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| The Tax Publishers2020 TaxPub(DT) 1438 (Mad-HC) : (2020) 271 TAXMAN 0034 INCOME TAX ACT, 1961
Section 263
Where two views were possible and AO took one such view but CIT did not agree with the same, it could not be the reason for treating the order of the AO as erroneous and prejudicial to the interest of Revenue.
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Revision - Erroneous and prejudicial order - Assessee took one of possible views -
During assessment year under consideration 2014-15, assessee-company sold a property and offered capital gains tax on the sale proceeds while calculating cost on acquisition of property for the purpose of computing capital gains under section 48. It took the revalued sum through which the said land was purchased and reported for taxation during the assessment year 2011-12. The said aspects were examined and accepted by AO. However, CIT sought to revise order of the AO by invoking provisions under section 263 so as to take the value of the purchase of the previous owner made during the assessment year 2005-2006, for the purpose of computing the indexed cost of acquisition. Assessee submitted that its shares changed hands in the year 2010-11 and new share holders paid prices for acquiring shares considering the revaluation done on the land and the sellers of shares paid the appropriate capital gains tax. Held: It was not in dispute that the assessee revalued land in question during financial year 2010-11 and computation of indexed cost of acquisition for the purpose of working of capital gains, started with the revalued amount. It was also not disputed that the only income of the assessee for the impugned assessment year was capital gains arising on the sale of the land. Further, it was also not in dispute that the erstwhile share holders paid capital gains tax on the consideration received by them from sale of shares, after reckoning the revised value of the land in the hands of the assessee. Further, as two views were possible and AO took one such view but CIT did not agree with the same, it could not be the reason for treating the order of the AO as erroneous and prejudicial to the interest of Revenue. Hence, the impugned order of revision passed under section 263 was set aside.
REFERRED : CIT v. Max India Ltd. (2007) 295 ITR 282 (SC) : 2007 TaxPub(DT) 1548 (SC) Malabar Industrial Co. Ltd. v. CIT (2000) 109 Taxman 66 (SC) : 2000 TaxPub(DT) 1227 (SC) V.K. Bharathi v. CIT & Anr. (2019) 102 taxmann.com 55 (Karn) : 2019 TaxPub(DT) 0986 (Karn-HC)
FAVOUR : In assessee's favour
A.Y. : 2014-15
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