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2013 (6) TMI 152 - ITAT CHENNAIJurisdiction power u/s 263 by CIT(A) - Exemption u/s 11 - application of income - transfer of four immovable properties - revocable transfer - accumulation of income - Held that:- For a transfer to become a "revocable transfer", there has to be a provision whereby the transferee agrees to, directly or indirectly, transfer any part of the income or assets to the transferor. Alternatively, the transfer should be such that the transferor has a right to resume power over the transferred assets. Thus both these conditions were not satisfied. When M/s. India Financial Association transferred the properties to the ultimate purchaser, there was no provision for any re-transfer. There was no agreement between the assessee and the India Financial Association, for any re-transfer of properties or any income to the assessee. Just because the India Financial Association had sold the properties and given the money to the assessee, that would not be sufficient to hold that there was an agreement in the nature of a revocable transfer between them. None of the relevant conveyance would show that the assessee had any right to re-assume power over the transferred properties. There was neither any transfer effected by the assessee during the relevant previous year, much less any transfer which was revocable. So, not only had the AO taken a lawful view after considering the issues relating to holding of the property, but the view with which the DIT (Exemptions) was trying to substitute was a patently unlawful one. Both the assessee as well as M/s. India Financial Association were entitled to claim exemption under section 11 and hence there could never have been any prejudice caused to the Revenue, this way or that way. There was nothing in the assessment order which could be considered as erroneous and/or prejudicial to the interests of the Revenue. The order of the Director of Income-tax (Exemptions) passed under section 263 stands quashed In favour of assessee.
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