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2022 (6) TMI 1157 - AT - Income TaxRevision u/s 263 - Admissibility of deduction u/s 54 and 54F - as submitted claim of deduction u/s 54 and 54F has been accepted in the case of the assessee s brother, who was owning 50% share in the above property - HELD THAT - It is seen from the paper book that the assessee has made a detailed reply to the show cause notice by producing relevant document viz. sale deed; property tax receipts, copy of Income-Tax Returns for earlier years showing rental income from the above property; copies of bank accounts and copy of the Will executed by the assessee s father. Without appreciating the above documents, the ld.CIT has come to a conclusion that Plot No.34 does not mention anywhere that there was a residential building sold through the sale deed. Further, CIT absolutely erred in stating that the assessee has made 100% claim of deduction whereas she has only 50% as co-owners in the above properties and from going through the Sale Deeds both the lands are vacant lands. Thus, the above finding of the ld.CIT is not correct from the perusal of the above record. The ld.CIT has not given due credence to the reply filed by the assessee and passed this revision order. However, it can be seen from the co-owner, assessee s brother Shri Vijay Patel s case that similar deduction was being allowed by the ITO (International Taxation), Baroda after detailed inquiry, wherein the assessee s brother has also given detailed reply dated 12.12.2011. After considering the above reply, the ITO(International taxation) has accepted the returned income and allowed the deduction by passing order under section 143(3) of the Act dated 29.12.2011 and that assessment order was not subject matter of revision or reopening by the Department, but in the case of the assessee being co-owner of the same properties, a show cause notice under section 263 of the Act dated 23.8.2013 was issued and explanation was called for from the assessee. Here it is to be noted that ld.CIT has not verified, what happened to other co-owner viz. assessee s brother Shri Vijay Patel case which assessment has attained finality. Thus different treatments cannot be given on the same set of facts in respect of different co-owners of a common piece of land which are subjected to capital gains. If such action on the part of Revision Authority is approved, it would militate against the principle of equality of law as enshrined in the Article 14 of the Constitution. Further, it is seen that the ld.CIT has not taken any steps for reopening the case of other co-owner viz. Shri Vijay Patel and thereby accepted similar long term capital gain and claim of deduction under section 54 and 54F of the Act on the said transaction. Therefore, in our considered view, the assessee cannot be treated differently for similar transaction. This ground of appeal of the assessee is allowed on this preliminary aspect, and Revision Order under section 263 of the Act is hereby quashed. - Decided in favour of assessee.
Issues Involved:
1. Legality of invoking Section 263 by the CIT. 2. Validity of the assessment order under Section 143(3). 3. Provision of relevant information by the assessee. 4. Correctness of the 100% deduction claim by the assessee. 5. Consideration of detailed submissions by the CIT. 6. Direction for a fresh assessment by the CIT. Issue-wise Detailed Analysis: 1. Legality of invoking Section 263 by the CIT: The assessee argued that the CIT erred in resorting to proceedings under Section 263 of the Income Tax Act, 1961, claiming that the original assessment order under Section 143(3) was neither erroneous nor prejudicial to the interest of the Revenue. The Tribunal noted that the CIT failed to appreciate the detailed reply and documents provided by the assessee, including sale deeds, property tax receipts, and income tax returns. Additionally, the Tribunal observed that the co-owner's similar claim of deduction was accepted by the Department without invoking Section 263, thus supporting the assessee's contention that differential treatment was unjustified. 2. Validity of the assessment order under Section 143(3): The CIT set aside the original assessment order, directing a de novo assessment, citing that the AO did not properly examine the evidence supporting the claim of exemption under Sections 54 and 54F. The Tribunal found that the AO had indeed conducted a detailed inquiry and accepted the assessee's claim after due consideration. The Tribunal emphasized that the CIT's action was based on assumptions without appreciating the evidence on record. 3. Provision of relevant information by the assessee: The CIT claimed that the assessee failed to furnish all relevant information. However, the Tribunal noted that the assessee had provided comprehensive documentation, including sale deeds, property tax receipts, and evidence of rental income from the property. The Tribunal concluded that the CIT did not give due credence to these documents, which were sufficient to support the assessee's claim. 4. Correctness of the 100% deduction claim by the assessee: The CIT observed that the assessee wrongly claimed 100% deduction despite owning only a 50% share in the property. The Tribunal clarified that the deduction was claimed based on the full investment made by the assessee from her 50% share in the sale proceeds, which was in accordance with the law. The Tribunal found the CIT's observation to be incorrect and unsupported by the evidence. 5. Consideration of detailed submissions by the CIT: The assessee contended that the CIT failed to appreciate the detailed submissions made during the proceedings under Section 263. The Tribunal agreed, noting that the CIT did not adequately consider the replies and documents provided by the assessee, which substantiated her claim for exemption under Sections 54 and 54F. 6. Direction for a fresh assessment by the CIT: The CIT directed the AO to pass a fresh order de novo, which the assessee argued was unnecessary and would prolong the proceedings. The Tribunal found that the AO had already conducted a thorough examination during the original assessment, and there was no need for a fresh assessment. The Tribunal quashed the CIT's order, emphasizing that the original assessment was neither erroneous nor prejudicial to the interest of the Revenue. Conclusion: The Tribunal allowed the appeal of the assessee, quashing the revision order under Section 263. It held that the CIT's invocation of Section 263 was unjustified, as the original assessment order was based on a thorough examination of evidence and was not erroneous or prejudicial to the interest of the Revenue. The Tribunal emphasized the principle of equality of law, noting that differential treatment of co-owners in similar circumstances was improper. The appeal was allowed, and the order for a fresh assessment was set aside.
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