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2022 (10) TMI 344 - AT - Income TaxRevision u/s 263 by CIT - gain on sale of property - whether the unsold property which is held as stock in trade by the assessee can be assessed under the head ‘income from house property’ by notionally computing the annual letting value from such property? - HELD THAT:- As perused the facts of the case including the findings of the ld. PCIT and other material brought on record. We find merit in the submission of ld Counsel for the assessee and observed that issue under consideration is no longer res-integra. That is, the issue raised by the PCIT is squarely covered in favour of assessee by the judgment of Co-ordinate Bench in the case of Jayprakash Khanchand Aswani, [2018 (12) TMI 1963 - ITAT SURAT] wherein the Tribunal has considered the judgment of Hon'ble Gujarat High Court in the case of CIT vs. Neha Builders Pvt. Ltd. [2006 (8) TMI 105 - GUJARAT HIGH COURT] and rendered the decision in favour of assessee. The phrase prejudicial to the interest of revenue has to be read in conjunction with an erroneous order passed by the A.O. Every loss of revenue as a consequence of an order of AO, cannot be treated as prejudicial to the interest of revenue, for example, when an ITO, adopted one of the course permissible in law and it has resulted in loss of revenue, or where two views are possible and the ITO has taken one view with which the PCIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of revenue. Unless the view taken by ITO is unsustainable in law. We note that flats not sold by assessee were its stock-in-trade and income arising on its sale is liable to be taxed as business income, therefore, issue raised by ld PCIT in his revision order under section 263 of the Act, is not tenable in law. In any event, we note that the Assessing Officer has adopted one of the courses permissible in law and even if it has resulted in loss to the revenue, the said decision of the Assessing Officer cannot be treated as erroneous and prejudicial to the interest of the revenue as held by Hon’ble Supreme Court in Malabar Industries Ltd. [2000 (2) TMI 10 - SUPREME COURT] Since the order of the Assessing Officer cannot be held to be erroneous as well as prejudicial to the interest of the revenue, in the facts and circumstances narrated above, the usurpation of jurisdiction exercising revisional jurisdiction by the Principal CIT is “null” in the eyes of law and, therefore, we are inclined to quash the very assumption of jurisdiction to invoke revisional jurisdiction u/s 263 by the Principal CIT. Therefore, we quash the order of the Principal CIT dated 29.03.2022, being ab initio void. Appeal of assessee allowed.
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