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2022 (11) TMI 1287 - AT - Income TaxRevision u/s 263 - As per CIT not declaring of deemed rent in the return of income and A.O. erroneously passed the order without considering the same - HELD THAT:- Section 23(5) of the Act is not applicable for the assessee for this assessment year. The assessee explained and replied to the revenue about the issues in response to the notices of the Ld. PCIT. The formation of the opinion and belief of the Ld. PCIT was changing time to time after receiving reply of the assessee. We may also like to add here that section 23(5) of the Act has been inserted by the Finance Act, 2017 w.e.f. 01.04.2018 whereby notional annual value of the property held as stock in trade is sought to be brought to tax. The said amendment is only prospective in application. PCIT in his third show cause notice had sought to consider the taxability of deemed rental income not u/s 23(5) but u/s 23(1)(a) - Assessee had duly submitted that rental income has been correctly offered in return of income - PCIT has not brought with cogent evidence on record as to how the submission made by the assessee is incorrect. All facts & submission with regard to offer of rental income is already on record before the Ld. PCIT. Nothing prevented the Ld. PCIT to just verify those facts which are staring on him, before invoking his revisionary jurisdiction u/s 263 A.O. is neither erroneous nor prejudicial to the interest of the Revenue and hence, Ld. PCIT action u/s 263 of the Act is beyond jurisdiction and the same order is quashed. Appeal of assessee allowed.
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