The Chandigarh Bench Income Tax Appellate Tribunal (ITAT), has deleted the revision order passed u/s 263 based on presumption.
The appellant, Shri Jangpal Singh Tanwar derived income from the head salaries and income from other sources and e-filed his return declaring an income of Rs.4,21,230/-. The assessee has purchased the property in his name being a retired pensioner along with his wife and son wherein the entire investment amounting to the long-term capital gain (LTCG) available to the assessee was fully made by the assessee and claimed deduction u/s 54F.
The Assessing Officer accepted the returned income. Later the assessment was set aside by PCIT u/s 263 alleging that the AO failed to examine the assessee’s eligibility for exemption u/s 54. Against which appellant filed an appeal before ITAT.
The counsel for the appellant submitted that the presumption drawn by the PCIT that 1/3rd share in the newly purchased property belonged to the assessee is unjustifiable, arbitrary and a whimsical conclusion drawn as in the Purchase Deed, there is no such mention of any specific allotment of shares in the names of the family members.
The Coram of Smt. Diva Singh, Judicial Member,andMr. Vikram Singh Yadav, Accountant Member have observed that the entire Long Term Capital Gain from the sale of the property has been applied to the new property. Documents substantiating the claim are available on record and have not been upset, thus the revisionary power u/s 263 of the Act cannot be allowed to be exercised in a casual arbitrary manner.The presumption that the assessee’s wife and son had 1/3rd share each is an inference based on no facts. The PCIT has to point out the error in the order and that too such an error can be said to be prejudicial to the interests of the Revenue.
The Tribunal has held that “we find no evidence for supporting the conclusion that only 1/3rd share belonged to the assessee. The exercise of power by the PCIT in these peculiar facts cannot be upheld”.
Advocate Mr.Tej Mohan Singh appeared for the appellant and Mr. Vivek Nangia appeared for the revenue.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.
