The Kolkata Bench of Income Tax Appellate Tribunal has held that original assessment was neither erroneous nor prejudicial to the revenue and quashes revisional proceedings.
The appellant, Deepak Kr. Singh, is an individual deriving income from salary, dividend and other sources. The assessee filed e-return of income for the assessment year 2016-17 declaring Income of Rs.1,04,94,280/-. Assessing Officer completed the assessment accepting the returned income.
Subsequently Principal CIT on examination of the assessment records noticed deduction under section 54F of the Act at Rs.15,72,23,601/- for the investment for purchase of four residential house properties. 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. Not convinced with the examination and investigation carried out by the AO initiated proceedings under section 263 of the Act.
After considering the contentions of the assessee PCIT came to a conclusion that 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/- and for the purchase of two flats in other tower, assessment order framed under section 143(3) was set aside with a direction to the AO to re-compute the deduction under section 54F of the Act. Aggrieved by the order assessee filed appeal before ITAT.
Mr. A.K. Rastogi, counsel for the assessee submitted that the Assessing Officer raised various queries relating to claim of deduction under section 54F of the Act and the assessee had filed complete details with documents evidencing the purchase of flats and the Assessing Officer has examined the matter and applied his mind, the PCIT erred in initiating the proceedings under section 263 of the Act.
The Tribunal observed that the issue raised in the show-cause notice has already been examined by the AO 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 and there remains no scope for the PCIT to invoke the jurisdiction under section 263 of the Act.
The Coram of Mr. Manish Borad, Accountant Member and Sonjoy Sarma, Judicial Member held that “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”.
Mr. Sanjay Mukherjee, appeared on behalf of revenue/respondent.
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