| The Tax Publishers2020 TaxPub(DT) 0388 (Pune-Trib) INCOME TAX ACT, 1961
Section 263
Where AO had allowed assessee's claim of exemption under section 54F on assuming incorrect facts, i.e., without examining the claim of assessee in terms of law contemplated therein, then the PCIT had rightly invoked its jurisdiction under section 263 as the order passed by AO indicates non application of mind and lack of enquiry.
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Revision under section 263 - Erroneous and prejudicial order - Non-application of mind by AO -
Assessee was engaged in trading of batteries and coolers. PCIT invoked section 263 on the allegation that the order passed by the AO was erroneous and prejudicial to the interest of revenue as the claim of assessee was allowed by the AO under section 54F in violation of the conditions mentioned in said section because assessee had made investment in two residential units. Further, as the purchase price of property was shown at 1346% above market price but the AO had failed to verify the issue by examining the flats nearby. Assessee contended that the date of execution of sale deed by the developer was to be considered as date of purchase of residential unit. Further, he contended that the value ascertained by the Stamp Valuation Authority was only to facilitate the payment of stamp duty for registering the sale deed was always varies from market value. Held: Assessee had shown investment in two residential units and that units were purchased by him beyond the allowed period of one year before sale of capital asset. Thus, AO had assumed incorrect facts to satisfy the requirement under section 54F. Hence, there was a lack of enquiry by the AO. Further, as regards the substantial increase of sale price shown by assessee vis-a-vis the value of price ascertained by Stamp Valuation Authority, it appeared by the time of framing of assessment that the reply from the Assistant Valuation Officer (AVO) as regards the valuation of land and the cost of acquisition as on 01-04-1981 had not been received by the AO and without considering the same he completed the assessment and allowed the claim of assessee under section 54F. Thus, AO had failed to examine the claim of assessee in terms of law contemplated therein. Hence, as the AO had failed to apply his mind to the case in all perspective in terms of conditions contemplated in provisions under section 54F, PCIT rightly invoked its jurisdiction under section 263.
REFERRED : M/s. Fibre Boards (P) Ltd. v. CIT (2015) 62 taxmann.com 135 (SC) : 2015 TaxPub(DT) 3219 (SC),Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC),Virbhadra Singh (HUF) through its Karta Shri Virbhadra Singh v. PCIT (2017) 400 ITR 530 (HP) : 2017 TaxPub(DT) 4401 (HP-HC),CIT -8 v. Fine Jewellery (India) Ltd. Income Tax Appeal No. 296 of 2013 Order dated 03-02-2015 : 2015 TaxPub(DT) 1385 (Bom-HC),Lalitkumar Kesarimal Jain v. DCIT ITA No. 1345/PUN/2017 for assessment year 2012-13 Order dated 24-09-2019 : 2019 TaxPub(DT) 6574 (Pune-Trib),Rajesh Chandrakant Shah (HUF) v. Pr. CIT ITA No. 1028/PUN/2016 for assessment year 2011-12 Order dated 06-02-2019,The Deccan Paper Mills Co. Ltd. v. CIT ITA Nos.1013 & 1635/PUN/2014 for the assessment years 2009-10 & 2010-11 Order dated 10-10-2017
FAVOUR : In assessee's favour
A.Y. :
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