Tribunal upholds PCIT's revision-order, finds assessment erroneous in exempting without declaring notional income.

The tribunal upheld the revision-order passed by the Principal Commissioner of Income Tax (PCIT) under section 263, finding the assessment-order erroneous in allowing exemption under section 54F without declaring notional income from multiple properties. The tribunal remanded the matter for a fresh assessment by the Assessing Officer, emphasizing that its decision was a prima facie impression and should not influence the AO's decision on the merits.

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Issues involved:
The issues involved in the judgment are the validity of the revision-order passed by the Principal Commissioner of Income Tax (PCIT) under section 263 of the Income-tax Act, 1961, regarding the assessment-order passed by the Assessing Officer (AO) for the Assessment Year 2015-16.

Facts and Decision:
The assessee declared a long-term capital gain from relinquishment of right and claimed exemption under section 54F based on new investment in a residential house. The PCIT found the assessment-order erroneous as the assessee owned more than one residential property and had not declared notional income from those properties. The PCIT set aside the assessment-order for a de novo assessment. The assessee contended that she owned only one residential house on the transfer date and provided details to support her claim. However, the tribunal found that the assessee was the owner of at least two residential properties, leading to the conclusion that the exemption under section 54F was wrongly allowed, and there was underassessment of taxable income. Consequently, the tribunal upheld the revision-order, emphasizing that its decision was a prima facie impression and should not influence the AO's decision on the merits.

Conclusion:
The tribunal upheld the revision-order passed by the PCIT under section 263, concluding that the assessment-order was erroneous and prejudicial to the interest of revenue due to the incorrect allowance of exemption under section 54F and the failure to declare notional income from multiple properties. The appeal of the assessee was allowed, and the matter was remanded for a fresh assessment by the AO.

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