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TMI Blog2018 (9) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... . For the assessment year under dispute, the assessee filed his return of income on 30th September 2013, declaring total income of Rs. 6,75,960. The return of income filed by the assessee was selected for scrutiny and the Assessing Officer completed the assessment under section 143(3) of the Act vide order dated 29th February 2016, determining the total income at Rs. 7,06,240. The learned Principal Commissioner of Income Tax in exercise of power under section 263 of the Act called for the assessment record of the assessee and after examining it was of the view that the assessment order passed by the Assessing Officer is erroneous and prejudicial to the interest of Revenue, because, assessee's claim of deduction under section 54 of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be restricted to one flat. Accordingly, he set aside the assessment order with a direction to the Assessing Officer to restrict the deduction u/s 54 of the Act to one flat purchased by the assessee. 3. The learned Authorised Representative submitted, the observations of the revisional authority that before allowing assessee's claim of deduction under section 54 of the Act the Assessing Officer has not made any enquiry is factually incorrect and without any basis. Drawing our attention to notice dated 13th January 2016, issued under section 142(1) of the Act a copy of which is at Page-1 of the paper book, the learned Authorised Representative submitted that in the annexure to the said notice, the Assessing Officer has specifically raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter, keeping in view the provisions of section 54 of the Act applicable for the relevant assessment year and the judicial precedents governing the issue, it can be said that the view expressed by the Assessing Officer is a possible view. Therefore, only because the Assessing Officer's view is not acceptable to the revisional authority, the assessment order cannot be held to be erroneous and prejudicial to the interests of Revenue. In support of the aforesaid contention, the learned Authorised Representative relied upon the following decisions:- i) MOIL Ltd. v/s CIT, [2017] 396 ITR 244 (Bom.); ii) Shivlal Choudhuri v/s PCIT, [2017] 88 taxmann.com 861; iii) Narayan Tatu Rane v/s ITO, [2016] 70 taxmann.com 227; iv) Metacaps Eng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rival submissions and perused materials on record. We have also applied our mind to the decisions relied upon. It is evident from the impugned order passed under section 263 of the Act, the learned Principal Commissioner of Income tax has held the assessment order to be erroneous and prejudicial to the interests of Revenue on the reasoning that the Assessing Officer has failed to examine whether assessee's claim of deduction under section 54 of the Act in respect of two flats purchased by him is in compliance to the conditions mentioned under the said provision. Therefore, the first issue which requires consideration is, whether assessee's claim of deduction under section 54 of the Act was examined by the Assessing Officer in course of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the context of ratio laid down in the judicial precedent cited before him. Therefore, the observation of the learned Principal Commissioner of Income-tax that the Assessing Officer has not examined the issue is factually incorrect. As regards the observation of the DCIT that in view of Explanation-2 to section 263 of the Act the Commissioner of Income-tax has jurisdiction to revise the assessment order if he feels that enquiry which ought to have done has not been done, in our view, Explanation-2 to section 263 of the Act cannot be interpreted in a manner to suggest that by virtue of such explanation, the revisional authority is clothed with unbridled power to invoke his jurisdiction under section 263 of the Act simply because in his opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings under section 263 of the Act. 7. Even otherwise also, the assessee has a strong case on merit. As could be seen from the facts available on record, though, as per the building plan the residential units purchased by the assessee have been shown as two flats, however, the material on record clearly suggest that both the flats are adjacent to each other and have been converted to one residential unit having single entrance and a common kitchen. The aforesaid factual position has not been controverted by the learned Principal Commissioner of Income-tax. Therefore, as per the provision of section 54 of the Act, applicable to the impugned assessment year, "a residential house" does not mean one residential house. This interpretation ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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