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2022 (6) TMI 594 - AT - Income TaxRevision u/s 263 by CIT - substantial increase in the capital account - as per CIT collector rate of the land in the year of conversion i.e; F.Y. 200607 was Rs. 9,50,000/- per acre and accordingly the fair market value of the land now sold as stock in trade should have been worked out for the F.Y. 2006-07 which would be much less than what had been claimed by the assessee in the computation of income, the difference has to be taxed as business income but the AO made no inquiry on this aspect - CIT also mentioned that the investment made in residential property under section 54F was less than net consideration in respect of capital asset transferred, therefore, the proportionate deduction in terms of provision of section 54F of the Act was to be allowed but the capital gain under section 54F of the Act had been wrongly calculated by the assessee as the capital gain already claimed exempt under section 54B on account of purchase of agriculture land had not been deducted - HELD THAT:- As increase in capital as well as deduction claimed under the head capital gain were the issues identified for limited scrutiny for examination. The AO again directed the assessee to furnish the information during the course of assessment proceedings vide letter dt. 09/02/2017, copy of which is placed at page no. 195 and 196 of the assessee’s compilation, in the said letter, at Sl.No. 8 the AO asked the information relating to large deduction claimed under section 54B, 54C, 54D, 54G and 54GA of the Act and at Sl. No. 11 the AO asked the details of substantial increase in capital in a year. The assessee furnished all the requisite details which we have already mentioned in the former part of this order, so it cannot be said that the AO did not make the inquiries relating to the increase in capital account or did not examine the issues. In the present case the Ld. Pr. CIT on the one hand mentioned that the assessee did not provide details of substantial increase in capital in a year, on the other hand, she mentioned that the reply was furnished by the assessee relating to addition in capital account which was reproduced in para 6 of the impugned order. In the present case, it cannot be said that the AO did not make inquiries / verification relating to increase in capital account of the assessee as alleged by the Ld. Pr. CIT. As regards to the certain entries which the Ld. Pr. CIT pointed as there was mismatch - when the case of the assessee was selected for scrutiny for a specific issue relating to increase in capital account and the AO asked the information and details for the said issue, the assessee furnished the relevant details which were examined by the AO who did not find any adversity or default in those details, so it cannot be said that the order passed by the AO was erroneous or prejudicial to the interest of the Revenue on the issue relating to the increase in capital account of the assessee. Deductions claimed under section 54B and 54F - Since the facts for the year under consideration are identical to the facts involved for the A.Y. 2013-14 2021 (7) TMI 568 - ITAT CHANDIGARH] wherein in similar circumstances the order of the Ld. Pr. CIT under section 263 of the Act was quashed. We, therefore, are of the view that the Ld. Pr. CIT was not justified in holding that the assessment order passed by the AO for the year under consideration was erroneous and prejudicial to the interest of the Revenue on the issue relating to the deduction under section 54B and 54F of the Act. In that view of the matter and by considering the totality of the facts as discussed hereinabove, we are of the view that the Ld. Pr. CIT was not justified in holding that the assessment order dt. 29/12/2017 passed by the AO was erroneous in so far as it was prejudicial to the interest of the Revenue, accordingly the impugned order of the Ld. Pr. CIT is quashed.
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