TMI Blog2017 (9) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... er Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee u/s. 253 of the Income-tax Act (the Act) is directed against the order passed by ld. Commissioner of Income Tax-14, Mumbai [the CIT], Mumbai dated 21.08.2014 u/s 263 of the Act for the Assessment Year 2010-11. The assessee has raised solitary ground of appeal that ld. CIT erred in passing the order u/s 263 of the Act. 2. Brief facts of the case are that the assessee filed return of income for relevant AY on 13.10.2010 declaring total income of ₹ 3,39,759/-. In the return of income, the assessee claimed exemption of Long Term Capital Gain (LTCG) u/s. 54F on sale of his rights in tenanted property. The assessment was completed on 08.03.2013 u/s 143(3) of the Act. The Assessing Officer (AO) allowed the exemption claimed u/s 54F of the Act after discussing the claim related to LTCG earned on transfer of asset/right in the property of ₹ 35,25,000/-. Subsequently, the assessment was revised by ld. CIT u/s 263 of the Act vide order dated 21.08.2014. The ld. CIT issued notice dated 14.06.2013 u/s 263 on the ground that assessee claimed deduction u/s 54F of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the correctness of the same was duly verified by the AO during the course of assessment proceeding which has been referred by AO in the assessment order. The assessee prayed that assessment order is neither erroneous nor prejudicial to the interest of Revenue. The contention of assessee was not accepted by ld. CIT qua the compensation of ₹ 16,50,00/- which was received by assessee in excess of his 25% share. The ld CIT held that AO should have examined the exemption claimed u/s 54F and should have restricted the same to the extent of assessee s share i.e. 25% of the sale consideration and the excess amount of ₹ 16,50,000/- should have been added to the total income of assessee. The ld. CIT(A) directed the AO accordingly. Aggrieved by the order of ld. CIT, the assessee filed the present appeal before us. 3. We have heard Dr. P. Denial Advocate / ld. Authorized Representative (AR) of the assessee and Sh. N.P. Singh CIT-DR/ ld. Departmental Representative (DR) for the Revenue and perused the material available on record. The ld. AR of the assessee argued that assessment order passed by AO is neither erroneous nor prejudicial to the interest of Revenue. The AO made pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the provisions of section 263 of Income Tax Act, which may be reads as under; Revision of orders prejudicial to revenue. 263. (1). The Commissioner may call for and examine the record3 of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue3, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the Assessment, or cancelling the assessment and directing a fresh assessment. Explanation.-For the removal of doubts, it is hereby declared that, for the purposes of this sub- Section,- (a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the assessment order as being erroneous and prejudicial to the interest of revenue. 6. We may also refer here that the assessing officer while passing/ framing assessment order performs a quasi-judicial function. The jurisdiction under section 263 can be exercised only when both the twin condition i.e. the order of assessing officer is erroneous and so far as prejudicial to the interest of revenue. These conditions are conjunctive as has been held by Hon ble Supreme Courts in a Malabar Industrial Company Ltd (supra). Further, the order of assessing officer cannot be termed erroneous unless it is not in accordance with law. If assessing officer in accordance with law makes a certain assessment, it cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more deliberately. Section 263 does not visualize a case of substitution of judgment by the Commissioner for that of the assessing officer who passed the order unless the decision is held to be erroneous. Where the assessing officer has exercised the quasi-judicial power vested in him according to law and arrived at the conclusion such conclusion cannot be found t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any expenditure if made in the course of sale of the said building structure known as Shreeji Mansion. We have reduced our above understanding in writing on 25 day of July 2002 for sake of our personal understandings and also with an intention to solve the questions if arise in future in our absence relating to building structure and the units framed therein Without prejudice to our agreement of understanding as aforesaid, I have on my own and with good wishes not shared a sum of ₹ 16,50,0001- (Rupees Sixteen lakh fifty thousand only) from out of total sale proceeds of building known as Shreeji Mansion referred to hereinabove as a one single unit over and above his 25% share therein which would worked out to ₹ 18,75,0001- (Rupees eighteen lakh seventy five thousand only) as if Shri Bharat Kantilal Mehta would have the same to the extent of his share as increased by the said amount. I am making the above statements and have made the same without any force or under any pressure and the same is made by me under good and health conditions and as per facts. 8. The assessing officer issued notices under section 133(6) along with summon under section 131 to Smt. M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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