Case Law Details
Time City Real Estates (India) Limited Vs PCIT (ITAT Lucknow)
In the present case, ITAT noted that the Assessing Officer had carried out sufficient enquiries and this is not even a case of lack of enquiry. Further the Hon’ble Supreme Court in the case of Malabar Industrial Co. has held that for assumption of jurisdiction u/s 263 of the Act, the order of the Assessing Officer has to be erroneous as well as prejudicial to the interest of Revenue. The Hon’ble Court held that the Commissioner has to satisfy of these twin conditions and if one of them is absent, then recourse is not available u/s 263 of the Act.
The assessee is engaged in the business of real estate development. During the year under consideration, the assessee purchased certain lands for development and incurred certain expenditure on it in the form of stamp duty and land development expenses. We find that assessee debited a total amount of Rs.4,07,28,170/- in its ledger account of land under the head ‘purchase’. The copy of ledger account submitted to the Assessing Officer during original assessment proceedings is placed at page 25 of the paper book. The break-up of this amount, represented by sale deeds of pieces of land along with the stamp duty expenses and development expenses, as submitted to the Assessing Officer, is placed at page 26 of the paper book. The break-up of sale deeds, as reproduced by learned Pr. CIT in his order at page 1, tallies with the registry amount of land, as placed at page 26 of the paper book. The learned Pr. CIT, after noting down the amount of sale deeds, has arrived at a conclusion that the assessee had not filed sale deeds for an amount of Rs.1,15,48,625/-. While holding so he has overlooked the fact that there were development expenses to the tune of Rs.91,46,325/- and other expenses amounting to Rs.8,02,300/-. The break-up of such amount was submitted to learned Pr. CIT and was also submitted to the Assessing Officer during original assessment proceedings as is apparent from the reply of the assessee vide letter dated 01/09/2017, placed at pages 23 & 24 of the paper book. In this letter, the assessee, vide reply No. 3, had submitted to the Assessing Officer that details of purchase of land, as desired in the format, is enclosed and such format, submitted to the Assessing Officer, is placed at page 26 of the paper book. The details at page 26 are complete details regarding purchase of various pieces of land, their registry amount, the development expenses incurred thereon and other expenses incurred thereon and if we make a total of these amounts, the total comes out at Rs.99,48,625/- which should be the difference noted by learned Pr. CIT instead of amount wrongly noted by him at Rs.1,15,48,625/-. In the order of learned Pr. CIT there is a calculation mistake of Rs.16 lacs. However, there are no more sale deeds, the copies of which were not filed by the assessee during the original assessment proceedings. The observation made by learned Pr. CIT is totally wrong as he has not looked into this aspect that besides an amount of sale deed, the assessee had incurred certain development expenses and other expenses also, the details of which were submitted to him as well as were submitted to the Assessing Officer during assessment proceedings. As regards the expenses incurred on these pieces of land, the Assessing Officer, during assessment proceedings, required the assessee to produce bills/vouchers of such expenses and the assessee, vide letter dated 07/12/2017, placed at pages 33 & 34 of the paper book, vide reply No. 2, had produced for verification the vouchers of site development and land development etc. The copy of order sheet entry dated 01/12/2017 also supports this fact wherein the Assessing Officer required the assessee to produce bills/vouchers of site development expenses and the order sheet entry dated 07/12/2017 states that the assessee has filed bills/vouchers of expenses, including lease rent, commission and land development expenses. All these details suggest that the Assessing Officer has passed the order after taking into account and after examination of all the evidences with respect to amount debited in the purchase account of land. Therefore, there is no justification of initiating and passing order u/s 263 by learned Pr. CIT.
FULL TEXT OF THE ORDER OF ITAT LUCKNOW
This is an appeal filed by the assessee against the order of learned Principal Commissioner of Income Tax, Lucknow passed u/s 263 of the I.T. Act. In this appeal the assessee has raised the following grounds:
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