Development activities for construction of buildings for residential as well as commercial purposes are being pursued by developers (contractors). These developers business is to construct buildings.
The developers are in business of real estate. The developer usually makes investment in venture and constructs residential / commercial buildings. He pays lump sum amount as security to the land owner in order to obtain licence to enter upon the land of the owner and also obtains the Power of Attorney executed in his favour to do all acts, deeds and things as provided under the Power of Attorney and also the terms and conditions of the development agreement entered into between the owner and the developer. The owner of the land receives certain portion of the completed project under the development agreement. The developer receives large portion of the building project towards his return.
The developer sells flats to the prospective buyers. He sells flats under agreement of sale on the terms and conditions contained therein. Developer profit in terms of development agreement is arrived at after deducting cost of construction of the building and other expenses.
2. Problems of Taxation
In case the land is sold, sale value of land is reduced by the cost of acquisition after taking into consideration indexed cost of land, if it is long-term, is his gain. It becomes a simple issue. The land owner gives up land under a development agreement and the land owner receives a certain portion of building area towards consideration in respect of land transferred, the issues relating to date of transfer, cost of acquisition and taxability of profit etc., become quite complex.
3. Legal issues and taxation emanates from Joint Development Agreement
(i) Land handed over to the developer for development and construction of building thereon
Is it constitute transfer under Section 2(47)(v) of Income-tax Act?
Section 2(47) defines “transfer”. Transfer in relation to capital asset to mean sale, exchange or relinquishment of assets etc. Clause (v) of sub-section (47) of Section 2 provides that any transaction involving the allowing of possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in Section 53A of the Transfer of Property Act, 1882 shall be considered as transfer.
(A)  129 TAXMAN 497 (BOM.), HIGH COURT OF BOMBAY – Chaturbhuj Dwarkadas Kapadia of Bombay vs. Commissioner of Income-tax – INCOME TAX APPEAL NO. 24 OF 2003 dated 13th February 13, 2003 – The assessee obtaining all permissions and granted an irrevocable licence to enter upon the property and almost entire amount of consideration was paid.
The assessee had undivided share in an immovable property. By agreement dated 18-8-1994 the assessee agreed to sell to Floreat his share of immovable property for consideration with a right to the said Floreat to develop the property in accordance with rules and regulations framed by concerned authority. Under clause 9 of the agreement it was, inter alia, provided that on Floreat obtaining all necessary permissions and approvals and upon receipt of NOC under Chapter XX-C of the Act, the assessee shall grant an irrevocable licence to enter upon the assessee’s share of the property. Under clause 20 of the agreement it was agreed that the sale shall be complete by execution of conveyance. During the financial year relevant to the assessment year 1996-97, Floreat obtained two permissions out of several other permissions. Similarly, by 31-3-1996, Floreat had paid almost entire sale price. However, BMC issued a commencement certificate permitting construction of building up to plinth level only. In the meantime, plan came to be amended and ultimately the Power of Attorney was executed on 12-3-1999. Dispute arose between the assessee and income-tax authority on the Assessing Officer’s decision to assess said capital gain in the assessment year 1996-97. According to the department, the transfer had taken place during the accounting year relevant to the assessment year 1996-97 as most of the permissions were granted during the accounting year 1995-96 and possession in favour of Floreat was also given. However, the assessee contended that the transfer took place when he executed an irrevocable licence in favour of Floreat to enter upon the property and, therefore, liability to pay capital gains arose during the assessment year 1999-2000. On appeal, the Tribunal sustained the stand of the revenue.
The narrow dispute which arose for determination in this Appeal is : Whether the liability of the assessee for capital gains accrued to the assessee during assessment year 1996-97 or whether the assessee was liable to pay capital gains tax during the assessment year 1999-2000. According to the department, transfer had taken place during the accounting year ending 31st March 1996 relevant to assessment year 1996-97, whereas according to the assessee, the transfer took place only when the assessee executed an irrevocable licence in favour of Floreat to enter upon the property and, therefore, according to the assessee liability arose during the assessment year 1999-2000.
