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2016 (10) TMI 244 - ITAT MUMBAI

2016 (10) TMI 244 - ITAT MUMBAI - TM - Revision u/s 263 - exemption u/s 54 - Held that:- We find that the assessee purchased flat vide agreement dated 20.4.2004 after making payment of ₹ 16 lakhs being purchase consideration by means of two cheque drawn on HSBC Bank M G Road, Mumbai the details whereof have already been mentioned above and also taken over the physical possession of the flat simultaneously. We further noted that the first agreement which was executed on the plain paper was .....

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263 issued show notice dated 13.3.2013 to the assessee on the ground that the sale of flat had resulted into to STCG as it was held for a period of less than 36 months by taking the date of purchase of the fat as 13.5.2004 which is second agreement which was executed on Non-Judicial Stamp Paper and observed that deduction 54 of the Act was wrongly allowed to the assessee and held that this has resulted into under assessment of ₹ 21 lakhs thereby passing an assessment order being erroneous .....

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lat which was claimed exempt u/s 54 of the Act and was allowed by the AO after considering various documents placed before him during the course of assessment proceedings. - In our opinion, no prejudice is called to the revenue and the order passed by the AO is neither erroneous nor prejudicial to the interest of the revneue as the AO has taken a correct view on the basis of documents furnished by the aseseee. Accordingly, we set aside the order of Commissioner passed u/s 263 of the Act by a .....

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o.4 to 5 is against the exercise of powers under section 263 of the Income Tax Act, 1961(hereinafter referred to as the Act) by the ld. Commissioner of Income Tax and seting aside the order of AO passed under section 143(3) of the Act dated 25.10.2010 with a limited direction of assessing the capital gain of ₹ 21 lakhs as Short Term Capital Gains (STCG) in stead of Long Term Capital Gains(LTCG) as assessed by the AO in the assessment framed under section 143(3) of the Act. 3. Facts of the .....

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s purchased on 20.04.2004 as evidenced by the agreement of even date coupled with payment of ₹ 16,00,000/- by means of two cheques and the possession was taken simultaneously. Later on the the agreement was executed on non judicial stamp paper on 30.05.2004 upon the insistence of the assessee as the first agreement was executed on a plain paper. The said flat was transferred on 20.04.2007. The CIT was of the views that flat so purchased was transferred within a period of three years from t .....

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of the assessee exercised the revisionary powers and passed order u/s 263 setting aside the assessment to a limited issue. For the sake of convenience and ready reference the same is reproduced below: OFFICE OF THE. COMMISSIONER OF INCOME-TAX, CITY-13' ROOM No.416, 4th FLOOR,AAYAKARBHAVAN, M.K. ROAD, MUMBAI - 400 020 Name and address of the assessee : Shri Sajid Qamruz Zaman, 2, Hasan Mansion, Dhobi St. Mumbai - 400003. Status : Individual PAN : AAAPZ1753H A.Y. : 2008-09 Date of order : 25. .....

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the assessee to be exempt as the sale proceeds have been invested for purchase of new residential flat. 3. On verification, it is found that the flat was transferred within three years of purchase and therefore the gain on sale on flat is short term capital gain and no deduction u/s 54 of the Act is available to you. This has resulted into underassessment of ₹ 21,00,000/-. 4. A notice u/s.263 dt. 13.03.2013 of the I.T. Act was issued on this issue fixing hearing on 19.03.2013. Mr. Rohit Ch .....

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the issue. The A.O. will give opportunity of being heard to the assessee and is also directed to complete proceedings as soon as possible without waiting for statutory time period. Sd/- (PRANAB KUMAR DAS ) ... Commissioner of income -tax-13, Mumbai. Copy to:- 1) The assessee. 2) The Addl.CIT - 13(1), Mumbai 3) The ITO-13(1 )(3), Mumbai. 4) The Master File. Sd/- ( PADMAJA VENKATRAMAN ) Income-tax Officer(HQ)-13, Mumbai. 4. The ld. AR during the course of hearing before us submitted that the asse .....

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so taken on 20.04.2004 but the sale agreement was executed on the plain paper and later on the same agreement was executed on the second time on 13.5.2004 on the Non-Judicial Stamp paper at the insistence of the assessee. It was submitted by the ld.AR that both the agreements were placed before the AO as well as the ld. CIT(A). The ld .AR submitted that these agreements were considered by the AO and thereafter framed the assessment accepting the LTCG of ₹ 21 lakhs and allowing exemption un .....

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i.e. 13.05.2004 by ignoring the facts that the payment was made on 20.4.2004 by means of two cheques dated 20.4.2004 and dated 26.4.2004 of ₹ 1,00,000/- and ₹ 15,00,000/- respectively when the first agreement was executed which was duly considered and examined by the AO. The ld. AR finally submitted since the issue has been considered by the AO and taken a possible view on the basis of the records before him and came to the conclusion that the assessee has earned LTCG on the sale of .....

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ooking. The ld AR finally submitted that the revisionary powers as exercised by the Commissioner u/s 263 for setting aside the order of AO was bad in law and therefore deserved to be quashed. On the other hand, the ld.DR strongly objected the argument of the ld.AR submitting before us that the date of purchase was 13.5.2004 and not 20.4.2004 as submitted by the ld.AR of the assessee. The ld. DR submitted that the AO completely overlooked the facts and framed the assessment which was erroneous an .....

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ication to resort to the provisions of section 263 of the Act. We find that the assessee purchased flat vide agreement dated 20.4.2004 after making payment of ₹ 16 lakhs being purchase consideration by means of two cheque drawn on HSBC Bank M G Road, Mumbai the details whereof have already been mentioned above and also taken over the physical possession of the flat simultaneously. We further noted that the first agreement which was executed on the plain paper was reduced on non judicial st .....

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ted 13.3.2013 to the assessee on the ground that the sale of flat had resulted into to STCG as it was held for a period of less than 36 months by taking the date of purchase of the fat as 13.5.2004 which is second agreement which was executed on Non-Judicial Stamp Paper and observed that deduction 54 of the Act was wrongly allowed to the assessee and held that this has resulted into under assessment of ₹ 21 lakhs thereby passing an assessment order being erroneous and prejudicial to the in .....

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