INCOME TAX ACT, 1961

Section 264

Revision under section 264 - Other orders - -

Assessees filed this appeal challenging the order by which PCIT had dismissed assessee's applications under section 264 seeking to revise the returns and consequential orders made thereon. Assessees were married to each other under the Portuguese Civil Code and therefore the provisions of section 5A. They purchased an immovable property at Seraulim and no details with regard to Seraulim property were indicated. It was the case of assessees that they converted Seraulim property which were earlier shown under the head of “Investment” into stock-in-trade for purposes of development. Assessees realized that they had committed a mistake in the filing of the returns and therefore, invoked the provisions of section 264 and applied for revision of intimation under section 143(1) for assessing the gain on the sale of Seraulim property as business income and not as any short term capital gain. Held: It was true that neither books of account/ledgers nor balance sheets were produced by assessees along with their applications under section 264 and Revenue themselves treated Seraulim property as capital asset was really begging the point because it was the case of assessees that this was the error committed by them on account of which they filed their applications under section 264. The order also did not reflect that the same was based on alleged failure on the part of assessee to make any fair valuation of Seraulim property at the stage of their alleged conversion into stock in trade. Therefore in the interest of justice, matter was remanded back to Revenue with a direction to once again consider assessee' applications under section 264.

REFERRED :

FAVOUR : Matter remanded

A.Y. :

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