Siddharth Bhaskar Shah Vs PCIT (ITAT Mumbai)
ITAT Mumbai Quashes 263 Revision – Six Flats as Triplex Held One House Under Sec.54F- Purchase of Interconnected Units Qualifies as Single Residence – Tribunal Favors Assessee
ITAT Mumbai allowed assessee’s appeal & quashed revisionary proceedings u/s 263. Tribunal held that AO had made detailed enquiries before allowing deduction u/s 54F on investment in a triplex flat comprising six interconnected units & hence PCIT could not revise the order merely on a change of opinion.
Assessee had sold unquoted shares for Rs.17.78 crore & claimed deduction of Rs.16.83 crore u/s 54F by investing in six flats (Nos.1402, 1403, 1502, 1503, 1602 & 1603) in a Bengaluru project “APAS VALMARK.” AO issued a 21-page show cause notice, examined the agreement, design, & assessee’s detailed replies, & accepted the claim treating the six flats as one residential house since they were combined into a single triplex with one kitchen, one living room & internal stairways. Assessment was thus completed without variation.
PCIT, however, revised the order holding that six separate flats could not be treated as one residential house & that assessee had used a colourable device to inflate deduction. He set aside the assessment as erroneous & prejudicial to Revenue’s interest.
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