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2017 (11) TMI 1126 - AT - Income TaxRevision u/s 263 - Validity of taking up of matters by the successor CIT - as per CIT-A deduction claimed under section 54F was not as per law and directed the Assessing Officer to recompute the income by denying the said deduction - Held that:- Clearly and undisputedly this issue was examined by the Commissioner of Income-tax in proceeding initiated under section 263 of the Act vide his notice dated December 14, 2007 and due reply filed by the assessee, after considering which and after being satisfied by which the proceedings were dropped. The present proceeding having been initiated on the identical issue are clearly unsustainable in law since it simply tantamounts to review of the order of the Commissioner of Income-tax and not of the Assessing Officer. The co-ordinate Bench of the Income-tax Appellate Tribunal in the case of Satya Prakash Gupta (2014 (3) TMI 932 - ITAT DELHI) has in identical circumstances held that the successor Commissioner of Income-tax becomes functus officio in this regard after the exercise conducted by the predecessor Commissioner of Income-tax. Therefore, we have no hesitation in holding that the order passed under section 263 is not sustainable on this ground alone. The explanation given by the assessee in this regard vide its reply submitted to the Commissioner of Income-tax in the earlier proceeding and even in the present proceeding, we find is plausible and reasonable. A bare reading of sections 54 and 54F of the Act nowhere states that the surplus remaining after claiming deduction under section 54/54F on account of construction of house property undertaken in a year, would not be allowed set off against long-term capital gain earned in the succeeding year. There is no such specific bar provided in the section. The learned Departmental representative also agreed to this. Therefore, as long as the conditions specified under section 54F are fulfilled, the interpretation and understanding of section as taken by the assessee and also by the earlier Commissioner of Income-tax cannot be said to be perverse and grossly against law. Therefore, the argument of the learned Departmental representative that an error would be allowed to be perpetuated by setting aside the present order of the learned Commissioner of Income-tax on technical grounds, we find has no merit. - Decided in favour of assessee.
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