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2016 (2) TMI 90 - ITAT MUMBAI

2016 (2) TMI 90 - ITAT MUMBAI - TMI - Revision u/s 263 - exemption u/s 54F alowed to assessee - Held that:- Before the Ld. CIT as well as before us the assessee had duly demonstrated that the assessee had claimed exemption against property purchased at Dosti and another property at Hiranandani Maitry Park was under construction for which only advance was given and assessee had not acquired any possession of the said property. Otherwise also, the said property was jointly held by his mother who w .....

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CIT cannot be appreciated, firstly, he should give specific finding as to why such a contention raised by the assessee is not correct or divorced from the facts and material records and secondly, how on the facts the order of the AO is actually erroneous and also prejudicial to the interest of the revenue. Simply mentioning the phrase in the order that the “assessment order is erroneous and so far as it is prejudicial to the interest of the revenue” is not sufficient - Decided in favour of asse .....

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sment year 2010-11, on the ground that it is erroneous and prejudicial to the interest of the revenue. 2. The brief facts are that, assessee is an individual who has shown income from salary, capital gain and income from other sources. The return of income was filed on 19.07.2010 and such a return of income was subjected to scrutiny proceedings and assessment order u/s 143(3) was passed on 18.03.2013, accepting the return of income of ₹ 19,17,408/-. Later on, the Ld. CIT on the perusal of .....

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ng-term-capital-gain was at ₹ 47,27,401/- which was claimed as exempt on account of investment made in purchase of a residential property. The facts qua the issue are that the assessee had executed an agreement for purchase of a residential property from Dosti Group on 06.05.2009 for a consideration of ₹ 1,09,25,395/- which was registered on 18.05.2009. Similarly, the assessee had made another agreement which was executed on 31.03.2010 for purchase of flat at Hiranandani Maitry Park .....

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e purchase of flat at Maitry Park, then the fact remains that on the date of sale of shares, i.e. May 2009, the assessee had more than one residential flats i.e. Flat at Dosti and another flat at Airoli which was sold in October, 2009. Thus, due to ownership of two flats on the date of sale of shares, the long-term-capital-gain from sale of shares is not eligible for exemption u/s 54F against house property at Maitry Park and to that extent, exemption u/s 54F against LTCG from sale of shares of .....

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ement; and working of LTCG. Thus, it was submitted that, all these details were before the AO and that to be in response to the various queries raised during the course of the assessment proceedings from time to time. Apart from that, the assessee had also annexed all the documents whereby, the assessee had submitted the details along with the reply relating to the capital gains which has been tabulated by the assessee in the following manner:- 4. Thus, it was submitted that, there has been prop .....

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essee had only made advance payment which was in the joint name of assessee and his mother, Mrs. Toral B. Mathrawala. Thus, there was no violation of any condition laid down u/s 54F. AO only after verifying these facts had allowed the exemption u/ 54F on the LTCG. After clarifying the facts, the assessee referred to various decisions and submitted that, the assessment order is neither erroneous nor prejudicial to the interest of the revenue. Assessee s detailed reply in this regard has been plac .....

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to various notices and queries raised by the AO during the course of the assessment proceedings with regard to the details of LTCG earned and the purchase of the properties / flats while examining the claim of exemption u/s 54/54F. He submitted that once, the AO has specifically called for the details and assessee has in response filed all the documentary evidences, then it cannot be said that impugned assessment order has been passed without application of mind or enquiry. On this ground alone .....

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54F. Thus, the assessee had rightly claimed the exemption u/s 54F and accordingly, order passed by the AO allowing such exemption cannot be held to be prejudicial to the interest of the revenue. In support of his contentions, he has filed catena of case laws and compilation of separate paper book. 7. On the other hand, Ld. DR submitted that, application of mind by the AO has to be shown either in the assessment order or from the records. There is no specific application of mind on section 54F. .....

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emption u/s 54/54F need to be properly examined by the AO as he has not carried out any proper enquiry or investigation of such a claim and has not verified the facts and the source of funds for making the investments in new assets. It is a trite law that the perquisite condition to exercise the revisionary jurisdiction u/s 263, by the Commissioner are that, firstly the order passed by the AO is erroneous and secondly, it should be prejudicial to the interest of the revenue. Both the conditions .....

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. Secondly, he asked for details of purchases and sale of investments made in the moveable as well as in immovable properties. In response to the said notice, the assessee had filed the requisite details of LTCG and also the details where such gains were invested. Then again, vide notice dated 15.10.2011, the AO further required the assessee to submit the details of LTCG along with documentary evidence and also submit proof of exemption claimed u/s 54. Again in response to such enquiry, the asse .....

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her co-owner; to submit purchase agreement of flat at Dosti along with source of investment and bank statement; and lastly, working of sale price along with documentary evidence of sale of shares. Thus, for the third time, the AO has required the assessee to submit all the details of LTCG as well as the purchase of immovable property and exemption claimed by the assessee. In response to this notice, the assessee vide letter dated 17th January, 2013 had again furnished all the said details. After .....

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been responded to by the assessee by furnishing the details and documentary evidence, then presumption is that, AO has duly applied his mind on the issue involved and even if such an issue does not find mention in the assessment order, then also it cannot lead to a conclusion that order has been passed by the AO without application of mind. On these facts, it cannot be held that the order passed by the AO accepting the assessee s claim is erroneous at all. 9. Now whether it is prejudicial to th .....

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