Case Law Details
Cuttack Development Authority Vs. CIT (ITAT Cuttack)
The sole disputed issue is with respect to setting aside the assessment order by the CIT in respect of land premium of Rs. 3.,50,00,000/-. On perusal of assessment order u/s.143(3) of the Act dated 30.11.2011, we find that no discussion was made by the Assessing Officer regarding land premium paid of Rs. 3,50,00,000/- to Government of Odisha. No enquiries were also made by the Assessing Officer. Prima facie, it appears that the CIT found that the order passed u/s.143(3) of the Act is without making inquiries on this particular disputed issue, which is raised in the revision proceedings. Ld A.R. submitted that the order of the Assessing Officer is not erroneous and prejudicial to the interests of the revenue and only demonstrated before us that Rs. 3,50,00,000/- was paid to Government of Odisha towards land premium which were sold in earlier years, which is fully allowable expenditure u/s.37 of the Act as the land is not a fixed asset but stock in trade. We are of the considered opinion that the explanations submitted before us are to be verified by the Assessing Officer and the CIT having dealt on this issue and has remitted to the file of the Assessing Officer for fresh adjudication as the facts are not emanating out of assessment order. We rely on various judicial pronouncements, wherein, it was held that the Commissioner can regard the order as erroneous on the ground that in the circumstances of the case the Income-tax Officer should have made further inquiries before accepting the statements made by the assessee in his return. It was also held that the Income-tax Officer is not only an adjudicator but also an investigator. It is his duty to ascertain the truth of the facts stated in the return of income. When the circumstances of the case are such so as to provoke an enquiry, it is his duty to make proper inquiry. Failure to make inquiry in such circumstances would make the assessment order erroneous. The Hon’ble Apex Court in the case of Smt. Tara Devi Aggarwal vs. CIT, 88 ITR 323 (SC), has held that the CIT may consider an order of the AO to be erroneous not only it contains some apparent error of reasoning or of law or of fact on the face of it but also because it is a stereo typed order which simply accepts what the assessee has stated in his return and fails to make enquirers which are called for in the circumstances of the case. Recently, the Hon’ble Apex Court in the case of Denial Merchants Pvt Ltd. vs ITO in Special Leave (C) No.(s) 23976 /2017 and others order dated 29.11.2017 has upheld the judgement of Hon’ble Calcutta High Court passed on 10.4.2017 in G.A. No. 599/2016, dismissing the special leave petition observing that the CIT after setting aside the order of the Assessing Officer, simply directed the Assessing Officer to carry thorough and detailed inquiry.
11. In the present case, the CIT has directed the Assessing Officer to make necessary examination regarding the extent of land acquired by the assessee with reference to which land premium of Rs. 3,50,00,000/- was demanded and rate at which said land was acquired and to whom the lands were sold and land premium was received and such receipts on account of transfer fees and stamp duty would constitute capital receipts. We are of the opinion that the Assessing Officer will make inquiries as directed by the CIT and make fresh assessment. Accordingly, we uphold the order of the CIT and dismiss the ground of appeal of the assessee.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
This is an appeal filed by the assessee against the order of the CIT, Cuttack u/s.263 of the Income Tax Act dated 11.3.2014 for the assessment year 2009-2010.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
