, sale deeds were executed after 01.04.2013 provisions of section 43CA will be applicable and, merely because an agreement had taken place prior to 01.04.2013 it would not take away the transaction from the ambit of provisions of section 43CA which were applicable for assessment year 2014-15 under consideration. 34. Referring to the decision of Hon’ble Supreme Court in the case of T.N. Civil Supplies Corporation Ltd. vs. CIT reported in (2003) 260 ITD 82 (SC), he submitted that the Hon’ble Supreme Court in the said decision has held that there was no scope for limiting the phrase 'order passed by the Income-tax Officer' in section 263 to exclude orders passed by the ITO on the directions of a superior authority either under section 144A or 144B. 35. Referring to the decision of the Delhi Bench of the Tribunal in the case of Kapil Mehta vs. PCIT vide ITA No.533/Del/2021 order dated 11.10.2021 for assessment year 2017-18, he submitted that the Tribunal in the said decision has held that where the assessment has been framed u/s 153A of the Act or section 153C, the same will not go out of the ambit of the provisions of section 263 of the Act. Printed from counselvise.com 23 ITA No.650/PUN/2024 36. Referring to the decision of the Hon’ble Punjab & Haryana High Court in the case of Osho Forge Ltd. vs. CIT reported in (2019) 410 ITR 198 (P&H), he submitted that the Hon’ble High Court in the said decision has held that section 153D is only applicable for passing an assessment order or re-assessment order, however, there is no requirement under section 153D of the Act for prior approval for complying with remand directions. He accordingly submitted that since the order of PCIT is an elaborate one and in accordance with law, therefore, the same should be upheld. 37. The Ld. Counsel for the assessee in his rejoinder submitted that in Jankhit Chandulal Prajapati (supra), incriminating digital data was seized reflecting unsecured loans / advances of 235.56 crores from Kolkata-based companies, which were independently found to be shell entities. Statements of entry operators and third-party enquiries clearly established the accommodation entry nature of transactions. However, in the present case, the seized documents comprise a registered Sale Deed, Index II, Agreement to Sale and all the documents relating to auctioned properties, all of which are disclosed documents and duly reflected in the books of account and supported by banking channel payments. The only difference is a minor variation of 1.70% in valuation, which is well within the statutory safe harbour tolerance under section 43CA. No evidence whatsoever of unaccounted cash, on-money, or bogus entries has been found. Thus, unlike Jankhit's case (supra), where seized material directly established undisclosed Printed from counselvise.com 24 ITA No.650/PUN/2024 income, in the present case, the seized material is non-incriminating and only corroborates disclosed transactions. Therefore the reliance placed by Revenue on Jankhit Chandulal Prajapati (supra) is misplaced, and the ratio of the said case does not apply to the facts of the present case. So far as the decision in the case of Kapil Mehta (supra) of Delhi Bench of the Tribunal is concerned, he submitted that subsequent to the said decision, the Co-ordinate Benches of the Tribunal at Delhi in various decisions have held that revision order passed u/s 263 is liable to be quashed when the same has been passed after obtaining prior approval of the JCIT/Addl. CIT u/s 153D of the I.T. Act, 1961. 38. He further submitted that the Ld. DR has stated that wrong facts do not vitiate the revision proceedings. He submitted that jurisdiction was assumed on erroneous appreciation of facts. The foundation of revision itself is defective. Such a jurisdictional defect is fatal. Hence, the revision is invalid. 39. