TMI Blog2019 (5) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... B in respect of land acquired prior to transfer of capital asset is clearly opposed to the plain provision of the Act and thus apparently not sustainable having regard to express the provision of the statute. The legislature in its own wisdom has used the expression before the transfer of long term asset as well as after the transfer of capital asset at appropriate places viz. Section 54. The intention of the legislature is thus quite clear. Therefore, claim of deduction accepted by the AO despite unequivocal language of the Act, in our view, is erroneous as contemplated u/s 263. Such error on the part of the AO has caused definite prejudice to the interest of the Revenue. The action of the Pr.CIT is thus within the realm of powers ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e grievance of the assessee, the relevant facts are taken note of as follows: 3.1 The assessee filed its return of income for AY 2012-13 declaring total income at ₹ 21,86,120/-. The assessee inter alia claimed deduction under s. 54B of the Act to the tune of ₹ 75,94,273/- against the sale of certain parcels of land. The return filed by the assessee was subjected to scrutiny assessment and assessment order was framed under s.143(3) of the Act dated 20.02.2015 wherein the AO inter alia revised the quantum of chargeable capital gains. The AO also disallowed an amount of ₹ 23,06,723/- as excess claim of deduction under s.54B of the Act. 3.2 The assessment so framed by the AO under s.143(3) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eply thereto contesting the show cause notice and also challenged the foundation of jurisdiction under s.263 of the Act sought to be assumed by the Pr.CIT. From the case record, it appears that the AO made an addition to the long term capital gains of ₹ 49,55,300/-. The AO also verified the claim of deduction under s.54B of the Act against the aforesaid capital gain. The AO scaled down the deduction under s.54B of the Act from ₹ 75,94,273/- to ₹ 52,87,673/- and consequently, disallowed the deduction under s.54B of the Act to the extent of ₹ 23,06,723/- in respect of investment in one of the parcels of the land made after the due date of filing of return. 3.4 The Pr.CIT noted that the assessee has purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11,33,580 4. 921, Prantij 65,00,000 3,55,000 65,170 69,20,170 33.33% 13/5/2013 23,06,723 TOTAL 75,94,273 3.5 From the above tabulated statement, the Pr.CIT observed that while the AO has rightly disallowed investment in land amounting to ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal. 4.1 The learned AR for the assessee reiterated various submissions made before the Pr.CIT as noted in its order and pointed out that the jurisdiction assumed by the Pr.CIT is not proper. The learned AR sought to contend that the assessment order passed by the AO is after due application of mind. The AO in fact has disallowed a portion of the claim of deduction made by the assessee under s.54B of the Act and therefore lack of due diligence cannot be alleged. It was contended that the AO has taken one of the two possible views and therefore, assessment order is neither erroneous nor prejudicial to the Revenue. 4.2 The learned AR thus urged for cancellation of the order passed under 263 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s entitled to upset the finality of assessment proceedings before the AO where the AO has allegedly committed error in passing assessment order without proper verification of deductions claimed. 5.3 It is the case of the Pr.CIT that as per Section 54B(1) of the Act the deduction is permissible only where capital gain is utilized for purchase of land after the transfer of a capital asset. The Pr.CIT accordingly took a view that the deduction/examination to the extent of ₹ 41,90,160/- attributable to the land acquired prior to transfer is allowed in excess of the parameters laid down. 5.4 We find that the controversy is plain and simple and is not capable of any debate having regard to express statutory l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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