TMI Blog2016 (12) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... al gain tax upon the assessee, because, she has made investment in NHAI bond. She has made investment in the capital gain account with State Bank of India. Apart from this, she has acquired house and made investment of ₹ 1,27,50,000/-. This house has been acquired within the time limit available in section 54. Under both the circumstances, there will not be any long term capital gain tax upon the assessee, and thus, there will not be any prejudice to the Revenue. In such situation, the ld.Commissioner ought to have dropped the proceedings under section 263 of the Income Tax Act. We allow the appeal of the assessee and quash the order of the ld.Commissioner passed under section 263 of the Act. - Decided in favour of assessee - ITA.No.528/Ahd/2014 - - - Dated:- 9-12-2016 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER For The Assessee : Shri P.M. Mehta with Shri G.M. Thakor, AR For The Revenue : Shri Jagdish, CIT-DR ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: Assessee is in appeal before the Tribunal against order of ld.CIT-I, Baroda dated 11.12.2013 passed for Asstt.Year 2000-10 under section 263 of Income Tax Act, 1961. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wance of exemption u/s. 54F was irregular. 5. In response to the show cause notice, the assessee has filed written submission which has been reproduced by the ld.CIT. The submissions are available on page nos.5 to 9 of the paper book. We deem it appropriate to take note of the submissions. It reads as under: 1 With reference to the above captioned subject it is stated that the assessee was in receipt of notice u/s 263 of the Income Tax Act,1961 (hereinafter referred to as the Act ) dated 10.10.2013 giving; the following reasons on which order u/s 143(3) of the Act passed by the DCIT, Circle-3, Baroda has been considered as erroneous and prejudicial to the interest of revenue. ...... During the year you have shown LTCG of ₹ 60,62,502/- on sale of capital asset. ₹ 50,00,000/- was invested in National Highway Authority of India and ₹ 25,00,000/- was invested with SBI capital gain A/c on 22.09.2009. Exemption of ₹ 50 lac was claimed u/s 54EC and ₹ 10,62,502/- u/s 54F. Exemption u/s 54F is available on long term capital gains arising out of long term capital asset not beading a residential property. Also as per Sec 54EC the maximum amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he brief facts of the Long term capital gain and exemption claimed from thereof in the return of income during the year under consideration. 5.1 During the year under consideration assessee had earned Long term capital gain of ₹ 92,02,625/- on transfer of residential house, out of which valid indexation was claimed for ₹ 31,40,123/- and hence gross long term gain for ₹ 60,62,502/- arose to assessee. Out of said capital gain assessee had invested. a. the sum of ₹ 50 lac in National High Ways Authority Of India [NHAI] Bond on 29th July 2009 as to claim exemption u/s 54EC and b. Deposited sum of ₹ 25,00,000/- in capital gain deposit scheme on 22.09.2009 (before the due date of filing of return of income) as to claim exemption u/s 54 of the Act. Computation of capital gain is produced as below for your ready reference: Particulars Amount Amount Sale/Transfer of Residential property 92,02,625 Less: Index Cost of Acquisition (31,40,123) Gross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital asset not being a residential house. As there is capital gain from transfer of long term capital asset being residential property in the case of assessee, section 54F claim was found to be irregular And consequently as a manifest count was also raised that u/s 54EC maximum exemption is permissible for ₹ 50 lac only and there is no provision for investing the capital gain in specified capital gain scheme account. 6. For your honur's kind perusal assessee submits the following evidences, on closely look to the same it will remain less to justify about the claim made u/s 54 of the Act and not u/s 54F of the Act. a. Copy of statement of capital gain saving scheme A/c in the name of assessee (Annexue-2) - - On peruse of the same your honour will identify that the investment was made in capital gains scheme account. b. Copy of DD No. 114879 drawn on the name of 'Ushaben J Brahmbhatt (Annexure-3) - On peruse of the same your honour will find a fact the withdrawal was made from the capital gain scheme account for the purpose of investment in new residential house purchased from Ushaben J Brahmbhatt. Detail of the same can be verified from a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned order. It is pertinent to take note of the finding of the ld.CIT(A) in this connection as under: 2.2 The submission of the assesses has been considered. The case record of the assessee has also been examined. The assessee has filed a copy of deed of purchase in respect of property of bungalow No. 282/283 having plot area sq. rntrs, 736.87 i.e. about 881,30 sq, yards, and a residential bungalow thereon of 190 sq. yards in Manekbaug Cooperative Society Ltd, Near Shreyas Foundation, Ambawadi, Moje Vasana, Ahmedabad which was executed on 29.09.2009 for a consideration of ₹ 2,55,00,000/-. The details of payments i.e. investment made are as under: 1 Rs.52,50,000 By purchaser No.1 i.e. Rajesh Bharatbhai Shah by cheque No.696392 dt.29.9.2009 drawn on Bank of Baroda Ambawadi, Ahmedabad. 2 Rs.1,02,50,000 By purchaser No.2 i.e. Smt. Geetaben Bharatbhai Shah by cheque No.696393 dt.29.9.2009 drawn on Bank of Baroda Ambawadi, Ahmedabad. 3 Rs.25,00,000 By purchaser No.2 i.e. Smt. Geetaben Bharatbhai Shah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n exemption account, the assessee has not quoted specific section under which it was claimed. Therefore, the submission of the assessee that while drafting the assessment order A.O erred in typing the order whereby exemption claim u/s. 54 is shown as exemption u/s. 54F is unfounded. It is .apparent that there is error in the order of the Assessing Officer in presuming and then allowing exemption u/s 54F. The Assessing Officer also failed to enquire total investment which actually comes to ₹ 50,00,000 + 1,27,50,000 = 1,77,50,000/- against sale proceed of ₹ 92,02,625/-. The order of the Assessing Officer is not only erroneous but also prejudicial to the interest of revenue. 3. In view of the above, the order of the A.O is set-aside with a direction to re-compute the long term capital gain, after examining the allowability of claim of exemption in respect of investment made as per the provisions of Income-tax Act. He is also directed to make proper enquiry regarding availability of fund for investment as also investment in NABARD. 7. Before embarking upon an inquiry on the facts of the present case, we deem it appropriate to take note of fundamental tests prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision of the AO cannot be held to be erroneous simply because in his order he does not make an elaborate discussion in that regard. 9. In the light of the above, let us examine facts of the present case. A perusal of the submissions made by the assessee as well as finding recorded by the ld.CIT, it appears that the ld.Commissioner did not appreciate the facts in right perspective. The first emphasis by the assessee was that she has not made claim under section 54F. It is an error committed by the AO. The ld.Commissioner ought to have examined this aspect on merit before setting aside the issue to the file of the AO. It is a just an apparent error which can be rectified even by the AO under section 154. It is not such an issue which has caused any prejudice to the Revenue. If under section 54 exemption was available to the assessee, then merely making a wrong mention of section 54F by the AO exemption would not be denied to the assessee. The ld.Commissioner did not analysis this aspect while observing that the AO has committed an error and his order is an erroneous one. Apart from the above, it is to be seen that section 54 contemplates that in case the assessee being an in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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