Case Law Details
Paras Chinubhai Jani Vs Pr. CIT (ITAT Ahmedabad)
In this case AO has not given any reason as to how purchase of land prior to transfer of capital asset is eligible for claim of deduction under s. 54B(1) of the Act. Thus, as a corollary, the AO has accepted the claim of deduction by oversight and without any application of mind in this regard. No evidence has been adduced before us to show that the issue was present to the mind of the AO. A wrong acceptance of claim of deduction would not given inference towards application of mind. Secondly, the eligibility of deduction under s.54B of the Act in respect of land acquired prior to transfer of capital asset is clearly opposed to the plain provision of the Act and thus apparently not sustainable having regard to express the provision of the statute. The legislature in its own wisdom has used the expression before the transfer of long term asset as well as after the transfer of capital asset at appropriate places viz. Section 54 of the Act. The intention of the legislature is thus quite clear. Therefore, claim of deduction accepted by the AO despite unequivocal language of the Act, in our view, is erroneous as contemplated under s. 263 of the Act. Such error on the part of the AO has caused definite prejudice to the interest of the Revenue. The action of the Pr.CIT is thus within the realm of powers vested under s.263 of the Act. The Pr.CIT has distinguished the case laws cited which is found to be in order. We do not see irregularity in the assumption of jurisdiction by the Pr.CIT under s.263 of the Act. We therefore decline to interfere.
FULL TEXT OF THE ITAT JUDGMENT
The captioned appeal has been filed at the instance of the assessee seeking to impugn the revisional order passed by the Principal Commissioner of Income Tax-5, Ahmedabad (‘Pr.CIT’ in short) under S. 263 of the Income Tax Act, 1961 (the Act) dated 17.03.2017 in connection with the assessment order passed by the AO under s. 143(3) of the Act dated 20.02.20 15 concerning AY. 20 12-13.
2. As per the grounds of appeal, the essential grievance of the assessee is that in the facts and the circumstances of the case the CIT was not justified in exercising revisionary powers under s.263 of the Act and thereby setting aside the assessment order passed under s.143(3) of the Act with a direction to the AO to frame assessment afresh after proper examination, inquiry and verification with reference to deduction under s.54B of the Act claimed by the assessee.
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