COMMISSIONER OF INCOME TAX Vs. JAGDISH KALANI

JUDGEMENT

(1.) THIS is an appeal filed by Revenue (CIT) under Section 260a of the IT Act against an order dt. 6th May, 1999, passed by Income-tax Appellate Tribunal (for brevity hereinafter referred to as Tribunal) in ITA No. 406/ind/1995. This appeal was admitted for final hearing on following substantial question of law:

(2.) HEARD Shri R. L. Jain, learned senior counsel with Ku. V. Mandlik, learned Counsel for the appellant and Shri S. C. Bagadia, learned senior counsel with Shri D. K. Chhabra, learned Counsel for the respondent.

(3.) THE dispute relates to asst. yr. 1992-93. The respondent (assessee) was assessed as an individual for the year in question by passing an order under Section 143 (3) on 17th March, 1993. While making an assessment, the AO treated one sale of plot bearing No. C-1, Bungalow No. 45, Neemuch, exigible to payment of-capital gains tax by accepting the stand of assessee who offered to pay capital gains tax on its sale amounting to Rs. 60,005. However, CIT invoked his suo motu revisionary powers under Section 263 of the Act against the assessee. In the opinion of CIT, the transaction in question, i. e. , sale of plot did not amount to sale so as to attract the liability to pay capital gains but according to him, it was in the nature of "adventure-in-trade" and hence, the entire sale transaction amounted to business profit. The CIT, therefore, forming such prima facie opinion, issued notices to assessee and after giving him an opportunity confirmed his opinion by his order, dt. 27th March, 1995. In this view of the matter, the AO was asked to make consequential assessment. It is this order of CIT which was challenged by the assessee in appeal to Tribunal. By impugned order under appeal, the Tribunal allowed the appeal and set aside the order of CIT holding inter alia, that firstly the order of AO was neither erroneous nor prejudicial to the interest of Revenue and secondly, mere change of opinion on the same facts already considered by AO does not empower the CIT to invoke Section 263 ibid for setting aside of the order passed by AO insofar as it relates to the issue regarding sale of plot in question. It is against this order of Tribunal, the Revenue has come up in appeal which as stated supra was admitted for final hearing on aforementioned substantial question of law.