Case Law Details
Deepak Kr. Singh Vs PCIT (ITAT Kolkata, Patna Bench)
Facts- The assessee is an individual deriving income from salary, dividend and other sources. The assessee filed e-return of income on 22.07.2016 for the AY 2016-17 declaring Income of Rs.1,04,94,280/-. The case selected for complete scrutiny under Computer Assisted Section of Cases for Scrutiny (in short ‘CASS’) to verify (a) whether the claim of exempt income is correct; (b) whether deduction from capital gain has been claimed correctly. Notices were duly served upon the assessee under section 143(2) and 142(1) of the Act and the replies were submitted by the assessee on various dates as appearing in the assessment order. Ld. Assessing Officer completed the assessment accepting the returned income. Subsequently ld. Principal CIT on examination of the assessment records noticed that the assessee claimed deduction under section 54F of the Act at Rs.15,72,23,601/- for the investment made in the residential houses. This deduction was claimed against the capital gain earned by the assessee from the sale of unquoted equity shares of Cachet Pharmaceuticals Pvt. Limited and Indchemie Health Specialities Pvt. Ltd. Ld. PCIT observed that the said deduction under section 54F of the Act has been claimed for purchase of four residential house properties. He was not convinced with the examination and investigation carried out by the ld. Assessing Officer and in order to carry out the proceedings under section 263 of the Act issued following show-cause notice dated 08.02.2019.
During the course of appellate proceedings under section 263 of the Act, the assessee vide reply dated 01.05.2019 stated that detailed enquiry was made by the ld. Assessing Officer and the assessment order cannot be termed as erroneous as well as prejudicial to the interest of the revenue on the ground that proper verification on the issues raised in the notice under reference was not made. Further referring to the various judicial decisions and judgments, it was stated by the assessee that it is settled principle that powers under section 263 of the Act cannot be exercised on the ground that the assessment order is cryptic and/or not a speaking order.
PCIT after considering the contentions of the assessee, various replies filed during the course of revisionary proceedings, came to a conclusion that out of the deduction u/s. 54F of the Act of Rs.15,72,23,601 the assessee is eligible for deduction for the two flats adjacent to each other in one floor for which the purchase consideration was paid at Rs.9,36,98,841/-. Ld. PCIT was also satisfied with the sale consideration from sale of unquoted equity shares. However, ld. PCIT was of the view that for the purchase of two flats in other tower, the AO erred in granting the deduction under section 54 of the Act. Accordingly the assessment order framed under section 143(3) dated13.12.2018 was set aside with a direction to the Assessing Officer to re-compute the deduction under section 54F of the Act. Aggrieved the assessee is now in appeal before this Tribunal.
Conclusion- We are of the view that since the issue raised in the show-cause notice has already been examined by the ld. Assessing Officer in detail by conducting adequate enquiry calling for material evidence and other documents supporting the claim of deduction under section 54F of the Act, proper application of mind and taken a plausible view in light of the settled judicial precedence as referred by the ld. counsel for the assessee, there remains no scope for the ld. PCIT to invoke the jurisdiction under section 263 of the Act. We, therefore, quash the impugned proceedings carried out under section 263 of the Act and hold that assessment order under section 143(3) of the Act dated 13.12.2018 is neither erroneous nor prejudicial to the revenue and thus deserves to be restored. Thus the grounds of appeal filed by the assessee are allowed.
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