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2020 (12) TMI 548 - AT - Income TaxRevision u/s 263 - AO has passed the assessment order without proper verification/examination of the increase in capital and without making any addition in this regard - non-registration of gift instrument - HELD THAT:- By virtue of non-registration of the gift instrument, in the eyes of law, no transfer of flat takes place, then the assessee's capital account will get reduced by the cost of the flat which has been gifted and then will get reflected in the capital account of the donor Ms. Ankita Kejriwal, thereby increasing her capital account and not that of assessee/appellant. In such an event, there will be no prejudice caused to the Revenue, on account of AO not appreciating the legal effect of non-registration of gift instrument. We note from the enquiry conducted by the AO, assessee had furnished the source of the donor for purchasing the property and we note that other than ₹ 20,050/- the source of fund for purchasing the flat flows from the earlier assessment years. Thus, we note that even if the AO finds that the non-registration of the gift deed would result in non-transfer of the flat would not in any case prejudice the revenue. Therefore, the second limb of the jurisdictional requirement i.e. 'prejudicial to the revenue' does not exist and, therefore, the Ld. Pr. CIT lacks jurisdiction to interfere in the order of the assessment passed by the AO. Since the AO has enquired and elicited the relevant information/documents including the source of Ms. Ankita Kejriwal to buy the flat at Bangalore, the AO's action cannot be faulted as an outcome of lack of enquiry. And since there would be no prejudice caused to the revenue, as discussed, we are of the view that in this case, the twin condition is not satisfied as held in Malabar Industries Ltd.[2000 (2) TMI 10 - SUPREME COURT ] therefore, the revisionary jurisdiction exercised by the Ld. PCIT u/s. 263 of the Ac was without jurisdiction - Decided in favour of assessee.
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