Case Law Details
Anand Surana Vs PCIT (ITAT Raipur)
ITAT Raipur held that invocation of section 263 of the Income Tax Act justified as AO passed the order without making any enquiry or verification and hence such order passed is deemed to be erroneous and prejudicial to the interest of revenue.
Facts- Pr. CIT after culmination of the assessment proceedings, called for the assessment records of the assessee. It was observed by the Pr. CIT that the assessee during the year under consideration a/w. another person had sold agricultural land situated at Village: Baroda to NRDA in lieu of compensation of Rs.5,60,05,400/-. The CIT observed that it was the claim of the assessee that as the aforesaid agricultural land was situated beyond the municipal limits of Raipur and thus, was not a capital asset u/s.2(14) of the Act, therefore, the profit/surplus of Rs.2,59,93,950/- on transfer of the same was not exigible to tax in his hands.
Pr. CIT was of the view that as the land sold by the assessee was a capital asset, therefore, his share of profit earned on the sale of the same was liable to be brought to tax in his hands under the head long term capital gain (LTCG). Accordingly, the Pr. CIT held a conviction that as the A.O had failed to apply his mind to the aforesaid issue which was one of the reason for selection of his case for scrutiny assessment, therefore, the same had rendered the assessment order passed by him as erroneous in so far it was prejudicial to the interest of the revenue u/s.263 of the Act. As the assessee had failed to come forth with any reply in support of his aforesaid claim in the course of proceedings before the Pr. CIT, therefore, the latter vide his order u/s.263 of the Act dated 26.03.2021 set-aside the assessment order with a direction to the A.O to make adequate enquiries with regard to the aforesaid issue and adjudicate the same afresh after affording an adequate opportunity to the assessee.
Being aggrieved, the assessee has preferred the present appeal.
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