This is not the case where the assessee denies transfer. In this case, the assessee has paid capital gains tax for assessment year 1999-2000. However, the assessee is told that the year of chargeability is assessment year 1996-97 and not assessment year 1999-2000. Moreover, this is the first time that they have laid down the guidelines. Further, the assessee has paid the tax for assessment year 1999-2000. Generally, this Court does not interfere in concurrent findings of facts. However, in this case, a substantial question of law has arisen on interpretation of section 2(47)( v). It is for this reason that they have given the guidelines, which may be followed by the department in all future cases. We have gone through the compilation of documents and from mere substantial compliance of the agreement, one cannot infer transfer in the accounting year ending 31st March, 1996. They also mention that there are mistakes, apparent on the face of the record, in the order of the Tribunal. The Tribunal has relied upon assessee obtaining 7 permissions. They found that item (vi) and item (vii) are mere repetitions of item (iii) and item (i) respectively. Similarly, the Tribunal has referred to permissions obtained during financial years other than the concerned financial year ending 31st March, 1996 to come to the conclusion that the transfer had taken place during that year. Lastly, the Tribunal has referred to permission dated 25th June, 1995 for redevelopment of the property vide item (iii). However, in the compilation given by the assessee there is no such permission. The assessee has disputed the existence of this document. Office is directed to take the assessee’s compilation on record and mark “X”. It is for this reason that vide Order dated 29th January, 2003, Hon’ble High Court called upon the Commissioner of Income-tax (Judicial) to forward to us the R&P. However, learned counsel for the department has informed them the R&P was not available. There are other apparent errors in the Order of the Tribunal. At Page 144 of the Paper Book, the Tribunal has stated as under :
“From the dates it is evident that from the very next day i.e., 1-4-1997 from the end of financial year ending on 31st March 1996, the builder was using the well water against payment of relevant charges to the assessee.”
The above quoted findings of the Tribunal is apparently an error because the financial year ended on 31st March 1996 and the first day of the next financial year was 1-4-1996 and not 1-4-1997. According to the Tribunal, the letter dated 18-2-1999 shows that Floreat came into possession on the day next to 31-3-1996 i.e., 1-4-1997. As stated above, the day next to 31-3-1996 would be 1-4-1996 and not 1-4-1997 and even if 1-4-1997 is taken as a typing mistake, it could only be read as 1-4-1996 and if 1-4-1996 is the date on which Floreat/Developer came in possession, then the possession was received by the developer during the financial year 1996-97 corresponding to assessment year 1997-98. Therefore, this finding of the Tribunal is erroneous because in this case they were concerned with assessment year 1996-97 and not the assessment year 1997-98. They held that Hon’ble Tribunal was not justified in concluding that the assessee
had transferred property during previous year relevant to assessment year 1996-97.
(B)  91 ITD 429 (MUM.)(TM), IN THE ITAT MUMBAI BENCH ‘D’ (THIRD MEMBER) – Ms. Rubab M. Kazerani vs. Joint Commissioner of Income-tax – When a transaction by which assessee transferred property in question in manner prescribed in sub-clauses (v) and (vi) of section 2(47), read with section 53A of Transfer of Property Act, 1882.
The assessee received certain property at Bangalore by way of gift in September, 1955 which was purchased by her father in 1921. The assessee never resided in the said property. As the assessee was a spinster lady of approximately 65 years of age, living at Mumbai and there was no kith and kin to look after the said property, she executed a Memorandum of Understanding (MOU) on 8-6-1995 with one ‘SA’ through her general Power of Attorney with an intention to dispose of the said property. As per that MOU, she appointed ‘SA’ the sole and exclusive person to identify the buyers and accepted ₹ 5.5 crores from ‘SA’ as total sale consideration. The assessee conferred upon ‘SA’ irrevocable right to identify buyers for the property and to obtain clearance certificates, etc., and agreed that she would not claim reimbursement of any expenses incurred for the purpose of developing property and identifying buyers for the property and would have nothing to do with the profit earned or loss incurred by ‘SA’ on identifying buyers of the property and receiving the sale consideration. On 1-7-1998 an agreement to sell was executed by the assessee’s attorney for a total consideration of ₹ 11.87 crores and the assessee was referred to as a vendor and ‘SA’ was referred to as confirming party. In that way, ‘SA’ received ₹ 6.37 crores extra in the said sale. The assessee and ‘SA’ did not file any statement under section 269UC in the prescribed Form No. 37-I in relation to said MOU. But such statement was duly filed in respect of sale agreement, dated 1-7-1998 and clearance from appropriate authority was also obtained and the subsequent agreement to sell was registered. The assessee filed her return of income declaring long-term capital gain of ₹ 2.69 crores arising out of sale consideration of ₹ 5.5 crores.
