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TMI Blog2021 (2) TMI 674X X X X Extracts X X X X X X X X Extracts X X X X ..... inal payment and taking over the possession of the flat. Merely because the assessee has made payments in instalments and some of the instalments were paid prior to one year window before the date of sale of the original assets would not debar the assessee from claim of deduction u/s 54. We are therefore of the considered view that all the relevant facts were on record, duly examined by the AO and the claim of deduction has been rightly allowed by the AO as per mandate of provisions of section 54 of the Act. The order so passed by the AO cannot therefore be held as erroneous in so far as prejudicial to the interest of the Revenue. Thus, the order of the Pr CIT is hereby set-aside - Decided in favour of assessee. - ITA No. 272/JP/2020 - - - Dated:- 15-2-2021 - SHRI SANDEEP GOSAIN , JM And SHRI VIKRAM SINGH YADAV , AM Assessee by : Sh. Rajeev Sogani ( CA ) Miss Shivangi Samdhani ( CA ) Revenue by : Sh. B. K. Gupta ( CIT ) ORDER PER : VIKRAM SINGH YADAV , A. M. This is an appeal filed by the assessee against the order of ld. Pr. CIT-1, Jaipur dated 23.03.2020 wherein the assessee has raised the following grounds of appeal. 1. In the facts and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chased 5. The ld. AO while framing the assessment applied his mind on the entire material placed before him. The fact that various payments were made prior to one year of date of sale was very much evident from the papers. Only on being satisfied with the claim of the assessee, after factual and legal assessment that the date of purchase and date of taking possession fall within one year prior from the date of sale, ld. AO accepted the claim of deduction u/s 54 of the Act. 6. In the revisionary proceedings ld. PCIT held that the order of ld. AO is erroneous. Ld. PCIT has held that ld. AO failed to apply her mind because necessary details were not examined. The deduction was allowed without any verification/ enquiry and, therefore, the issue that various payments were made before one year from the date of sale skipped the attention of ld. AO. 7. It is submitted that whether or not ld. AO had applied her mind is subjective and will depend upon factual matrix of each case. The AO can examine a claim or subject matter even without raising a written query where the issue relating to claim or subject matter is too apparent or obvious. In the present case ld. AO was conducting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 017 squarely cover the case of the assessee in his favour. Thus, ld. AO adopted the only view possible or at worst one of the plausible view. Reliance is placed on the decision of Hon ble Supreme Court in the case of Max India Ltd [2007] 295 ITR 282 iii. Not prejudicial to the interest of revenue- The view adopted by ld. AO is a judicial views. iv. Ld. PCIT erred in holding the order of ld. AO to be erroneous and in the disguise of the same has tried to replace her view with the view of ld. AO. The act of ld. PCIT is illegal. v. Ld. PCIT, in order to impose her view and to ignore the decision of Hon ble Bombay High Court as relied upon by the assessee, flawed in stating that the matter has not attained finality because the tax effect was less than the prescribed limit for filing of appeal before Hon ble Supreme Court as per section 268A. It is submitted that ld. PCIT neither distinguish the decision of Hon ble Bombay High Court and the decisions of Hon ble Tribunal nor brought on record any contrary judicial view. vi. Without prejudice to above it is submitted that Hon ble Bombay High Court pronounced the matter in the year 1993. As on that day, section 268A was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents totaling to ₹ 36,70,320/- were made prior to one year before the date of sale of property i.e. 24-11-2013, the investment of ₹ 36,70,320/- in the new flat does not qualify for the deduction u/s 54 of the I.T. Act, 1961. However, the assessing officer allowed the deduction u/s 54 for the sum of ₹ 36,70,320/- as claimed by accepting the returned income. The assessee's wrong claim of deduction u/s 54 was allowed by the Assessing Officer without verifying the necessary details and without examining the fulfillment of the eligibility of the deduction by the assessee. 4. As a result of the aforesaid issue having been accepted without any verification/enquiry and inadmissible claim of deduction u/s 54 allowed by the Assessing Officer, the assessment order has been rendered erroneous and prejudicial to Revenue, hence proceedings u/s 263 of the Act were initiated. 9. This aspect relating to the payments made prior to one year before the date of transfer of the original asset for computing the deduction u/s 54 in order to arrive at the capital gains was required to be examined by the AO. The records indicate that all the crucial aspects relating to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment order as erroneous in so far as prejudicial to the interest of the Revenue. The contention of the ld Pr CIT is that the payments towards the purchase of the new flat totaling to ₹ 36,70,320/- were made prior to one year before the date of sale of property i.e. 24-11-2013, the investment of ₹ 36,70,320/- in the new flat therefore does not qualify for the deduction u/s 54 of the I.T. Act, 1961 rendering the assessment order as erroneous in so far as prejudicial to the interest of the Revenue. In this regard, we refer to the provisions of section 54 which reads as under: 54 [1] Subject to the provisions of sub-section (2), where, in the case of an assessee being an individual or a Hindu undivided family], the capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the had Income from house property (hereafter in this section referred to as the original asset), and the assessee has within a period of one year before or two years after the date on which the transfer took place purchased or has within a period of three years after t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s would not debar the assessee from claim of deduction under section 54 of the Act. Our decision is fortified by the decision of the Hon ble Bombay High Court in case of Beena K Jain (supra) wherein the Hon ble High Court has held as under: 2. Under section 54F in the case of an assessee if any capital gain arises from the transfer of any long-term capital asset, not being a residential house and the assessee has, within a period of one year before or two year after the date of which the transfer took place purchased a residential house, the capital gain shall be dealt with as provided in that section. As per the section certain exemption has to be allowed in respect of the capital gains to be calculated as set out therein. The department contends that the assessee did not purchase the residential house either one year prior to or two years after the sale of the capital asset which resulted in long-term gains. According to the department, the agreement for purchase of the new flat was entered into more than one year prior to the sale. Hence, the petitioner is not entitled to the benefit under section 54F. In our view the Tribunal has rightly negatived this contention and has h ..... 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