TMI Blog2016 (10) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... eld 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 interest of revenue and set aside the order of AO for limited purposes to pass appropriate order after examining all the facts of the case. In this case, we find that the by considering the date of purchase of the first agreement on which the flat was sold and the possession was taken ,the AO has taken the possible view that the flat was purchased on 20.4.2004 as is apparent from the facts as discussed above. The assessee has made LTCG of ₹ 21 lakhs on the sale of flat 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emption u/s 54 of the Act was wrongly claimed. Accordinly a show cause notice u/s 263 of the Act dated 13.3.2010 of the Act was issued which was replied by the ld.AR of the assessee vide letter dated 22.3.2013 along with various documents which were filed. However the CIT not convinced with the submission 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 : 25.03.2013. ORDER U/S. 263 OF THE 1.T. ACT, 1961 In thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... econd ch. No.218608 for ₹ 15,00,000/- dated 26.4.2004, both cheques were drawn at HSBC Bank, M G Road, Mumbai. The possession of the flat was also 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 under section 54 of the Act. The ld. AR finally submitted that since the first agreement dated 20.04.2004 coupled with payment through cheques and also took the physical possession and thus effective date of purchase of flat was 20.04.2004 and subsequent date of 30.05.2004 on which the same agreement was execute on the non-judicial stamp paper. The assessee has rightly calculated the gain as LTCG and not STCG as held by the ld.CIT(A) by taking the date of purchase from the date of second agreement i.e. 13.05.2004 by ignoring the facts that the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted on the plain paper was reduced on non judicial stamp paper on 13.5.2004. The letter filed by the AR at page 16 which was acknowledged by the office of AO on 25.10.2010 and the AO after considering this agreement came to the conclusion that the assessee has held the flat for more than 36 months and accordingly resultant capital gain on sale of the said flat being LTCG as claimed by the assessee and allowed the exemption u/s 54 of the Act . Thereafter we noted that the ld. CIT(A) by exercising the revisionary powers u/s 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 and prejudicial to the interest of revenue and set aside the order of AO for limited purposes to pass appropriate order after examining all the facts of the case. In this c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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