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. PCIT and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer vide notice u/s 142(1) of the Act dated 16.11.2020 copy of which is places at pages 62 to 67 of the paper book has raised the following queries: Printed from counselvise.com 25 ITA No.650/PUN/2024 Printed from counselvise.com 26 ITA No.650/PUN/2024 Printed from counselvise.com 27 ITA No.650/PUN/2024 Printed from counselvise.com 28 ITA No.650/PUN/2024 40. Further the Assessing Officer vide notice u/s 142(1) of the Act dated 08.03.2021 copy of which is placed at pages 68 to 69 of the paper book has raised the following query: 41. Similarly the Assessing Officer vide notice u/s 142(1) of the Act dated 19.04.2021, copy of which is placed at pages 70 and 71 of the paper book has raised the following query: Printed from counselvise.com 29 ITA No.650/PUN/2024 42. We find the assessee in response to notice dated 16.11.2020 vide letter dated 01.02.2021 has given the following submissions: Printed from counselvise.com 30 ITA No.650/PUN/2024 Printed from counselvise.com 31 ITA No.650/PUN/2024 Printed from counselvise.com 32 ITA No.650/PUN/2024 Printed from counselvise.com 33 ITA No.650/PUN/2024 Printed from counselvise.com 34 ITA No.650/PUN/2024 43. Similarly we find the assessee vide letter dated 12.05.2021 in response to notices dated 19.04.2021 and 26.04.2021 issued u/s 142(1) of the Act has given the following submissions before the Assessing Officer: Printed from counselvise.com 35 ITA No.650/PUN/2024 Printed from counselvise.com 36 ITA No.650/PUN/2024 Printed from counselvise.com 37 ITA No.650/PUN/2024 Printed from counselvise.com 38 ITA No.650/PUN/2024 Printed from counselvise.com 39 ITA No.650/PUN/2024 44. We find on the basis of these submissions the Assessing Officer has completed the assessment u/s 143(3) of the Act. Under these circumstances, we have to see as to whether the order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of Revenue so as to enable the Ld. PCIT to invoke jurisdiction u/s 263 of the Act. It is an admitted fact that the order has been passed u/s 153A of the Act after obtaining the due approval u/s 153D of the Act. 45. We find the Hon’ble Bombay High Court in the case of CIT vs. M/s. Fine Jewellery (India) Ltd. (2015) 372 ITR 303 (Bom) at para 8 of the order has observed as under: “8. We find that the impugned order of the Tribunal does record the fact that specific queries were made during the Assessment proceedings with regard to details of expenditure claimed under the head “miscellaneous expenses” aggregating to Rs.2.94 crores. The respondent-assessee had responded to the same and on consideration of response of the respondent-assessee, the Assessing Officer held that of an amount of Rs.17.98 lakhs incurred on account of repairs and maintenance out of Rs.2.94 cores is capital expenditure. This itself would be indication of application of mind by the Assessing Officer while passing the impugned order. The fact that the assessment order itself does not contain any discussion with regard to the balance amount of expenditure of Rs.1.76 crores i.e. Rs.2.94 crores less Rs.17.98 lakhs claimed as revenue expenditure would not by itself indicate non application of mind to this issue by the Assessing Officer in view of specific queries made during the assessment proceedings and the Respondent- assessee's response to it. In fact this Court in the case of “Idea Cellular Ltd. Vs. Deputy Commissioner of Income Tax & Ors., [(2008) 301 ITR 407 (Bom.)]” has held that if a query is raised during assessment proceedings and responded to by the Assessee, the mere fact that it is not dealt with in the Assessment Order would not lead to a conclusion that no mind had been applied to it.” 46. We find the Hon’ble Bombay High Court in the case of Gabriel India Ltd. [1993] 203 ITR 108 (Bom) has observed as under: Printed from counselvise.com 40 ITA No.650/PUN/2024 “The consideration of the Commissioner as to whether an order is erroneous in so far as it is prejudicial to the interests of the Revenue, must be based on materials on the record of the proceedings called for by him. If there are no materials on record on the basis of which it can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well- accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi- judicial controversies as it must in other spheres of human activity.” 47. We find the Hon’ble Delhi High Court in the case of CIT Vs. Sunbeam Auto reported in 332 ITR 167 (Del.) has made a distinction between lack of inquiry and inadequate inquiry. The Hon’ble High Court held that where the Assessing Officer has made inquiry prior to the completion of assessment, the same cannot be set aside u/s 263 on the ground of inadequate inquiry. The relevant observations of the Hon’ble High Court read as under: “12.2 Delhi High Court in the case of CIT Vs. Sunbeam Auto 332 ITR 167 (Del.), made a distinction between lack of inquiry and inadequate inquiry. The Hon’ble court held that where the AO has made inquiry prior to the completion of assessment, the same cannot be set aside u/s 263 on the ground of inadequate inquiry: “12.