9911796707
TMI Blog2013 (12) TMI 1006X X X X Extracts X X X X X X X X Extracts X X X X ..... n, the assessee indicated that he earned net long term capital gain of Rs.1,01,73,965 which was claimed as exempt u/ss 54 and 54EC of the Act, on account of investment in new flat at Rs.59,17,500 and Rs.50,00,000 respectively. The capital gain arose on account of transfer of assessee's 50% share in property by virtue of Redevelopment agreement dated 26.02.2004. The Assessing Officer, after due investigation of the issue and obtaining clarification from the assessee, worked out income under the head "Capital gain" at Rs.76,64,008 and included the same in the total income. The learned CIT vide his first notice dated 30.07.2009, copy placed on page 99 of the paper book noticed that the assessee received a sum of Rs.2.18 crore on account redeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment order and remitted the matter to the file of A.O. for deciding the question of benefit u/s 54 afresh after allowing a reasonable opportunity of being heard to the assessee. 3. We have heard the rival submissions and perused the relevant material on record. There is no dispute on the fact that the property transferred by the assessee, which resulted in the impugned capital gain, was co-owned by the assessee and his wife with 50% share each. The assessee's wife also received equal consideration and equal share in the five floors of the building allotted by the builder, being first to forth and ninth. She also filed return in the same manner as the assessee did by claiming exemption u/ss 54 and 54EC. The Assessing Officer in her case a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; "Apart from the above, the question as to whether the built up are given by the developer to the owners constitute "a residential house" or not is the debatable issue. In the given facts and circumstances of the case, we are of the view that the stand of the assessee that the Assessing Officer is deemed to have examined and accepted the claim of the assessee for deduction u/s 54 is also a possible view. The law is well settled in respect of a debatable issue on which two views are possible, it cannot be said that there is a mistake apparent on a face of the record within the meaning of section 254(2) of the Act. In the given facts and circumstances of the case, we are of the view that the present Miscellaneous Application is misconceived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed income was a debatable one. When an issue was debatable, the provisions of section 263 could not be invoked.' From the above discussion it is axiomatic that no revision can be done on a debatable issue. An issue becomes debatable if two legally sustainable views exist on a particular point. When the A.O. accepts and adopts one possible view, the power of the CIT is ousted to revise the assessment order on his finding the other legally sustainable view as more logical in preference to the one adopted by the AO. 3.3 Adverting to the facts of the instant case, we find that the Tribunal in the case of assessee's wife has granted exemption u/s 54 in respect of all the floors co-owned by the wife along with the assessee under identical circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide the ambit of 'debatable issue'. Once the Assessing Officer adopts a possible view, in our considered opinion, it is not open to the learned CIT to set aside such possible view in the proceedings u/s 263 to impose the other possible view. Considering the judgment of the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. (supra) and several other judgments on the same line, we hold that the learned CIT was not justified in denying exemption u/s 54. We, therefore, set aside the impugned order by holding that the denial of exemption u/s 54 does not fall within the pale of section 263, as it is in any case a debatable issue.
4. In the result, the appeal is allowed.
Order pronounced on this 26.3.2013. X X X X Extracts X X X X X X X X Extracts X X X X
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