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2021 (9) TMI 506 - AT - Income TaxRevision u/s 263 - deduction u/s 54 - capital gains/ loss - specific finding that how the order passed by the AO is erroneous which resultant loss of the revenue - HELD THAT:- As the case was selected for limited scrutiny on the reason “Whether capital gains/ loss is genuine and has been correctly shown in the return of income." Not for “deduction claimed under the head capital gain” - as during the assessment proceedings the AO had also made substantial verification & examination on the other issue as the case may be taken up for comprehensive scrutiny, without following legal procedure and necessary approval of the competent authority, conducting an enquiry on the issue which is outside the limited scrutiny would be beyond the jurisdiction of the AO. Therefore, the reason on which the ld PCIT had issued the notice u/s 263 and acquired the jurisdiction is not only illegal but also against the circular issued by Hon’ble CBDT and law decided by Hon’ble Court. During the assessment proceedings as well as revision proceeding the assessee had submitted the documentary evidences and explanations in respect of genuineness of the claim of deduction u/s 54Fand the AO on meticulous appreciation of evidence on record has allowed the claim of deduction which is not only accordance with provision of law but also supported from documentary evidences and as such there is no error in the Assessment order. Also during the revision proceedings the assessee had explained with legal & valid documentary evidences that claim made by assessee on the basis of which the AO had allowed the same - As pointed out before ld PCIT that the facts narrated in show cause notice is apparently incorrect and false as the assessee had constructed the house on other residential plot not on the purchase in the year under consideration and in support of same the assessee had furnished evidences. AO had exercised the quasi-judicial power vested in him in accordance with law and arrived at conclusion on the basis of legal & valid documentary evidences and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion and also there was no revenue loss as the entire sales consideration had been disclosed and offered for taxation as per provisions of law by the respective parties. It is settled proposition of law that revisionary powers of CIT u/s 263 can be invoked only when the assessment order is erroneous as well as prejudicial to the interest of the Revenue. Since, in the case of assessee, the assessment order could not be established to be erroneous, by Pr CIT-. The sole ground of 263 jurisdiction by the Pr. CIT was that the AO did not make proper enquiry. This itself cannot be said to be erroneous and prejudicial to the interest of the Revenue since the AO was alive on all these questions and he has called upon the assessee to produce relevant material in regard to areas which were stated by the PCIT in his show cause notice. Order u/s 263 cannot be sustained as we find that the assessment order passed by the AO cannot be said to be erroneous or prejudicial to the interest of revenue, and accordingly the order made u/s 263 is quashed. - Decided in favour of assessee.
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