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2021 (8) TMI 631 - ITAT KOLKATARevision u/s 263 - deduction u/s 35AC - HELD THAT:- PCIT has failed to mention as to how the assessment order was erroneous and prejudicial to the interest of the Revenue. In respect of the queries raised by the Ld. PCIT, the assessee gave explanations. The Ld. PCIT could not find any error or discrepancy in the explanation submitted by the assessee requiring any further investigation. There is no finding given by the PCIT that the explanation given by the assessee was not justified or there was any scope of further enquiries in this respect. As per the provisions of section 263 of the Act, the Ld. PCIT was supposed to apply his mind to the explanation submitted by the assessee and come to a conclusion that the order passed by the AO was erroneous and prejudicial to the interest of the Revenue and further he was supposed to make or to cause to make necessary enquiries to arrive at a conclusion that the assessment order in question was not sustainable. The exercise of revisional jurisdiction u/s 263 of the Act has been made by the ld. PCIT in a casual and mechanical manner which is not sustainable in the eyes of law. The impugned order passed u/s 263 of the Act is, therefore, quashed. AO not added the notional rent income from the rest of three flats under ‘income from house property - The assessee had let out the property in F.Y. 2016-17 and the rental income had accrued from June 2016. It had further been submitted that the assessee had paid advance against property at LT Tower and the assessee had received possession of the property in May 2018. The assessee was joint owner of the property at L&T Parel Project with another daughter Ms. Aditi Chamaria. The assessee was 50% owner of the property at Merlin, Kolkata with his wife Ms. Sarita Bajaj. The wife of the assessee had let out the property during the year under review and was in receipt of the rental income. The entire total income of the property was received by the wife of the assessee and she was subject to highest rate of taxation. She had paid substantial part of the purchase consideration and as per understanding between the co-owners the rent was received by her. Though, the assessee duly explained about the date of coming into possession of the some of the properties and that on becoming owner in possession of the properties in question, the rental income was duly offered for taxation. Further that in respect of one property, his wife had taken into account the rental income. However, the ld. PCIT in a mechanical manner set aside the assessment order observing that the aforesaid explanations were not available to the Assessing Officer - Decided in favour of assessee.
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