TMI Blog2015 (12) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... deal with a case where the purchase is prior to the date of transfer. Even from this angle we cannot say that the AO’s decision to allow the claim u/s.54F of the Act was based on a view which was unlawful or illegal or not possible. In our opinion effort of the CIT was to substitute his view in place of a possible and lawful view taken by the AO, that too after enquiries. In other words, we are of the opinion that the order of AO did not have any error which was prejudicial to the interests of Revenue. Order of CIT u/s.263 of the Act is set aside. - Decided in favour of assessee. - I.T.A No. 976/Bang/2014 - - - Dated:- 27-11-2015 - Shri Abraham P. George, Accountant Member And Shri Vijaypal Rao, Judicial Member For the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the bank account. Further, as per the CIT assessee had not deposited the capital gains not used for acquiring the new asset in a bank account as specified u/s.54(2) of the Act. CIT also noted that assessee would not be eligible for the claim of exemption u/s.54F of the Act since the admission of capital gains was after detection by the Department and not voluntary. Assessee made a reply to the above notice stating that the SB account with Canara Bank, Malur was placed before the AO, who had considered it before completing the assessment. Further as per the assessee, sale of two of the sites for ₹ 15 lakhs was made on 06.06.2008 prior to the investment in residential properties made on 06.08.2008 and 13.08.2008. Assessee also pointed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the sale consideration in bank before appropriating it for purchase of the new asset. However, in the final order u/s.263 of the Act, there is no finding adverse to the assessee on this point. Secondly, according to the Ld. AR, AO had carefully considered assessee s explanation that deposits in the bank account were out of consideration received from sale of four sites and was satisfied. CIT, as per the Ld. AR, was only trying to make a roving enquiry in the guise of exercise of powers u/s.263 of the Act. Further as per the Ld. AR, the view taken by the CIT in the notice that exemption u/s.54F of the Act would not be available to the assessee since capital gains were returned after detection by the assessee, had no legal leg to stand. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of cash deposits appearing in your bank account. As no linkage is established, the cash deposits appearing in the bank accounts ought to have been taxed uls.68 of the Act as cash credits without reference to the sale of the capital asset. c) Further, it is only the sale consideration as mentioned in the conveyance deed that would be, at best, taken as value of sale and be reduced from the indexed cost of acquisition, if any and not the cash deposits appearing in the bank account. d) Even if indexed, you are not eligible for any exemption u/s.54F as the admission is on account of detection by the department and not a voluntary offer by you. Since the assessment order made in your case for the A. Y. 2009-10 is silent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal gains arising from such sales though not returned by the assessee in his return of income was admitted during the course of assessment proceedings, pursuant to AO seeking source of deposits in assessee s Canara Bank account. To take a presumption that an item which has been discovered by the AO during the course of assessment proceedings for which explanations were given by the assessee and which explanations were accepted, were so accepted, without enquiry, would be naive. It is not a case where assessee had returned an amount and the AO had omitted to consider its admissibility or otherwise. It is a case where AO had discovered deposits in the bank account which were explained by the assessee to be out of sale of four sites. It is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has sold two sites on 24.07.2008, whereas the first property against which exemption u/s.54F of the Act was purchased on 13.03.2008 and the second property was purchased on 06.08.2008. Obviously the first property was purchased prior to the sale of the sites on 24.07.2008. Disabling clauses (ii) and (iii) above only mentions purchase or construction within a period of one year / three years after the date of transfer. It does not deal with a case where the purchase is prior to the date of transfer. Even from this angle we cannot say that the AO s decision to allow the claim u/s.54F of the Act was based on a view which was unlawful or illegal or not possible. In our opinion effort of the CIT was to substitute his view in place of a possi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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