Taxpublishers.in - InterestingDecision/Flash_224.htm - Tax Publishers Your Tax Solution Hub

Share via Whatsapp 229 Views


The Tax Publishers Sanjay Majumdar v. Pr. CIT [ITA No. 68/Alld/2018, dt. 28-1-2021] : 2021 TaxPub(DT) 659 (All-Trib) Reopening under section 263 alleging cost of conversion of leasehold to freehold Nazul land *Facts:* Assessee inherited with brothers a piece of Nazul land from his father which was jointly sold by them and 25% of it was offered by the assessee as capital gains. There was certain cost of conversion incurred by the assessee for conversion of the Nazul leasehold land to freehold land. The consideration paid for the transfer also covered the cost of the conversion which was agreed upon to facilitate the assessee to enable conversion of the leasehold to freehold. In the assessment the assessing officer made due inquiries and passed an order under section 143(3) read with 147 and the same was also subject to certain rectification under section 154. Noticing this the PCIT felt that the assessing officer did not properly inquire the issue of claim of expenditure of the conversion of the leasehold to freehold and had allowed this wrongly when the cost was borne by the buyers and not the seller assessee + the indexation of the same was also applied erroneously accordingly he invoked section 263 on which the assessee went in appeal - Held partly in favour of the assessee that the indexation base year being wrongly applied to this extent the order of the assessing officer was prejudicial to the interests of the revenue. On the conversion cost it was held in favour of the assessee that there was nothing in the sale deed which indicated that the conversion cost was borne by the buyers. To that extent the invocation of section 263 was held to be incorrect. *Editorial Note:* The assessment was done under section 143(3) as scrutiny assessment then reassessment was done under section 147 and that was also rectified and it was this order which was subject to section 263 by the PCIT. The section 263 path taken in this case is very unusual where a rectification of a reassessment has been held to be erroneous and prejudicial to the interests of the revenue under section 263.

The Tax Publishers

Sanjay Majumdar v. Pr. CIT [ITA No. 68/Alld/2018, dt. 28-1-2021] : 2021 TaxPub(DT) 659 (All-Trib)

Reopening under section 263 alleging cost of conversion of leasehold to freehold Nazul land

Facts:

Assessee inherited with brothers a piece of Nazul land from his father which was jointly sold by them and 25% of it was offered by the assessee as capital gains. There was certain cost of conversion incurred by the assessee for conversion of the Nazul leasehold land to freehold land. The consideration paid for the transfer also covered the cost of the conversion which was agreed upon to facilitate the assessee to enable conversion of the leasehold to freehold. In the assessment the assessing officer made due inquiries and passed an order under section 143(3) read with 147 and the same was also subject to certain rectification under section 154. Noticing this the PCIT felt that the assessing officer did not properly inquire the issue of claim of expenditure of the conversion of the leasehold to freehold and had allowed this wrongly when the cost was borne by the buyers and not the seller assessee + the indexation of the same was also applied erroneously accordingly he invoked section 263 on which the assessee went in appeal -

Held partly in favour of the assessee that the indexation base year being wrongly applied to this extent the order of the assessing officer was prejudicial to the interests of the revenue. On the conversion cost it was held in favour of the assessee that there was nothing in the sale deed which indicated that the conversion cost was borne by the buyers. To that extent the invocation of section 263 was held to be incorrect.

Editorial Note: The assessment was done under section 143(3) as scrutiny assessment then reassessment was done under section 147 and that was also rectified and it was this order which was subject to section 263 by the PCIT. The section 263 path taken in this case is very unusual where a rectification of a reassessment has been held to be erroneous and prejudicial to the interests of the revenue under section 263.