Hon’ble Tribunal has carefully considered the rival submissions. On consideration, they rejected the contention of the learned counsel of the assessee that the effect of the impugned order under section 263 was restricted to determination of the correct fair market value of the property as on 1-4-1981. In the first instance, in the operative part of the impugned order, which has been reproduced by us at the end of para 5 of the said order, they found that the learned CIT has cancelled the assessment order under section 143(3) and directed the Assessing Officer “to examine the correct taxability of the capital gains after making necessary enquiry regarding the fair market value of the property at Bangalore….”. Hon’ble Tribunal thus found that the mandate given by the learned CIT to the Assessing Officer is to examine the correct taxability of the capital gains and enquiry to be made regarding the fair market value is only a part of this mandate. Secondly, it is well-settled that a document must be read as a whole and not merely in parts. In this case the learned CIT has controverted Memorandum of Understanding dated 8-6-1995 and acceptance of the same as basis of the assessment order by the Assessing Officer both in the show-cause notice issued and in the subsequent part of his order justifying exercise of his powers under section 263. He has also expressed the view that the correct assessment year was assessment year 2000-01, though, finally the CIT has left this issue open and left it to the Assessing Officer “to examine the correct taxability of the capital gains”.
“They have carefully considered the learned counsel’s submission. On the examination of facts and assessment records, it is evident that MOU dated 8-5-1995 executed by the assessee with Shri Shahrukh for the consideration of ₹ 5,50,00,000 was only for the limited purpose of identification of prospective buyer at Bangalore. In the MOU, amount of ₹ 5.50 crores paid to the assessee by Shri Shahrukh was referred to as assured security deposit and not sale consideration. If it was full and final payment, there was no reason to mention it as security deposit. If MOU is an instrument for sale, then it should have been referred to as an agreement for sale and not as MOU.
The assessment records show that agreement for sale dated 1-7-1998 for ₹ 11,87,00,726 is on record. However, this is also a fact that this agreement for sale dated 1-7-1998 was registered with the Registering Authority in the month of April 1999, since the agreement for sale was registered in April’ 1999, the correct assessment year for the purpose of transfer of capital asset and taxability of capital gain thereon would be assessment year 2000-01 and not assessment year 1996-97.
(C)  164 Taxman 108 (AAR – New Delhi) Authority for Advance Rulings of New Delhi – Jasbir Singh Sarkaria
Date of entering into agreement cannot be considered to be date of transfer within meaning of sub-clause (v) of Section 2(47).
In this case, the appellant, an American citizen, co-owned some agricultural land in India along with his brother and sister. They, having decided to develop the land by constructing a residential complex thereon, entered into a collaboration agreement with a developer on 8-6-2005. According to the terms of the agreement, the developer should obtain the Letter of Intent (LoI) from the concerned Government Department and other permissions/sanctions for developing the land at its own risk and cost. On fulfilment of the requirements laid down in the LoI, owners will have to execute irrevocable General Power of Attorney in favour of developer. The developer will have 84 per cent share of the entire built up area and the proportionate land area whereas the owners’ share will be 16 per cent. Subsequently, an agreement styled as ‘Supplementary Agreement’ was entered into on 15-9-2005 between the applicant and other co-owners on the one hand and developers on the other. It was an agreement to sell 16 per cent share of the owners in the built up area to the developer or its nominee for a consideration of ₹ 42 crores, ₹ 2 crore was received under the collaboration agreement and the balance of ₹ 40 crore was payable by the developer in six instalments starting from 8-3-2006. In the aforesaid facts and circumstances of the case, the applicant sought advance ruling of the Authority on the question as to whether the capital gains arise to him during the financial year 2006-07 and, accordingly, subject to tax in the assessment year 2007-08 or not. It is the applicant’s contention that the transfer can be said to have taken place only when the entire consideration of ₹ 42 crores has been received by the owners in terms of the supplementary agreement. According to the Commissioner, the capital gains arise during the year in which any of the following activities take place, i.e., (a) obtaining permission for change of land use by the developer; (b) construction/development of land; and (c) receipt of payments by the applicant from 8-3-2006 onwards as per the supplementary agreement.