….. There are judgments galore laying down the principle that the Assessing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between “lack of inquiry” and “inadequate inquiry”. If there was any inquiry, even inadequate, that would not by itself, give occasion to the Commissioner to pass orders under section 263 of the Act, merely because he has different opinion in the matter. It is only in cases of “lack of inquiry”, that such a course of action would be open. —— — From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer Printed from counselvise.com 41 ITA No.650/PUN/2024 acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualised where the Incometax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at conclusion and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion. There must 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 been imposed. 15. Thus, even the Commissioner conceded the position that the Assessing Officer made the inquiries, elicited replies and thereafter passed the assessment order. The grievance of the Commissioner was that the Assessing Officer should have made further inquires rather than accepting the explanation. Therefore, it cannot be said that it is a case of ‘lack of inquiry’.” 48. It has been held in various decisions that when the Assessing Officer has raised specific query on the issue and the assessee had given the reply to the same and the Assessing Officer after considering the reply of the assessee has passed the order u/s 143(3) of the Act, the same cannot be set aside by the PCIT by invoking jurisdiction u/s 263 of the Act since it is not a case of lack of enquiry but may be an inadequate inquiry. Since the Assessing Officer in the instant case has raised specific queries regarding the sale of assets at less than the circle rate to which the Printed from counselvise.com 42 ITA No.650/PUN/2024 assessee had replied and the Assessing Officer, after considering the reply of the assessee, has accepted the submissions made by the assessee, therefore, it is not a case of lack of enquiry, therefore, the Ld. PCIT in our opinion could not have set aside the order u/s 263 of the Act. 49. We further find the Chennai Bench of the Tribunal in the case of Shri Gaurav Dugar vs. PCIT (supra) has held that revision is not possible merely because guideline value was higher than the sale consideration shown in the deed of conveyance and hence the same cannot be a sole reason for holding the assessment as erroneous in so far as prejudicial to the interest of Revenue. The relevant observations of the Tribunal read as under: “10. As regards to second facet of argument made by the learned counsel for the assessee is that issues under revision are on simplicitor valuation of stamp duty and simplicitor valuation done on the guideline value adopted by the stamp valuation authority, which is just an estimate and cannot be subject matter of revision u/s.263 of the Act. We noted that this issue has been considered by the co- ordinate Bench of this Tribunal in the case of Shri Shanmuga Sundaram Govindaraj Vs ACIT in ITA No.377/Chny/2021 dated 22.07.2022, wherein the Tribunal considering the decision of co-ordinate Bench of Mumbai Tribunal in the case of Maria Fernandas Cheryl Vs.ITO (2021) 85 ITR (T) 674 (Mumbai Trib) and thejudgement of the Hon'ble Supreme Court in the case of C.B.Gautam Vs. Union of India (1993) 199 ITR 530 (SC), exactly on identical facts held as under:- “7.2 Further, as discussed by Hon’ble Madras High Court in the case of CIT vs. Smt. Padmavathi, [2020] 120 taxmann.com 187 (Madras), considering the very issue of revision proceedings u/s.263 of the Act, noted that in case there is some difference between the sale consideration as per sale deed and the guideline value fixed by Stamp Valuation Authority and merely because guideline value was higher than the sale consideration shown in the sale deed, it cannot be sole reason for holding that the assessment is erroneous and prejudicial to the interest of Revenue. Hon’ble Madras High Court in para 16 held as under:- Printed from counselvise.com 43 ITA No.650/PUN/2024 16. The only