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2024 (9) TMI 1566 - AT - Income TaxRevision u/s 263 - as per CIT allowing the claim of exemption u/s 54F was erroneous and prejudicial to the interest of the Revenue - HELD THAT - It is pertinent to note that the ownership of the land is that of assessee s spouse and her brother-in-law and in fact the assessee has given these details for claiming u/s. 54F of the Act. The assessee has given all the details relating to the construction as well as the purchase of residential house within the prescribed period of 3 years. The contention of the Ld.DR that the land belonging to her spouse and her brother-in-law will not debarred the claim u/s. 54F of the Act as projected by the Ld.PCIT. But besides this the AO has made detailed inquiries at the time of the assessment proceedings and therefore section 263 cannot be invoked for merely the change in opinion/difference of opinion of the Ld.PCIT. AO at the time of the assessment proceedings has taken cognizance of all the details filed by the assessee and therefore the invocation of section 263 itself is not justifiable. Hence, the appeal of the assessee is allowed.
Issues:
1. Validity of assessment order passed under section 263 of the Income Tax Act, 1961. 2. Eligibility of exemption under section 54F of the Act based on ownership of property. 3. Justifiability of invoking section 263 of the Act by the Principal Commissioner of Income Tax. Detailed Analysis: 1. The appeal was filed by the assessee against the order passed by the Principal Commissioner of Income Tax (PCIT) under section 263 of the Income Tax Act, 1961, pertaining to the Assessment Year 2018-19. The PCIT observed that the assessee had claimed exemption under section 54F of the Act for capital gains on the sale of unlisted shares. The PCIT held that the investment in the construction cost of a house owned by the assessee's husband and brother-in-law was not eligible for the exemption. The PCIT set aside the assessment order passed by the Assessing Officer and directed a fresh assessment after making necessary inquiries. 2. The assessee contended that the Assessing Officer had thoroughly inquired into the exemption claimed under section 54F during the assessment proceedings. The ownership details of the property, including land and residential house, were submitted by the assessee. The assessee argued that the PCIT was unjustified in invoking section 263 as the exemption was claimed for the residential house owned by the assessee, not by others. The Assessing Officer had considered all relevant details and allowed the claim correctly. 3. The Departmental Representative supported the PCIT's order, stating that the land belonged to the assessee's spouse, and proper verification was lacking during the assessment proceedings. However, the Tribunal noted that the ownership details were provided by the assessee for claiming the exemption. The Tribunal found that the Assessing Officer had conducted detailed inquiries during the assessment and had taken into account all relevant information provided by the assessee. Therefore, the Tribunal held that the invocation of section 263 was not justified based on a mere difference of opinion. Consequently, the appeal of the assessee was allowed, and the original assessment order was upheld. In conclusion, the Tribunal allowed the appeal filed by the assessee, emphasizing that the Assessing Officer had appropriately considered the details provided by the assessee regarding the ownership of the property and the claim for exemption under section 54F of the Income Tax Act. The Tribunal found that the invocation of section 263 by the PCIT was not warranted based on the facts and circumstances of the case, leading to the decision in favor of the assessee.
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