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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: MS. SUCHITRA KAMBLE & SHRI BHAGIRATH MAL BIYANI
PER SUCHITRA KAMBLE, JUDICIAL MEMBER :
This appeal is filed by the assessee against the order dated 25.03.2021 passed by the PCIT, Indore-1 for the Assessment Year 2016-17.
The grounds of appeal are as under:
“1. On the facts and in the circumstances of the case the learned Pr. Commissioner of Income Tax, Indore – 1, has erred in setting aside the assessment order so passed u/s. 143(3) on 19.11.2018 without appreciating the facts of the case, whereas there was no material on records on the basis of which it can be said that the order so passed was prejudicial to the interest of the revenue. 2. On the facts and in the circumstances of the case the learned Pr. Commissioner of Income Tax, Indore – 1, has adopted the guideline value for the assessment year 2016-17, whereas the applicable guideline in this case was that relevant to assessment year 2015-16 and thus, addition so made on that basis of Rs.4,46,000/- is patently wrong.
ITA No.111/ Ind/ 2022 A.Y. 2016-17 Page 2 of 4 3. On the facts and in the circumstances of the case the learned Pr. Commissioner of Income Tax, Indore – 1, has erred in directing to make an addition of Rs.20,60,676/- by treating the same as unexplained, whereas all such payments were made out of property disclosed sources and substantial payments were relevant to assessment year 2015-16 and thus, the addition so made is patently wrong.”
The return of income for A.Y. 2016-17 was filed on 17.10.2016 declaring total income at Rs.8,36,990/-. The case was selected by CASS under limited scrutiny on the issue of whether the investment and income relating to properties are duly disclosed. The assessee filed reply and the same was verified by the Assessing Officer. The Assessing Officer observed that the assessee is having income of Rs.8,36,990/- from house property and business and from other sources also. He disclosed sources of investment in properties in his reply which was duly examined and accordingly accepted the same under Section 143(3) of the Income Tax Act, 1961 vide order dated 19.11.2018.
The PCIT issued notice under Section 263 of the Act stating therein that the assessee purchased the property at Rs.4,03,00,000/- but copy of registry shows that the value of the property has been determined at Rs.4,11,92,000/-. Thus, the PCIT observed that the source of investment in property amounting to Rs.24,60,676/- which is 50% of difference of property purchase and value shown in registry and the same was not verified.
Being aggrieved by the order under Section 263 of the Act passed by the PCIT, the assessee filed appeal before us.
The Ld. AR submitted that the assessee had purchased one plot of land admeasuring 11979 sq. ft. for Rs.4,03,00,000/- as per Sale Deed dated 31.03.2015 justify with Jay Pandya. Part payment against such purchase was main February, 2015 and the details of payments were submitted before the Assessing Officer during the assessment proceedings. The Sale Deed was executed on 31.03.2015 and registration was done on 22.04.2015 before the Registrar. The Ld. AR submitted that most of the payments were made on or before 31.03.2015. Ld. AR submitted that all the details were before the Assessing Officer and the Assessing Officer, after verifying
ITA No.111/ Ind/ 2022 A.Y. 2016-17 Page 3 of 4 and taking into account, has rightly accepted the same. Ld. AR submitted that the PCIT has taken a second opinion and issued 263 notice which is not permissible under revisionary powers. Ld. AR submitted that the assessment order is not prejudicial to the interest of the Revenue.
The Ld. DR relied upon the order under Section 263 of the Act passed by the PCIT.
We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee was 50% owner and was liable for assessment of Rs.4,46,000/- as income from other sources under Section 56(2)(7) of the Act, but the PCIT overlooked the date of Sale Deed as well as the date of payments made by the assessee. In respect of source of investment in property amounting to Rs.24,60,676/-, the said was thoroughly explained by the assessee during the assessment proceedings. In fact, all the details were properly verified by the Assessing Officer at the assessment stage and there was a specific query raised by the Assessing Officer related to investment income in respect of property alongwith its source. Therefore, invocation of Section 263 of the Act by the PCIT is not justified as there was no income escaped and the assessment order was not erroneous and prejudicial to the interest of Revenue. The order under Section 263 of the Act passed by the PCIT is just a second opinion and, therefore, not justifiable.
In the result, appeal of the assessee is allowed.
Order pronounced in the open Court on this 10th January, 2023.
Sd/- Sd/- (BHAGIRATH MAL BIYANI) (SUCHITRA KAMBLE) Accountant Member Judicial Member Indore, the 10th January, 2023 PBN/*
ITA No.111/ Ind/ 2022 A.Y. 2016-17 Page 4 of 4
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 Indore Bench, Indore