TMI Blog2023 (7) TMI 610X X X X Extracts X X X X X X X X Extracts X X X X ..... ain returned u/s 50 was in accordance with law, which is completely agreable. This fiction created in the said section cannot be extended to deny benefit to which assets qualifying as long term are otherwise entitled on account of their said status. See V.S. Dempo Company Ltd. [ 2016 (10) TMI 62 - SUPREME COURT ] Surely therefore there is complete absence of finding of any error by the Ld. PCIT in the order of the AO with respect to the issue involved.AO had allowed the claim taking a plausible view on the issue and in such circumstances there is no scope for invocation of revisionary powers u/s 263 - The Hon ble apex court has laid down that where AO takes a plausible view there cannot be said to be any error in his order so as to invoke revisionary powers u/s 263 of the Act in the case of Kwality Steels [ 2017 (7) TMI 620 - SUPREME COURT ] Decided in favour of assessee. - ITA No. 215/Ahd/2022 - - - Dated:- 12-7-2023 - Mrs. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member For the Assessee : Shri S.N. Soparkar, Sr. Advocate And Shri Parin Shah, AR For the Revenue : Shri Sudhendu Das, CIT-DR ORDER PER ANNAPURNA GUPTA, ACCOUN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional High Court in case of CIT v. Polestar Industries 221 Taxman 423 which is also affirmed by Supreme Court in case of CIT v VS Dempo Company Ltd 242 Taxman 434. 3. As transpires from the order of the ld. PCIT, the revisionary power under Section 263 of the Act was exercised by him on noting the error in the order passed by the Assessing Officer that a palpable incorrect claim of set off of brought forward Long Germ Capital Loss against Short Term Capital Gain earned by the assessee during the year was not duly examined and verified during the assessment proceedings. 4. The Short Term Capital Gain related to that earned on sale of depreciable asset i.e. building (residential flat) forming part of the block of assets Building-Residential in the fixed assets and net capital gain was returned by the assessee under Section 50 of the Act amounting to Rs. 2,96,48,487/- .The brought forward Long Term Capital Loss set off against the same is Rs. 93,63,291/-. These facts emanate from paragraph no. 2 of the ld. PCIT s order as under:- 2. Subsequently, on verification of the case records, it was noticed that the assessee has sold depreciable asset i.e. building (residential f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal No. 747 of 2013 and in the case of Aditya Medisales Ltd. in tax Appeal No. 730 of 2013. The assessee had explained that courts had held that section 50 creates a deeming fiction, treating depreciable assets as short term capital gains, and this deeming fiction is only for mode of computation of capital gain. That such depreciable assets, which otherwise qualify as long term assets cannot be denied other benefits due to long term capital assets. That accordingly the short term capital gain returned by the assessee, relating to depreciable assets was in the nature of long term capital gain and thus entitled to set off of brought forward long term capital losses against the same. That, therefore, the Assessing Officer had taken a plausible view in accepting the claim of the assessee. This contention was also made by the assessee before the ld. PCIT while stating that there was no error in the order of the Assessing Officer accepting assessee s claim of set off of brought forward Long Term Capital Loss against Short Term Capital Gain earned by the assessee since it was in consonance with the decisions of the Hon ble jurisdictional High Court on this issue. The ld. PCIT, we find, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of the cases decided by the jurisdictional Hon'ble Gujarat High Court while passing the fresh assessment order. Needless, to mention that while passing the fresh assessment order, consequent to this order being passed under Section 263 of the I.T. Act, the Ld. AO shall grant reasonable and sufficient opportunity of being heard to the assessee. 6.2 It is clearly evident that the ld. PCIT has recorded no infirmity in the contentions made by the assessee before him that there was no error in the assessment order in allowing set off of brought forward Long Germ Capital Loss against Short Term Capital Gain returned u/s 50 of the Act since it was accordance with law. For that matter even the Ld. DR was unable to contradict the contention of the assessee that its claim was in accordance with law as interpreted by the Hon ble jurisdictional High Court. 6.3 Besides the Ld. Counsel for the assessee has placed before us copies of the decision of the hon ble Jurisdictional High Court in the case of Aditya Sales (supra) and Polestar Industries(supra) relied upon by the assessee in support of its contention that its claim of set off of brought forward long term capital los ..... X X X X Extracts X X X X X X X X Extracts X X X X
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