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2021 (9) TMI 800 - AT - Income TaxRevision u/s 263 by CIT - case of the assessee was selected for limited scrutiny through CASS - Characterization of assessee income - capital receipt OR Business income - activity of purchasing land by the assessee and then converting it into flats and selling after construction to other co-owners - HELD THAT:- PCIT while deciding this issue has completely ignored and overlooked the specific assertions made by the assessee by filing its written submissions dated 11/02/2021 wherein it was specifically pleaded as to why the ld. PCIT has misconstrued the facts of the present case. Apart from this, the ld. PCIT has ignored the very important fact that the same activity on the same land was carried out by the assesse in the previous year i.e. A.Y. 2015-16 as well wherein also the then A.O. had treated the activity of the assessee as business activity and the income of the assesse was considered as business income instead of capital gains. The said order passed by the A.O. was challenged before the ld. CIT(A) and thereafter before the ITAT. The Coordinate Bench of the ITAT after considering the entire facts and circumstances of the case of the assessee had finally decided and concluded that the activities of the assessee is to be taxed under the head capital gains by treating the assets/income as capital asset/income instead of business asset/income and all the expenses borne by the assessee were also construed as part of cost of improvement. Thus the order of the A.O. for the year under consideration treating the asset as capital asset and allowing the claim of exemption U/s 54F of the Act etc. cannot be termed as improper or made without verification or prejudicial to the interest of Revenue. Moreover, after perusal of the record, we found that the A.O. had carried out all the required verifications and had taken the same view as has been taken by the Coordinate bench of the ITAT in assessee’s own case[2020 (5) TMI 236 - ITAT JODHPUR]. We draw strength from the decision of Union of India Vs Kamalakshmi Finance Corpn. Ltd[1991 (9) TMI 72 - SUPREME COURT] wherein it was held that the order passed by the Income Tax Appellate Tribunal are having binding effect upon all the subordinate authorities under the jurisdiction of the said Tribunal, therefore, in order to judicial discipline, the ld. PCIT was not empowered to invoke the provisions of Section 263 of the Act more particularly when he was made aware of the fact that identical issue had already been decided and attained finality by the decision of the Coordinate Bench of the ITAT in assessee’s own case for the A.Y. 2015-16 under the identical facts and circumstances. Therefore, order passed by the A.O. cannot be termed as erroneous and prejudicial to the interest of the Revenue, hence, we quash the order passed U/s 263 of the Act. - Decided against revenue.
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