| The Tax Publishers2020 TaxPub(DT) 4178 (Mad-HC) INCOME TAX ACT, 1961
Section 263
Merely because guideline of property in question was higher than the sale consideration shown in the deed of conveyance, the same could not be the sole reason for holding that the assessment was erroneous and prejudicial to the interest of Revenue. Therefore, invocation of power of revision under section 263 on such ground was not sustainable in law.
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Revision under section 263 - Erroneous and prejudicial order - CIT set aside assessment order on the ground that guideline value of property purchased by assessee was higher than sale consideration reflected in registered document -
Assessee's case was selected for limited scrutiny on the aspect regarding consideration paid by the assessee for purchase of immovable property and source of funds. AO noted that the consideration paid by the assessee was Rs. 41,50,000 and she paid stamp duty and other expenses of Rs. 5,75,000. Further, the source of funds was verified and the AO was satisfied with the same. Accordingly, he completed the scrutiny assessment. CIT invoked his power under section 263 for the reason that the assessee purchased the immovable property for a consideration of Rs. 41,50,000, whereas, the guideline value fixed by the State Government was Rs. 77,19,000 and there was a difference of Rs. 35,69,000, which was not properly enquired into by the AO. Held: CIT while invoking his power of revision under section 263, faulted the AO on the ground that he did not make proper enquiry. It was not clear as to what in the opinion of the CIT was 'proper enquiry'. It was found that AO in his limited scrutiny, verified the source of funds, noted the sale consideration paid, the expenses incurred for stamp duty and other charges. Further, the only reason for setting aside the scrutiny assessment was on the ground that the guideline value of the property, at the relevant time, was higher than the sale consideration reflected in registered document. It is settled that guideline value is only an indicator and the same is fixed by the State Government for the purposes of calculating stamp duty on a deal of conveyance. Therefore, merely because the guideline value of the property was higher than the sale consideration shown in the deed of conveyance, the same could not be the sole reason for holding that the assessment was erroneous and prejudicial to the interest of Revenue. Therefore, invocation of power of revision under section 263 by PCIT was not sustainable in law.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2014-15
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