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TMI Blog2018 (12) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... d number 1 of the appeal is allowed. Whether deduction u/s 54F will include the expenditure incurred by the assessee on account of heater, air conditioner and home kitchen - Held that:- As we have already quashed the rectification notice issued by the assessing officer to the extent of adjustment to the capital gain computed by the assessee. Accordingly, same is dismissed. - ITA No. 3446/Del/2015 - - - Dated:- 29-11-2018 - Shri Kuldip Singh, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Assessee : Shri Sumit Mangal, CA, Ms. Arzoo Batta, CA For the Revenue : Shri V.K. Jiwani, Sr. DR ORDER PER PRASHANT MAHARISHI, A. M. 1. This appeal is filed by the assessee against the order of the ld CIT(A)-18, New Delhi dated 02.03.2015 for the Assessment Year 2006-07. 2. The assessee has raised the following grounds of appeal:- 1. The learned Commissioner of Income-tax (Appeals)-18, (ld CIT(A) and Deputy Commissioner of Income Tax, Circle-31(1) (Ld AO) have erred in making adjustments to the income of the appellant under section 154 of the Act on an issue which was not a mistake apparent from records and thus out of the scope of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 54EC of the income tax act being investment made in national housing bank bonds. He further noted that investment in national housing bank bonds are less than the amount of long-term capital gain the provisions of clause (b) of section 54EC (1) are applicable to the case of the assessee. Consequently, the proportionate of the capital gain invested is exempt under section 54EC (1) (b). Therefore, according to the AO the chargeable long-term capital gain comes to INR 7 683583/ leading to the loss of revenue. He therefore held that since the mistake is apparent from record the same is required to be rectified. He therefore proposed that the true value of long-term capital gain as per the provisions of section 54EC is required to be re-computed. 8. Vide letter dated 13/05/2010 the assessee filed a reply to the show cause notice issued to the assessee under section 154 of the income tax act. It was stated that that rectification has proposed on 2 issues. The first issue is the adoption of the revised return income and the second is the computation of the long-term capital gain. On the 1st issue the assessee submitted that it does not have any objection in adopting the revised r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spute before the learned Commissioner of income tax appeals as well as before us. 11. Assessee preferred an application under section 154 of the income tax act against that order wide letter dated 09/11/2010 before the learned assistant Commissioner of income tax stating that while passing the order under section 154 read with section 143 (3) of the income tax act dated 01/10/2010. The disallowance made by the learned assessing officer under section 54EC of the act is a mistake apparent from the record as there is no error in the claim of the assessee or originally made. 12. Meanwhile the assessee also filed an appeal before the learned Commissioner of income tax appeals contesting that the claim of deduction made by the assessee is correct and further the withdrawal of the excess deduction under section 54F is also incorrect. The assessee also submitted that the above adjustment made by the learned assessing officer is beyond the scope of the provisions of section 154 of the income tax act. 13. The learned Commissioner of income tax (appeals) XVII,, New Delhi passed order dated 5/11/2012 a set aside the issue of the computation of the capital gain exemption under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of the act, and the ground number 4 and 5 stating general grounds were dismissed. However, no such reasons were given in the order of the learned Commissioner of income tax appeals. With respect to the 3rd ground of the appeal regarding exclusion of INR 1231260/ incurred by the appellant in relation to the construction of residential house property for purchase of gadgets the action of the learned assessing officer was confirmed and on this ground the appeal of the assessee was dismissed. 17. Against this order, the appeal has been preferred before us. 18. The ld AR firstly submitted that above adjustment cannot made u/s 154 of the Act as there is no mistake apparent from the record. He submitted that the order passed by the ld AO is cryptic and without application of mind. He further submitted that the ld CIT(A) has not recorded any reason for not adjudicating the objection u/s 154 of the Act. He further stated that there is change of opinion and in such circumstances; the provision of section 154 of the Act does not apply. He further stated that when the mistake is to be discovered on the interpretation or construction of the provision of the Act it can never be a mistak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, the chargeable LTC comes to INR 7 683583/ leading to the loss of revenue. Since the mistake is apparent from the record the same is sure to be rectified. On careful reading of the above reasons for the invoking of the provisions of section 154 of the income tax act. It is apparent that the learned assessing officer was not considering the issue of the cost of the residential house, but the provisions of section 54EC of the act. In view of this, we are of the opinion that even in the show cause notice the learned assessing officer has not noted that the assessee has shown the incorrect cost of residential house property. The assessing officer is to pass detailed order to show that certain cost of gadgets have been included by the assessee in the cost of residential house property for claiming exemption under section 54F of the act. In view of this we are of the opinion that the impugned adjustment that is proposed to be made by the learned assessing officer to the total income of the assessee is not on account of mistake apparent from record. In view of this we are not inclined to uphold the order of the learned assessing officer so far as it relates to the adjus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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