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TMI Blog2020 (9) TMI 825X X X X Extracts X X X X X X X X Extracts X X X X ..... te Tribunal is that one of the requisite conditions for the exercise of power under Section 263 of the Act that the Commissioner should consider the assessment order to be erroneous and prejudicial to the interest of the Revenue is not satisfied in the present case. In arriving at such conclusion, the appellate Tribunal has assigned cogent reasons. - Decided against revenue. - R/Tax Appeal No. 141 of 2020 - - - Dated:- 1-9-2020 - Honourable The Chief Justice Mr. Vikram Nath And Honourable Mr. Justice J.B.Pardiwala For the Appellant : Mr Manish Bhatt Senior Counsel With Mrs Mauna M Bhatt ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1 This Tax Appeal under Section 260A of the Income Tax Act, 1961 [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs that the assessee with the co-owner of the land in question entered into the development agreement with M/s. Synthesis Engineers, for which the assessee received consideration of ₹ 4,79,68,453/- with respect to the said land. The assessee showed the LTCG of ₹ 1,21,50,267/- after claiming exemption under Section 54F for the act of purchasing the property at ₹ 2,51,35,374/- and ₹ 1,00,00,000/- under Section 54EC of the Act, 1961. 6 It is the case of the department that upon due verification of the transaction, it was found that the property purchased for claiming various exemption under Section 54F was available only for only one property. In the course of the proceedings under Section 263 of the Act befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Section 263 of the Act confers power upon the Pr.CIT/CIT to call for and examine the records of a proceeding under the Act and revise any order if he considers the same to be erroneous and prejudicial to the interests of the Revenue. The Pr.CIT can take recourse to revision under Section 263 of the Act where the assessment order is erroneous as well as prejudicial to the interest of Revenue. The twin conditions are required to be satisfied simultaneously. The Pr.ClT in the present case has purported to act in exercise of power under s.263 of the Act and thereby has sought to cancel the assessment order of the AO passed under s. 143(3) of the Act. The Pr.ClT essentially observed that the AO has wrongly allowed deduction under s.54F of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der is erroneous and causing prejudice, that the Section will be attracted. An incorrect assumption of facts or incorrect application of law will satisfy the requirements of the order being erroneous. 9.2 In the instant case, it is demonstrated on behalf of the assessee that necessary inquiries were made towards computation of long term capital gain and claim of deduction under s.54F of the Act. The issue of eligibility of claim of deduction was thus present to the mind of the AO. Relevant documents were also shown to have been filed in the assessment proceedings. We also simultaneously notice that the assessee has placed reliance upon several judicial precedents namely; CIT vs. Smt. K. G. Rukminiamma (2011) 331 ITR 211 (Kamataka); C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comprising of three different units were duly placed and available on record. The AO was not found to be totally oblivious of the relevant facts. Thus, there is an apparent plausibility about the assent of mind of AO on admissibility of claim having regard to the law existing at the relevant time. In these circumstances, the AO can be safely presumed to have adopted a view which was plausible though not necessarily agreeable to the Revisional Commissioner. 9.3 An inquiry on the issue contemplated under 8.263 r.w. Explanation 2 of the Act has its limits implicit in it. It is only a very gross case of inadequacy in inquiry or where inquiry is per se mandated on the basis of record available before AO and such inquiry was not conducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the Revisional Commissioner for that of AO unless the decision of the AO is found to be erroneous. The claim under s.54F of the Act being plausible, the foundation for exercise of revisional jurisdiction in our view does not exist. We thus find merit in the plea of the assessee towards lack of authority of Pr.CIT to exercise jurisdiction conferred under s.263 of the Act in the instant case. The revisional order is accordingly set aside and quashed. 10 Being dissatisfied with the impugned order passed by the Appellate Tribunal, the Revenue is here before this Court with the present appeal. 11 Having heard the learned senior counsel appearing for the Revenue and having gone through the materials on record, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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