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2022 (6) TMI 152 - AT - Income TaxRevision u/s 263 - indexed cost of construction disallowed - long term capital gain under section 50C - ascertaining the eligibility u/s. 54F - HELD THAT:- The assessment order is completely silent on the aspect of exemption u/s.54F, which is integral to the computation and assessment of capital gain. There has been neither any enquiry by the AO on the different aspects of sec. 54F, nor, resultantly, any finding qua the same by him. Shri Gupta, the assessee, also could not during hearing show us any enquiry having been made in its respect in assessment, though would plead as to the correctness of the claim u/s. 54F as per the return of income. That being a matter subsequent, i.e., to be determined after due inquiry and verification, is however not relevant. There is also, as the competent authority states, income from these two properties arising to the assessee, indicating it to be her properties and in her control and possession. The addition u/s. 50C (in assessment) is a matter distinct and apart from the application of s. 54F, and in any case was the subject matter of appellate proceedings. It is the enquiry during assessment and not that in the appellate proceedings, much less de hors the record, that is relevant. The Hon’ble Delhi High Court in Gee Vee Enterprises [1974 (10) TMI 29 - DELHI HIGH COURT] held, inter alia, that the income tax officer is not only an adjudicator but also an investigator. He cannot remain passive in the face of a return which is apparently in order but calls for further inquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an inquiry. It is because it is incumbent on the Income -tax- Officer to further investigate the facts stated in the return when circumstances would make such an inquiry prudent that the word “erroneous” in section 263 includes the failure to make such an enquiry. The order becomes erroneous because such an inquiry has not been made and not because there is anything wrong with the order if all the facts stated therein are assumed to be correct. In view of the foregoing discussion, we find no infirmity in the order passed by the ld. Pr. CIT u/s. 263 of the Act. - Decided against assessee.
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