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4. Subsequently, the Ld. PCIT on examination of records noted that the Assessing Officer has not inquired into the applicability of the provisions of section 43CA of the Act and addition of interest cost of Rs.1,52,87,640/- to the cost of land despite the same being capitalized separately. He, therefore, was of the opinion that the order passed by the Assessing Officer has become erroneous and prejudicial to the interest of the Revenue for which he issued a notice u/s 263 of the Act to the assessee to explain as to why the order passed by the Assessing Officer should not be set aside in terms of provisions of Explanation (2) to section 263(1) of the Act. The relevant contents of notice read as under:

03. On perusal of the assessment records it is seen that the assessee had sold the land at Survey No. 24 for a consideration less than the market value adopted for stamp duty purposes, the provisions of section 43CA of the Act are squarely applicable in the case of the assessee. Further, the assessee had already offered an amount of Rs.3,05,475/- u/s 43CA of the Act in respect of this transaction in its computation of income, the difference amount of Rs.38,32,312/- (Rs.41,37,787 Rs.3,05,475) remained to be taxed as per the provisions of section 43CA of the Act. The Assessing Officer (AO) failed to do the same during the course of the assessment proceedings.

6. The assessee in its submissions has stated that the date of fixing of agreement was 18.08.2011 and the assessee had already received an amount of Rs.3,76,20,664/- on 25/11/2011, thus, provisions of section 43CA are not applicable in its case. However, it was further stated that the assessee had already offered an amount of Rs. 3,05,475/- u/s 43CA of the Act. Thus, both the submissions of the assessee are contradictory. It is seen from the records that the assessee had sold the land at less than the market value adopted for stamp duty purposes and therefore, the provisions of section 43CA of the Act are squarely applicable in the case of the assessee. It is seen that the assessee had offered only Rs. 3,05,475/- u/s 43CA of the Act instead of Rs. 41,37,787/- in respect of this transaction in its computation of income. Thus, the difference amount of Rs. 38,32,312/- (Rs.41.37,787 Rs.3,05,475) remained to be taxed as per the provisions of section 43CA of the Act. The AO failed to examine this issue properly during the course of the assessment proceedings. The AO should have verified/enquired/examined this issue.

7. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. PCIT and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. It is an admitted fact that the assessee had sold the land at Survey No.24 for a consideration less than the market value adopted for stamp duty purposes for which the provisions of section 43CA of the Act are squarely applicable. Although there is a difference as per the provisions of section 43CA of the Act of Rs.38,32,312/-, the assessee had offered only an amount of Rs.3,05,475/- and the Assessing Officer has not bothered to inquire about the same. Similarly, the issue relating to the addition of interest of Rs.1,52,87,640/- to the cost of land despite debiting such interest as finance cost in the Profit and Loss Account remained to be examined by the Assessing Officer. Further, a perusal of the assessment order shows that it is a very brief order without touching the two vital issues pointed out by the Ld. PCIT.