reason for setting aside the scrutiny assessment was on the ground that the guide line value of the property, at the relevant time, was higher than the sale Consideration reflected in the registered document. The question would be as to what is the effect of the guideline value fixed by the State Government. There are long line of decisions of the Hon'ble Supreme Court holding that guideline value is only an indicator and the same is fixed by the State Government for the purposes of calculating stamp duty on a deal of conveyance. Therefore, merely because the guideline was higher than the sale consideration shown in the deed of conveyance, cannot be the sole reason for holding that the assessment is erroneous and prejudicial to the interest of revenue. 7.3 In view of the above, in the present case before us, the issue is whether assessment framed by the AO is erroneous and prejudicial to the interest of Revenue for the reason that there is difference of Rs.25 lakhs between the guideline value as per stamp valuation which is Rs.3.50 crores. However, as per registered sale deed the actual consideration is Rs.3.25 crores. The assessee has disclosed the investment as per consideration declared in sale deed at Rs.3.25 crores but the PCIT was of the view that the difference of Rs.25 lakhs in view of the guideline value fixed by Stamp Valuation Authority at Rs.3.50 crores is to be accepted and added to the return of income of the assessee. We are of the view that this is highly debatable issue and even the tolerance limit of 10% is to be considered or not is again a debate. Once there is a debate, the order cannot be held as erroneous in view of the decision of Hon’ble Supreme Court in the case of Malabar Industrial Co. Ltd., vs. CIT, (2000) 243 ITR 83. Hence, we quash the revision proceedings and allow the appeal of assessee.” 11. In view of the above, we are the view that issues raised by the Pr.CIT in regard to difference between the stamp duty value and documentary value for purchase and sale of lands and acquiring of the properties during financial year 2013-14 relevant to the assessment year 2014-15 by the assessee is nothing but an estimate and this is highly debatable issue. Even, the Hon’ble Madras High Court in the case of CIT Vs. Mrs.Padmavathy (supra) has considered an identical issue and therefore, held that revision is not possible merely because guideline value was higher than the sale consideration shown in the deed of conveyance and hence, same cannot be sole reason for holding that assessment is erroneous, insofar as prejudicial to the interests of the revenue. Hence, we quash the revision order on this facet also. 12. In view of the above discussion and facts of the case, we hold that revision order passed by the Pr.CIT u/s.263 of the Act is bad in law and hence, quashed.” Printed from counselvise.com 44 ITA No.650/PUN/2024 50. We find the Delhi Bench of the Tribunal in the case of Devender Kumar Gupta vs. PCIT (supra) has held that an order of assessment passed u/s 153A r.w.s. 143(3) of the Act after getting an approval of the Jt. Commissioner u/s 153D of the Act could not be revised u/s 263 of the Act without giving a finding that prior approval u/s 153D was vitiated and was also erroneous so far as prejudicial to the interest of Revenue. The relevant observations of the Tribunal read as under: “7. We have given thoughtful consideration to this aspect of the controversy and we find that a specific ground No.2 is raised by the assessee as follows:- “2. That the asstt. Order passed u/s 153A r.w.s. 143(3) after getting an approval of Addl. Commissioner U/s 153D could not be revised u/s 263, hence Ld. PCIT exceeded his jurisdiction in invoking Sec.263 in respect of impugned asstt. Order framed u/s 153A r.w.s. 153D.” 8. The assessment orders make it categorical that the same are passed with statutory approval of Addl. Commissioner of Income-tax, Central Range, Gurgaon communicated vide his office letter F. No. Addl.CIT(CR)/GGM/2021- 22/664 dated 24.09.2021 in accordance with section 153D of the Income Tax Act. 9. We find that in the impugned order the ld. PCIT has not taken account of the fact that the assessments were completed after prior approval of the competent authority. Thus, we are of the considered view that at the time of examining the issue as to if the assessment order is erroneous so far as prejudicial to the interest of the Revenue, the ld. revisional authority is not only supposed to see the assessment record of AO, but also the record of the approval which as far as the revisional authority is concerned becomes “record” of the quasi judicial authority whose order is being examined by invoking the revisional jurisdiction. Therefore, without giving a finding that the prior approval u/s 153D was vitiated and was also erroneous so far as prejudicial to the interest of the Revenue, the assessment order independently cannot be held to be erroneous so far as prejudicial to the interest of the Revenue. 