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TMI Blog2024 (1) TMI 1341X X X X Extracts X X X X X X X X Extracts X X X X ..... nue has proposed the following questions of law arising out of the order dated 05.07.2023 passed by the Income Tax Appellate Tribunal, "C" Bench, Ahmedabad [for short 'the Tribunal'] ITA No. 1333/AHD/2018 for A.Y. 2013-14: "a) Whether the Hon'ble Tribunal has erred in setting aside the order u/s 263 of the Income Tax Act,1961? b) Whether on the facts and in the circumstances of the case and in law, Hon'ble Tribunal has erred in not applying the ratio of the Hon'ble Apex Court decision in case of [2023] 149 taxmann.com 115 (SC) Commissioner of Income Tax vs. Paville Projects (P.) Ltd." 3. The Principal Commissioner of Income Tax, Circle-2(1)(2), Vadodara [for short 'PCIT'] initiated proceedings under section 263 of the Act,1961 in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed without making inquiry and verification which should have been made in terms of Explanation 2 to section section 263 of the Act,1961. 6. Being aggrieved, the assessee preferred appeal before the Tribunal on the ground that the facts of the case of V.S.M.R. Jagdadishchandran (supra) are distinguishable as the assessee did not create any mortgage on the property sold by him and the assessee had not taken any finance or loan from Titco Ltd and the land sold by the assessee was under attachment due to the personal guarantee given by the assessee and the account was settled by the purchaser by making a direct payment to Titco Ltd towards liability clearance of the land sold by the assessee. 7. The Tribunal, after considering the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cipal CIT on perusal of the records may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income Tax Officer. That would not vest the Commissioner with power to re-visit the entire assessment and determine the income himself at a higher figure. We thus find no error in the order of Ld. AO so as to justify initiation of 263 proceedings by the Ld Pr. CIT." 8. Learned Senior Standing Counsel Mr. Nikunt Raval for the appellant submitted that the PCIT has rightly followed the decision of the Apex Court in case of V.S.M.R. Jagdadishchandran (supra) to held that the assessee could not have claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that for the discharge of the mortgage, the assessee could not have sold the property as having clear and marketable title. It was therefore submitted that no interference may be made in the impugned order of the Tribunal. 10. Having heard learned advocates for the respective parties and considering the impugned order as well as the facts and the findings arrived at by the Tribunal, it is clear the Apex Court in the case of V.S.M.R. Jagdadishchandran (supra) has dismissed the appeal in the facts of the said case on the ground that the mortgage was created by the assessee himself. Relevant facts and the findings arrived at by the Apex Court are as under: "3. The assessee sold a house property No. 22, Chairman Muthurama Iyer Road, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by the assessee. The Tribunal, therefore, held that the deduction of the capital gains was not justified. Since the Tribunal declined to refer to the High Court the questions referred to above, the assessee filed an application under s. 256(2) of the Act before the High Court which has been rejected by the impugned order. The High Court has relied upon the decision of the Full Bench of the High Court in S. Valliammai & Anr. vs. CIT (1981) 127 ITR 713 (Mad) and has held that by discharging the mortgage debt subsisting on the property which was the subject-matter of a sale, the assessee was not either improving or perfecting his title or improving the property in any manner and, therefore, the amount paid for discharging the mortgage debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same he had acquired the interest of the mortgagee in the said property. The questions raised by the assessee in the application submitted under s. 256(2) of the Act do not, therefore, raise any arguable question of law and the said application was rightly rejected by the High Court. In the circumstances, even though we are unable to agree with the reasons given in the impugned order, we are in agreement with the order of the High Court dismissing the application filed by the assessee under s. 256(2) of the Act." 11. In the facts of the present case, the findings of fact arrived by the Tribunal is to the effect that the assessee did not create any mortgage on the property but he had given a personal guarantee to Titco Ltd for discharge of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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