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2023 (1) TMI 603 - AT - Income TaxScope of assessment by converting limited scrutiny to complete scrutiny while completing the assessment u/s 143(3) - cash deposits in his bank account during demonetization period - Deduction u/s 54F - assessee had purchased the property in the name of his son - HELD THAT - On perusal of the order of AO, we found that Assessing Officer had restricted the case to limited scrutiny under CASS for verification of cash deposits into the bank account of assessee and the other issue of claim of deduction by the assessee u/s 54F was interlinked with the core issue. While doing so, AO had sought various details besides the source for the cash deposits. The issue in the present appeal is with respect to addition on account of capital gains from sale of immovable property. In our view, the AO was within his right to examine the issue before us and we do not find any fault on the part of Assessing Officer to deny the deduction in the case selected for limited scrutiny. From the perusal of the order of ld.CIT(A) and the grounds raised before him, it is clear that the issue raised before the ld.CIT(A) was restricted to the deduction claimed and the assessee has not stated that the agricultural land sold by the assessee is not a capital asset within the meaning of Income Tax Act. In our view, the order of ld.CIT(A) is in accordance with the authoritative pronouncement of Ganta Vijaya Lakshmi 2014 (4) TMI 1226 - ANDHRA PRADESH HIGH COURT and therefore, we do not find any reason to interfere with the order of ld.CIT(A). Accordingly, the appeal of the assessee is dismissed.
Issues:
1. Disallowance of exemption under section 54F of the Income Tax Act. 2. Scope of assessment expanded from limited to complete scrutiny. 3. Addition of capital gain by the Assessing Officer. 4. Jurisdictional High Court's order on the subject matter. 5. Claiming deduction under section 54F for property purchased in the name of son. Analysis: Issue 1: Disallowance of exemption under section 54F of the Income Tax Act The appellant contested the disallowance of Rs 46,20,000/- exemption under section 54F. The Assessing Officer denied the claim as the property was purchased in the name of the appellant's son. The appellant argued that the investment was intended for residential property as per sections 54 and 54F. However, the CIT(A) upheld the decision, citing the requirement that the investment must be made in the assessee's own name to claim the deduction under section 54F. The High Court's order in a similar case supported this interpretation, leading to the dismissal of the appeal. Issue 2: Scope of assessment expanded from limited to complete scrutiny The appellant raised concerns about the expansion of scrutiny assessment scope by the Assessing Officer. The appellant cited CBDT's instructions and standard operating procedures for limited scrutiny cases. However, the Tribunal found that the Assessing Officer acted within the scope of limited scrutiny by examining the cash deposits and related issues. The Tribunal upheld the Assessing Officer's decision to deny the deduction, dismissing the appeal on this issue. Issue 3: Addition of capital gain by the Assessing Officer The Assessing Officer added Rs 46,20,000/- towards capital gain, leading to a dispute. The appellant explained the source of cash deposits during demonetization and claimed deduction under section 54F. The Assessing Officer rejected the claim due to the property being in the son's name. The CIT(A) and Tribunal supported this decision based on legal interpretations and precedents, resulting in the dismissal of the appeal. Issue 4: Jurisdictional High Court's order on the subject matter The Tribunal referenced the jurisdictional High Court's order in a specific case to support the decision regarding the disallowance of the deduction under section 54F. The Tribunal found the reasoning of the CIT(A) in alignment with the High Court's ruling, reinforcing the dismissal of the appellant's appeal. Issue 5: Claiming deduction under section 54F for property purchased in the name of son The appellant's claim for deduction under section 54F was rejected as the property was purchased in the son's name. The Tribunal upheld this decision based on legal interpretations and precedents, concluding that the investment must be in the assessee's name to qualify for the deduction under section 54F. In conclusion, the Tribunal dismissed the appeal of the assessee, upholding the decisions of the Assessing Officer and the CIT(A) regarding the disallowance of the exemption under section 54F and the addition of capital gain. The Tribunal found no fault in the actions of the Assessing Officer and affirmed the jurisdictional High Court's order, leading to the final dismissal of the appeal.
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