1993 (2) TMI 119 - AT - Income Tax

Summary

Issues:
1. Correct date of sale of shares for Long Term Capital Gains.
2. Eligibility of relief under section 54F for purchasing residential flat.
3. Jurisdiction of Commissioner to exercise revisional powers under section 263.
4. Consideration of whether transaction constituted a purchase for relief under section 54F.

Detailed Analysis:
1. The appeal involved a dispute regarding the correct date of sale of shares for Long Term Capital Gains in the assessment year 1983-84. The assessee claimed the date of sale as 21-8-1982, leading to the claim of relief under section 54F of the Income-tax Act, 1961. The ITO accepted this date and granted deduction accordingly.

2. The eligibility of relief under section 54F for purchasing a residential flat was contested. The Commissioner initiated proceedings under section 263, questioning the transaction's nature as a purchase due to the absence of a registered sale deed. The Commissioner directed the ITO to withdraw the relief under section 54F, disputing the transaction's validity as a purchase.

3. The jurisdiction of the Commissioner to exercise revisional powers under section 263 was challenged by the assessee, arguing that the assessment order had merged with the CIT (Appeals) order, limiting the Commissioner's authority. The Commissioner rejected this argument and proceeded with the revision under section 263.

4. The Tribunal analyzed the transaction in detail, emphasizing the documentation and resolutions supporting the purchase of the residential flat by the assessee. The Tribunal referred to legal precedents and circulars to establish that the transaction constituted a valid purchase under section 54F. The Tribunal concluded that the relief under section 54F had been rightly granted by the ITO, and the assessment order was not erroneous or prejudicial to revenue.

5. The Tribunal highlighted that the CIT's finding on the eligibility of relief under section 54F was conclusive, making the order under section 263 unwarranted. The Tribunal dismissed the Commissioner's decision, emphasizing that the CIT (Appeals) had not addressed the specific issue, and the Commissioner's finding was not debatable. The Tribunal canceled the order under section 263, allowing the appeal in favor of the assessee.