| The Tax Publishers2020 TaxPub(DT) 3851 (Jp-Trib) INCOME TAX ACT, 1961
Section 263
Where transaction in land was wrongly declared by assessee as capital gain but while filing return in response to notice issued under section 148, transaction was shown as business income, considering fact that AO examined all issues regarding sale of land and accepted same as business income, view taken by AO was a possible one, and therefore, order of AO could not be construed as erroneous and prejudicial to interest of revenue, so as to invoke revisionary jurisdiction under section 263.
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Revision under section 263 - Erroneous and prejudicial error - Assessee wrongly showed this income under head of Capital gains which was actually business income - View of AO, whether possible view precluding PCIT to invoke revisionany jurisdiction
Assessee-individual was issued notice under section 148 after she filed her return. Proceedings for reopening assessment were initiated and assessment was completed under section 148/143(3). PCIT initiated proceedings under section 263. PCIT passed order holding that AO did not make necessary verification of transactions shown by assessee in relation to purchase and sale of agricultural land. Held: Assessee purchased agricultural land, got it converted into the industrial land and developed it and sold it. Transaction was of purely commercial nature and income/profit earned out of this transaction was purely business income. Assessee wrongly showed this income under head of Capital gains which was actually business income. So AO accepted this as business income. Finding of PCIT in that regard may be other possible view as categorized as capital gain income but that does not mean that order passed by AO was erroneous because AO took the view, which was possible one. Transaction of purchase and sale and conversion was purely a business transaction and assessee wrongly showed it as capital gain which was corrected while filing revised return. By filing return in response to notice under section 148, assessee corrected her mistake and showed transaction in business income. AO examined all issues regarding sale of lands. All details were submitted before AO. Assessment order passed by AO was neither erroneous, nor prejudicial to interest of revenue.
Followed: Indian Shaving Products Ltd. v. BIFR (1996) 218 ITR 140 (SC) : 1996 TaxPub(DT) 0787 (SC) CIT v. Lakshmi Machine Works Ltd. (2020) 422 ITR 235 (Mad) CIT v. Madhura Coats Ltd. (2020) 422 ITR 390 (Mad) : 2019 TaxPub(DT) 7642 (Mad-HC)Distinguished:CIT v. Sun Engineering Works Ltd., 64 Taxmann.com 442 (SC) : 1992 TaxPub(DT) 1434 (SC) CIT v. A Samarapuri Chetty Ratnam and Abdul Hadi, 64 Taxmann.com 344 (Mad. H.C) : 1992 TaxPub(DT) 0560 (Mad-HC) CIT v. Jacob J Thaliath, (2012) 344 ITR 279 (Kerala) : 2012 TaxPub(DT) 1747 (Ker-HC) Gigabyte Technology (India) (P) ltd v. CIT (2015) 53 Taxmann.com 30 (Panji-Trib) : 2015 TaxPub(DT) 1248 (Panaji-Trib) Babulal S. Solanki v. ITO (2019) 104 Taxmann.com 155 (Ahd.-Trib) Daniel Merchants (P) Ltd. v. ITO, Anrm (SC) (SLP No. 23976/2017, dt. 29-11-2017 : 2017 TaxPub(DT) 5217 (SC) Kerala State Electricity Board Ltd. v. DCIT, Circle 1(1), Trivendrum (2019) 111 Taxmann.com 353 (Cochin-Trib)
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2010-11
INCOME TAX ACT, 1961
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