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2016 (1) TMI 456 - AT - Income TaxRevision u/s 263 - Eligibility for the benefit u/s 54F need to be denied as per CIT(A) - Held that - The transfer was completed in terms of section 2(47)(v) by giving possession of the property in terms of the sale agreement dated 13.6.2005 registration was delayed on bonafide reasons which was beyond the control of the assessee and sale deed was executed on 25.11.2005 was only a legal formality. The jurisdictional High Court in the case of CIT Vs. Anand Food Products (2013 (11) TMI 1444 - ANDHRA PRADESH HIGH COURT ) has observed that during the assessment proceedings the assessing officer had not only taken into account all the details but also disallowed some expenditure and made addition whenever same was required. A decision of the Assessing Officer could not be prejudicial to the interest of the revenue simply because it did not make detailed discussion and upheld the order passed by the Tribunal. Keeping in view of the above judicial precedent, we are of the opinion that the order passed by Assessing Officer is neither erroneous nor prejudicial to the interest of the revenue and therefore the order passed by the Ld. CIT u/s 263 of the Act cannot survive. So far as merits of the case is concerned in respect of the claim u/s 54F of the Act, the Hon ble Delhi High Court has considered this issue in the case of Balraj Vs. CIT (2001 (12) TMI 51 - DELHI High Court ) and observed that for claiming benefit u/s 54F of the Act, it is not necessary that the assessee should become a owner of property purchased by him by registration of documents. In the present case, there is a memorandum of family agreement dated 15.10.2006 between assessee and his father & mother. In accordance with the above agreement assessee is entitled for 1/3rd share of the property. Therefore, in our opinion the assessee is entitled for the claim u/s 54F of the Act. The decision of the Delhi High Court squarely applies to the facts of the above case and we hold that the Assessing Officer on merits has allowed the case u/s 54F of the Act in accordance with law. This cannot be a case for revision u/s 263 of the Act. - Decided in favour of assessee
Issues Involved:
1. Whether the assessment order passed by the Assessing Officer (AO) was erroneous and prejudicial to the interest of the revenue. 2. Eligibility of the assessee for claiming benefit under section 54F of the Income-Tax Act, 1961. Issue-wise Detailed Analysis: 1. Whether the assessment order passed by the Assessing Officer (AO) was erroneous and prejudicial to the interest of the revenue: The assessee, a non-resident, filed a return of income declaring nil income, which was processed under section 143(1) and subsequently assessed under section 143(3) of the Income-Tax Act, 1961. The AO determined long-term capital gain at Rs. 1,23,13,044/-. The Commissioner of Income Tax (CIT) issued a show cause notice under section 263, arguing that the AO's order was erroneous and prejudicial to the interest of the revenue because the AO did not properly examine the market value of the property at the time of its registration. The CIT observed that the assessee sold the property for Rs. 60 lakhs, while the market value at the time of registration was Rs. 2,17,80,000/-. The CIT believed that the AO should have adopted this higher market value for capital gains calculation. However, the Tribunal found that the AO had adopted the market value of Rs. 1,59,72,000/- as per section 50C based on the date of the General Power of Attorney (GPA) execution, which was 9.7.2007, when the property was transferred to the purchaser. The Tribunal held that the AO's adoption of the market value on the date of GPA execution was correct and that the subsequent registration date was immaterial for the assessee's capital gains calculation. The Tribunal concluded that the AO made a detailed enquiry and applied his mind, thus the order was neither erroneous nor prejudicial to the revenue. The Tribunal referenced judicial precedents, including the Gujarat High Court in CIT Vs. Arvind Jewellers and the Hyderabad Tribunal in CIT Vs. S. Venkata Reddy, supporting the view that the AO's detailed assessment cannot be revised merely because a different view is possible. 2. Eligibility of the assessee for claiming benefit under section 54F of the Income-Tax Act, 1961: The CIT contended that the assessee was not eligible for the benefit under section 54F because the investment was made in a property owned by the assessee's father, not by the assessee. The AO, however, had allowed the claim under section 54F after verifying that the sale consideration was invested in a house property at Banjara Hills, Hyderabad, in which the assessee had a 1/3rd share as per a family agreement. The Tribunal noted that the AO had examined all relevant details and allowed the claim under section 54F. The Tribunal referenced the Delhi High Court judgment in Balraj Vs. CIT, which held that for claiming benefit under section 54F, it is not necessary for the assessee to be the registered owner of the property. The Tribunal found that the assessee, having a 1/3rd share in the property as per the family agreement, was entitled to the benefit under section 54F. The Tribunal held that the AO's order allowing the claim under section 54F was in accordance with the law and could not be revised under section 263. The Tribunal quashed the CIT's revision order under section 263, stating that the AO's detailed enquiry and application of mind rendered the order neither erroneous nor prejudicial to the interest of the revenue. Conclusion: The Tribunal allowed the appeal of the assessee, holding that the assessment order was neither erroneous nor prejudicial to the interest of the revenue, and the assessee was entitled to the benefit under section 54F. The Tribunal quashed the CIT's revision order under section 263.
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