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TMI Blog2023 (12) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in section 263 of the Act. 2. The learned PCIT erred in fact and in law in not dropping the proceedings u/s. 263 despite the fact that the original order passed by the AO was not erroneous and prejudicial to the interest of the revenue. 3. The learned PCIT erred in fact and in law in revising the assessment by invoking powers u/s. 263 of the Act which was completed by way of assessment u/s 143(3) of the Act despite the fact that the conditions stipulated for invoking such extra-ordinary jurisdiction were not satisfied. 4. The learned PCIT erred in fact and in law in not dropping the proceedings u/s. 263 and observing that the order passed u/s. 143(3) was made without making inquiry or verification. 5. The learned PCIT erred in fact and in law in setting aside the assessment u/s. 143(3) and directing the Deputy Commissioner of Income Tax, Circle 1(1), Rajkot ('the AO")to frame fresh assessment. 6. The learned PCIT erred in fact and in law in setting aside the assessment u/s 143(3) of the Act despite the fact that the learned AO has passed assessment order after proper examination and verification of facts on records. 7. The learned PCIT erred in fact and in law i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry details and verifying the assessee's eligibility to claim of exemption u/s. 54F of the Act. 3.1. Before us, the solitary contention raised by the Ld.counsel for the assessee was that there was no prejudice caused to the Revenue by allowing assessee's claim of exemption u/s. 54 of the Act since even in terms of section 54F of the Act, the assessee was eligible to the same quantum of exemption if not higher than that claimed u/s. 54 of the Act. She pointed out that the exemption of capital gains u/s. 54F of the Act was to be computed in the proportion of the cost of acquisition of the new asset to the net consideration received by the assessee on the sale of the asset on which capital gain was earned. She contended that the records showed that the cost of new asset was far more than the net consideration on the sale of the asset, Rs. 1.67 crores being the cost of new asset while the net consideration on sale of original asset being Rs. 1.64 Crs.She, therefore contended that even under Section 54F of the Act her entire capital gain was exempt from tax and, therefore, there was no prejudice caused to the Revenue in allowing a lesser claim on exemption by the assessee u/s. 54 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the original asset, is chargeable under the head "Income from house property". Following second proviso shall be inserted after the existing proviso to sub-section (1) of section 54F by the Finance Act, 2023, w.e.f. 1-4-2024: Provided further that where the cost of new asset exceeds ten crore rupees, the amount exceeding ten crore rupees shall not be taken into account for the purposes of this sub-section. Explanation.-For the purposes of this section,- [***] [***] "net consideration", in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. (2) Where the assessee purchases, within the period of two years after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head "Income from house property", other than the new asset, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) or, as the case may be, clause (b) of sub-section (1), Exceeds (b) the amount that would not have been so charged had the amount actually utilised by the assessee for the purchase or construction of the new asset within the period specified in sub-section (1) been the cost of the new asset, shall be charged under section 45 as income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw the unutilised amount in accordance with the scheme aforesaid. Following second proviso shall be inserted after the existing proviso to sub-section (4) of section54F by the Finance Act, 2023, w.e.f. 1-4-2024: Provided further that the net consideration in excess of ten crore rupees shall not be taken into account for the purposes of this subsection." 4.1. He contended that the section required the assessee to invest the consideration not invested in a new asset in the capital gain account scheme and which if not utilized for the said purpose was to be subjected to tax as specified in the section. He contended that the calculation of exemption u/s. 54F of the Act was not as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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