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2019 (5) TMI 735 - AT - Income TaxRevision u/s 263 by CIT - excess claim of deduction u/s 54B - non application of mind by AO - HELD THAT:- AO has not given any reason as to how purchase of land prior to transfer of capital asset is eligible for claim of deduction under s.54B(1) of the Act. Thus, as a corollary, the AO has accepted the claim of deduction by oversight and without any application of mind in this regard. No evidence has been adduced before us to show that the issue was present to the mind of the AO. A wrong acceptance of claim of deduction would not given inference towards application of mind. Secondly, the eligibility of deduction under s.54B in respect of land acquired prior to transfer of capital asset is clearly opposed to the plain provision of the Act and thus apparently not sustainable having regard to express the provision of the statute. The legislature in its own wisdom has used the expression before the transfer of long term asset as well as after the transfer of capital asset at appropriate places viz. Section 54. The intention of the legislature is thus quite clear. Therefore, claim of deduction accepted by the AO despite unequivocal language of the Act, in our view, is erroneous as contemplated u/s 263. Such error on the part of the AO has caused definite prejudice to the interest of the Revenue. The action of the Pr.CIT is thus within the realm of powers vested under s.263. The Pr.CIT has distinguished the case laws cited which is found to be in order. We do not see irregularity in the assumption of jurisdiction by the Pr.CIT under s.263 of the Act - Decided against assessee.
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