Case Law Details
Asad Fazlurrehman Kagdi Vs PCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that revisional power under section 263 of the Income Tax Act correctly invoked as AO failed to examine the issue of purchase of land in the light of provisions of section 56(2)(vii)(b) of the Income Tax Act.
Facts- In the present case, the revisionary power was exercised By the Ld. PC/T was pertaining to the non-invocation by AO of Section 56(2)(vii)(b) of the Act to the transaction of immovable property, being land, purchased by the assessee as a co-owner along with other two persons. It was contended that the property was purchased for a sum far below its stamp duty value and thus warranted the addition to be made to the income of the assessee of the amount short paid as compared to its stamp duty value, as per the provisions of Section 56(2)(vii)(b) of the Act. AO having not invoked the said section, the assessment order passed by him therefore was found to be erroneous and prejudicial to the interest of the Revenue by the Ld. PC/T.
Conclusion- The Assessing Officer had clearly not examined the applicability of section 56(2)(vii)(b)in the light of the above facts and therefore, it was a clear case of error in the order of the Assessing Officer. It is not the case of the assessee that the stamp duty value taken by the Ld. PCIT was incorrect. Therefore, based on the facts before him, the Ld. PCIT had rightly found the non-examination of the issue of purchase of land by the assessee in the light of provisions of Section 56(2)(vii)(b) of the Act was an error in the order of the Assessing Officer causing prejudice to the Revenue and accordingly had set aside the assessment order to the Assessing Officer to examine this aspect after giving due opportunity of hearing to the assessee and in accordance with law.
Held that there is no infirmity in the order of the Ld. PCIT passed under Section 263 of the Act and the appeal of the assessee is liable to be dismissed. In effect, the appeal of the assessee is dismissed.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