After considering the facts of the case, the following conclusion was arrived.
1. Where the agreement for transfer of immovable property by itself does not provide for immediate transfer of possession, the date of entering into the agreement cannot be considered to be the date of transfer within the meaning of sub-clause (v) of section 2(47) of the Income-tax Act.
2. To attract sub-clause (v) of section 2(47), it is not necessary that the entire sale consideration up to the last instalment should be received by the owner.
3. In the instant case, having regard to the terms of two agreements and the irrevocable GPA executed pursuant to the agreement, the execution of GPA shall be regarded as the “transaction involving the allowing of the possession” of land to be taken in part performance of the contract and therefore, the transfer within the meaning of section 2(47)(v) must be deemed to have taken place on the date of execution of such GPA. The irrevocable GPA was executed on 8-5-2006 i.e., during the previous year relevant to the assessment year 2007-08 and the capital gains must be held to have arisen during that year. Incidentally, it may be mentioned that during the said year, i.e., financial year 2006-07, a final licence was granted and the applicant/owners received nearly 2/3rd of the consideration.
4. Once it is held that the transaction of the nature referred to in sub-clause (v) of section 2(47) had taken place on a particular date, the actual date of taking physical possession need not be probed into. It is enough if the transferee has by virtue of that transaction a right to enter upon and exercise the acts of possession effectively.
(D) Bertha T. Almeida vs. Income-tax Officer –  14 taxmann.com 171 (Mumbai Bench B)
Whether handing over possession of property to developers constitute transfer under Section 2(47)(v)?
Section 2(47) defined “transfer” in relation to capital assets to mean sale, exchange or relinquishment of the assets etc. Clause (v) of sub-section (47) of Section 2 provides that any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in Section 53A of the Transfer of Property Act, 1882, shall also be considered as transfer. The Supreme Court in case of CIT vs. Podar Cement (P) Ltd. 226 ITR 625 (SC) has held that owner is a person who is entitled to receive income from property in his own right and the requirement of registration of sale died in the context of section 22 is not warranted.
In this case, it is clear that since the assessee entered into agreement with the developers for transfer of the property, handed over the possession who in the mean time constructed flats thereon and also received consideration of ₹ 20.00 lakhs in cash, it is difficult to hold that there was no transfer under Section 2(47). It clearly amounted to transfer giving rise to capital gains.
(E) Krishna Kumar D. Shah (HUF) vs. Dy. Commissioner of Income-tax  23 taxmann.com 111 (Hyd.)
The date of transaction determines the date of transfer. The brief facts of the issue are that the assessee had entered into a Development Agreement cum General Power of Attorney with M/s. Splendid Aparna Projects Ltd., Hyderabad vide Agreement dated 31st March, 2006. As per the said Agreement, a total land was to be developed by Splendid Aparna Projects Ltd. As per the said Agreement, the assessees being the land owners were entitled for 36% of the saleable constructed area. They had received a deposit of ₹ 1,18,50,000/- from the Developer. AO took the view that Development Agreement attracted the provisions of Section 2(47)(v) of the Income-tax Act and capital gain tax was leviable on the said transaction.
AO computed Long Term Capital Gains of ₹ 14,32,38,499/- which was apportioned equally among four assessees and added to the income returned by the assessees.
Being aggrieved, assessee went for an appeal before the CIT(A) and CIT(A) confirmed the orders of the AO and matter came before the Tribunal.
The factual matrix of the instant case was examined by Tribunal and it held that the condition laid down in section 2(47)(v) has been complied with and the lower authorities justified in treating the transaction is liable for capital gains.
(F)  28 taxmann.com 200 (Coch.) – In the ITAT Cochin Bench, G. Sreenivasan vs. Dy. Commr. of Income-tax, Central Circle
Capital Gains: Assessee entered into Development Agreement.
1. During the course of search proceedings carried out in the case of NC Ltd. on 21st February, 2006, it was noticed that the assessee had entered into a development agreement with that company on 14th April, 2002 for construction of a multi-storied building consisting of residential apartments on land owned by him.
2. The assessee was to receive certain constructed area and car parking area in addition to a sum of ₹ 18 lakh. The said amount of ₹ 18 lakh was received by the assessee from the said company spread over financial year 2002-03, 2003-04 and 2004-05.
