×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
06-06-2019, Amit Agarwal, Section 263, 54, Tribunal Mumbai
1. By way of this appeal for Assessment Year [AY] 2013-14, the assessee has contested the validity of revisional jurisdiction u/s 263 exercised by Ld. Principal Commissioner of Income-Tax-28 [Pr.CIT], Mumbai vide order dated 26/03/2018. For the same, the following grounds have been raised before us: -
GROUND NO. I: ORDER U/S 263 OF THE ACT IS VOID AB INITIO AND BAD IN LAW:
1. On the facts and circumstances of the case and in law, the ld. Pr. CIT erred in invoking the provisions of section 263 of the Act and setting aside the order u/s 143(3) of the Act passed by the Asst. Commissioner of Income Tax -28(1), Mumbai ("the AO") and directing the AO to pass a fresh order after examination of the facts of the case.
2. Ld. Pr. CIT failed to appreciate that:
i. both the pre-requisites i.e. (a) the assessment order being erroneous and (b) the assessment order being prejudicial to the interest of the revenue, are not satisfied in the facts of the present case;
ii. the amendment in section 54 by Finance (No. 2) Act, 2014 limiting the exemption to one residential house was effective only from April 1, 2015 relevant to Assessment Year 15- 16;
iii. The AO has made adequate enquiries on issues in respect of which impugned order hasbeen passed and the plans as well as layouts were part of the
Agreements which were submitted to the AO;
iv. In any case, mere inadequate enquiry is not a sufficient ground for revision u/s. 263 of the Act; and
v. where the view of the AO is a possible view, revision u/s. 263 is bad in law.
3. The Appellant prays that it be held that the assessment order passed by the AO is neither erroneous nor prejudicial to the intere t of revenue and accordingly the action of the ld. Pr. CIT of invoking provisions of section 263 of the Act and directing the AO to verify and examine the facts of the case and to pass a fresh assessment order be held void and bad in law.
WITHOUT PREJUDICE TO GROUND NO. I:
GROUND NO. II: Directing the AO to verify as to whether the "new acquired flats are independent units" and re examining the claim of the Appellant under section 54 of the Act:
1. On the facts and circumstances of the case and in law, the ld. Pr. CIT erred in exercising jurisdiction u/s 263 of the Act and directing the AO to re-examine/freshly examine as to whether the new flats purchased were independent units and thereafter, pass order in accordance with law in respect of the Appellant's claim under section 54 of the Act.
2. The Ld. Pr. CIT failed to appreciate that section 54, prior to its amendment by Finance (No.2) Act, 2014 w.e.f. April 1, 2015, did not limit the number of units to be purchased out of the longterm capital gains arising from the sale a residential house for claim of the said exemption and therefore, whether the flats were independent units or not has no bearing on the claim under section 54 of the Act.
3. The Appellant prays that the direction to AO to examine claim under section 54 after verifying whether the newly acquired units were independent units be quashed.
WITHOUT PREJUDICE TO GROUND NO. I AND II:
GROUND NO. Ill: Claim under section 54 was valid as adjacent units were purchased to be used as single dwelling unit
1. On the facts and circumstances of the case and in law, the ld. Pr. CIT erred in exercising jurisdiction u/s 263 of the Act and directing the AO to examine the building plans to determine whether the units were independent units.
2. Ld. Pr. CIT failed to appreciate and ought to have held that the AO has duly examined the said issue during the course of assessment proceedings.
3. Ld. Pr. CIT erred in not appreciating that the layout and plans were part of the Agreements submitted to the AO and the units being adjacent units were intended to be used as a single dwelling unit.
4. Ld. Pr. CIT failed to appreciate that the AO after examining the Agreements and the layout and plan contained therein had rightly allowed the claim of the Appellant.
5. The Appellant prays that the direction to re-examine the claim under section 54 after verification
of the layout and building plans be quashed.”
2.1 Facts as emanating from the record are that the assessee being resident individual was assessed for impugned AY in scrutiny assessment u/s 143(3) on 02/02/2016 accepting the returned income of Rs.50.21 Lacs e-filed by the assessee on 28/09/2013.
2.2 Subsequently, this order was subjected to revisional jurisdiction u/s 263 by Ld. Pr.CIT vide show-cause notice dated 12/09/2017, the relevant extract of which is as under: -
2. The assessment in your case has been completed u/s. 143(3) of the I.T. Act, 1961 on 02.02 20 6, accepting the returned income at Rs.50,21,020/-.
3. On perusal of records, the following issues are noticed in the aforesaid order u/s. 143(3) of the Income Tax Act, 1961 dated 02.02.2016.
3.1 It is seen from the records that you have sold two flats Nos. 501 & 502 in Sun Palm View Bldg, Sanpada on 18/10/2012 & 16/10/2012 respectively for sale consideration of Rs.1,12,50,000/- each. Whereas you have sold Flat No.501 and purchased two flats 401 & 402 in Monarch Imperial, Kalamboli amounting to Rs.40 lacs each. Against the sale of Flat No.502 you have purchased two more flats 302 & 303, Monarch Imperial, Kalamboli amounting to Rs.28 lacs plus Rs.5 lacs (additional amenities) each. It is observed that you have claimed exemption u/s. 54 of the I.T. Act on purchase of 4 flats against the sale of 2 flats which is not permissible as per section 54 of the I.T. Act, 1961.
4. In view of the above, it is evident that the Assessing Officer has not examined the aforesaid issues at all and allowed the claims made by you without inquiring, verification, resulting in excess claims being allowed. Therefore, it is considered that the order dated 02.02.2016 u/s. 143(3) of the Income-tax Act, 1961 is