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2020 (10) TMI 712 - AT - Income TaxRevision u/s 263 - CIT set aside the orders of AO allowing deduction to the assesses u/s. 54F of the Act and also on the issue of quantum of capital gain for de novo assessments by the AO - HELD THAT:- From a perusal of the orders of assessment in the case of both the Assessee’s, it appears to us that before concluding the assessment proceedings the AO did not make any enquiries with regard to the deduction u/s.54F. In the note attachment to the order of assessment, there is a reference to the claim of the Assessee having been examined u/s.54 and the factum of having verified all sale deeds and purchase deeds. Since the office note is not clear about what enquiries the AO made before concluding the assessment, we have to conclude that the findings of the Pr.CIT that the AO has not made adequate and proper enquiries before concluding the Assessment, is correct. Assessee could not substantiate before us as to how the AO made enquiries on this issue before concluding the assessment, except by pointing out that all facts were laid before the AO and it can be presumed that he had taken note of this aspect while concluding the assessment. AO himself initiated proceedings u/s.154 to rectify error apparent on record on the aspect of computation of LTCG goes to show that he had while completing the Assessment not made proper enquiries. The law is well settled that if there is a failure on the part of AO to make an enquiry on the issue which calls for an enquiry, that by itself will render the order of assessment erroneous and prejudicial to the interests of the revenue. Since there was a failure on the part of AO to make necessary enquiry, we are of the view that the Pr.CIT was justified in invoking jurisdiction u/s. 263 of the Act in the facts and circumstances of the present case. Claim of the Assessee for deduction while computing LTCG has to be examined de novo without being influenced by any of the discussion in the impugned order of the Pr. CIT as the jurisdiction u/s.263 of the Act has been exercised by the Pr.CIT on the ground of the failure on the part of the AO to make proper enquiries before completing the assessment. The Assessee should also be allowed to substantiate his claim for deduction u/s.54 of the Act, because the liability to tax depends on the provisions of law and facts of a case and not on the basis of any admission or incorrect claim made by an Assessee. We therefore modify the order of the Pr. CIT in the terms indicated above, i.e., the AO while completing the assessment pursuant to impugned orders should complete the assessment de novo and all issues referred to above, will be open for consideration before the AO. Appeals by the assesses are partly allowed.
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