3. As the assessee had not filed his return of income, the Assessing Officer issued notice under section 148 for three assessment years, i.e., 2003-04, 2004-05 and 2005-06. Thereafter, Assessing Officer completed the assessment by determining the long term capital gains for the assessment year in question, i.e., 2003-04. He also held that since handing over of possession which took place on 21st April, 2004, capital gains had to be assessed for the assessment year 2005-06.
4. On appeal the Commissioner (Appeals) upheld Assessing officer’s for the assessment year in question, i.e., 2003-04. The Tribunal observed that since the capital gains is assessable in assessment year 2003-04, the right course for the assessee would be to approach the tax authorities for exclusion of the income, which was wrongly offered by him in the subsequent assessment years. In the interest of natural justice, the tax authorities may consider any such request made by the assessee in a liberal manner.
(G)  35 taxmann.com 415 (Hyderabad Trib.) – S. Ranjith Reddy vs. Dy. Commr. of Income-tax, Circle 6(1), Hyderabad
Section 2(47) of the Income-tax Act, 1961, read with section 53A of the Transfer of Property Act, 1882 – Capital gains – Transfer – Assessment year 2006-07 – Whether, where nothing happened in relevant previous year other than execution of agreement, whereby assessee assigned his landed property in favour of joint venture between assessee and developer, there was no transfer under Section 2(47) as there was no extinguishment of rights or receipt of consideration – Whether, where no progress or construction had taken place in said landed property since date of signing development agreement, it could not be held that developer had performed its obligations as envisaged in section 53A of Transfer of Property Act, and therefore, there was no transfer as per section 2(47).
Section 147 of the Income-tax Act, 1961 – Income escaping assessment – General – Assessment year 2006-07 – Whether, where return in earlier year processed under Section 143(1), only disability on part of assessee is that he cannot challenge notice of reopening on ground that it was prompted by a mere change of opinion – Whether, even while reopening a case where only intimation under section 143(1) was issued, it is essential that Assessing Officer should have tangible material before him justifying his reason to believe that income had escaped assessment.
Hon’ble Tribunal examined the development agreement dated 28th February, 2006. As per this development agreement land owner gets his share of plots on construction and consideration is quantified in terms of money. Also the handing over of possession in the development agreement is missing. Both the developer and the assessee having the landed property. They pooled together the landed property along with some other parties who are owners of some other landed property and all parties together given licence to the builder to enter the premises and construct houses. No sale was effected on the date of agreement. No consideration has been passed between the parties on signing the agreement. Further from the date of signing of development agreement dated 28.2.2006 to 31.3.2006 no progress has taken place in the said landed property which is subject matter of development agreement, nothing has been brought on record. Further, there was no consideration in the form of money passed between the parties. There was no construction, whatsoever, taken place during the period 28.2.2006 to 31.3.2006. Even otherwise there was no General Power of Attorney given by the assessee to the developer. In such a situation, it is only the actual performance of transferees obligation which can give rise to the situation envisaged in section 53A of the TP Act. On these facts, it is not possible to hold that the developer has performed its obligation during the period 28.2.2006 to 31.3.2006 in which the capital is sought to be taxed by the Revenue authorities. In our opinion, the condition laid down u/s. 53A of TP Act was not satisfied during the period from 28.2.2006 to 31.3.2006. Once we come to the conclusion that the developer has not performed the stipulation as required by the development agreement during the period under consideration and within the meaning assigned to the expression in section 53A of TP Act, its contractual obligation in the previous year relevant to the present A.Y. 2006-07, and it cannot be said that there was a transfer u/s. 2(47)(v) of the Act so as to levy capital gains tax. The judgment in the case of Chaturbhuj Dwarkadas Kapadia by the Bombay High Court undoubtedly lays down a proposition which, more often than not, favours the Revenue but on the facts of this case the said judgement supports the case of the assessee as “willingness to perform” has been specifically recognised as one of the essential ingredients to cover a transaction by the scope of section 53A of TP Act. The Revenue does not get any assistance from this judicial precedent. The very foundation of Revenue’s case is devoid of merit.
The assessee’s appeal in ITA No. 290/Hyd/2012 was allowed by holding there is no capital gains tax on account of development agreement the ground raised by the Revenue in its appeal becomes infructuous and dismissed accordingly. Revenue appeal in ITA No. 336/Hyd./2012 is dismissed.