9.1 The catena of judicial pronouncements relied by the ld. AR have also laid down the same proposition of law and we will like to refer specifically to the judgement of the Hon’ble Madras High Court in the case of PCIT vs. Prakhar Developers (P) Ltd. (supra) where the Hon’ble Madras High Court has taken into consideration the fact that the Pune Bench order in the case of Ramamoorthy Printed from counselvise.com 45 ITA No.650/PUN/2024 Vasudevan v. PCIT [IT Appeal Nos. 967 & 968/Pune/2016] wherein it was held that the order passed by the PCIT is unsustainable due to lack of jurisdiction in invoking section 263 of the Act for the reason that the same was passed upon taking prior approval u/s 153A of the Act, was not challenged by the Department before the Hon’ble High Court or the Hon’ble Supreme Court and, thus, the Hon’ble Madras High Court in its judgement dated 01.04.2024 has held as follows:- “8. Even otherwise, as per Section 263 of the Act, the Principal Chief Commissioner or Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act and if he considers that any order passed therein by the Assessing Officer, is erroneous in so far as it is prejudicial to the interests of the Revenue, he may make enquiry as he deems necessary, pass such order thereon as the circumstances of the case justify. For passing any order under Sections 143(3) & 153A of the Act, prior approval of Joint Commissioner is required under Section 153A of the Act, or Principal Commissioner or Commissioner as the case may be. Therefore, once prior approval had already been taken by the Assessing Officer and accepted the return submitted by the assessee, then the same authority cannot exercise the power under Section 263 of the Act to reverse the order of Assessing Officer.” 10. The judgement which the ld. DR has relied is not applicable as in that judgement, this aspect was not actually examined at all and only for the reason that there also the impugned assessment order was passed u/s 153A of the Act, does not lay down a view contrary to the one we are relying above. 11. In the light of the aforesaid discussion, we are inclined to allow grounds No.2 and 3 for AYs 2015-16 and 2016-17; and ground No.3 in AYs 2017-18 and 2018- 19. Consequently, the appeals are allowed and the impugned orders in respective years are quashed.” 51. It is an admitted fact that the Assessing Officer in the instant case has raised certain queries on the issue of valuation of the properties to which the assessee has replied and thereafter the Assessing Officer has passed the order with the prior approval of the JCIT / Addl.CIT u/s 153D of the Act. Further, the Ld. PCIT in the instant case has assumed jurisdiction u/s 263 only on the ground that the guideline values of the building/plant & machinery are higher than the sale consideration. Therefore, in view of our discussion in the preceding paragraphs and relying on the Printed from counselvise.com 46 ITA No.650/PUN/2024 decisions cited (supra), we are of the considered opinion that the Ld. PCIT was not justified in assuming jurisdiction u/s 263 of the I.T. Act, 1961. We, therefore, set aside the order passed u/s 263 by the Ld. PCIT. The grounds raised by the assessee are accordingly allowed. 52. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 12th November, 2025. Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 12th November, 2025 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, ‘B’ Bench, Pune 5. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune Printed from counselvise.com 47 ITA No.650/PUN/2024 S.No. Details Date Initials Designation 1 Draft dictated on 27.10.2025 Sr. PS/PS 2 Draft placed before author 28.10.2025 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order Printed from counselvise.com "