COMMISSIONER OF INCOME TAX - 15 Vs. CHINTOO TOMAR

JUDGEMENT

(1.) THE present appeal by the Revenue under Section 260A of the Income Tax Act, 1961 (Act, for short) arises out of proceedings initiated by the Assessing Officer by issue of notice under Section 148 of the Act recording the following reasons: -

(2.) WE have carefully scrutinised and read the said reasons, but are unable to appreciate and comprehend the nexus between the reasons recorded and the conclusion/inference drawn that income had escaped assessment.

(3.) THE Assessing Officer thereafter has observed that as the land sold was agricultural land, capital gains arising out of the said sale was not exempt under Section 54 of the Act. The said statement is obviously incorrect and an erroneous statement. In case the land was agricultural land, then the sale was not a sale of a capital asset within the meaning of Section 2(14) of the Act and no capital gains tax would have been payable. Therefore, the inference of escapement and that tax had not been paid because investment was made under Section 54 of the Act, is illogical and irrational.