(H)  90 taxmann.com 83 (Bombay) – High Court of Bombay – Dr. Joao Souza Proenca vs. Income-tax Officer, Ward 2(2), Panaji – Whether transfer within meaning of Section 2(47)(v) had taken place only in assessment year 2002-03 vide agreement dated 30th April, 2001 when actual possession was given to developer.
1. On a close scrutiny of the Power of Attorney, agreement and the reply, the AO recorded a finding that only the agreement dated 30th April, 2001 gives rise to the transfer within the meaning of section 2(47)(v) of the Act, attracting the capital gains arising out of the said transfer. This finding of fact though set aside by the Commissioner but upheld by the Tribunal after elaborate discussion.
2. The agreement dated 30th April, 2001 no doubt refers to some oral agreement and Power of Attorneys executed between the Appellants and the Developer but the fact remains that the agreement dated 30th April, 2001 in clear terms records that the Appellants are the owners and in possession of the property. The Power of Attorney of the year 1993-94 does not disclose that the possession has been given to the developer in pursuance to the said Power of Attorney. Moreover, the Appellants in their reply to the notice in unequivocal terms have stated that the Appellants have not given possession to the developer but had given only access to him to enable to do certain jobs on their behalf. It has also been clearly stated in the reply that the Appellants continued to be full owners of the property and there is no transfer.
3. At this point of time, it is relevant to refer the Judgment of the Division Bench of this Court in the case of Chaturbhuj Dwarkadas Kapadia vs. CIT  129 Taxmann 497/260 ITR 491 on which reliance has been placed by Ms. Amira Razzaq, learned Counsel for the Revenue as also the judgment dated 20th November, 2017 passed by the Division Bench of this Court in the case of Dr. Arvind S. Phadke vs. Addl. CIT  46 taxmann.com 335 (Pune – Trib.).
4. The Hon’ble Tribunal have no hesitation to hold that the Tribunal has committed no illegality in reversing the Order of the Commissioner by holding that the transfer within the meaning of section 2(47)(v) had taken place only in the Assessment Year 2002-2003 as we find that vide agreement dated 30th April, 2001, the actual possession was given to the developer and it was not given the basis of Power of Attorneys and so called oral agreement entered into between the Appellants and the developer in the year 1993-94.
(I)  96 taxmann.com 274 (Calcutta), High Court of Calcutta, Principal Commissioner of Income Tax, Kolkata-1 vs. Infinity Infotech Parks Ltd. for A.Y. 2007-08 dated 18th July, 2018 – The agreement of February 7, 2007, the land and the construction thereon were to be divided in a certain ratio as between the developer and the assessee. It was also the developer’s obligation under the agreement to make the construction or cause such construction to be made on the land. The possession that was made over by the assessee to the developer was not of the developer’s share as envisaged in the agreement, but of the entirety of the land for the construction to be made thereon. It is true that the developer could have retained possession of the land and declined to return possession thereof to the assessee since the developer was in physical control thereof. But such resistance of the developer would not have been protected under Section 53A of the Act of 1882. It was only after the apportionment of the areas upon the construction on the land being completed that the developer could have rightfully retained possession of the developer’s 61% share and resisted dispossession by discharging his obligation under the agreement and seeking refuge in terms of Section 53A of the Act of 1882 despite the formal conveyance pertaining to the developer’s entitlement not having being executed. In any view of the matter, the right of the developer to retain possession and protect such possession under Section 53A of the Act of 1882 could never have arisen prior to the construction being completed and the apportionment effected.
There is also a minor matter of the opening words of Section 45 of the Act of 1961 being given some effect while reading such provision. In terms of Section 45(1) of the Act, the expression “chargeable to income tax under the head ‘Capital gains'”, operates on “Any profits or gains arising from the transfer of a capital asset …”. There can be no tax payable unless there is any profit or gain that has arisen. It could never have been the Revenue’s case that there was any monetary profit or gain that accrued to the assessee at the time of the execution of the agreement of February 7, 2007.
In the light of the discussion above, the first ground urged by the Revenue does not appeal and the order of the Appellate Tribunal does not call for any interference as it set aside the erroneous view taken by the Commissioner in the order passed under Section 263 of the Act.