Tribunal Restores Assessment, Upholds Deduction Claim u/s 54, Rejects Hyper-Technical Approach.

The Tribunal quashed the PCIT's order, which set aside the assessment due to the non-deposit of the capital gain amount in the capital gain account scheme. It found the PCIT's approach hyper-technical and confirmed that the basic conditions for claiming a deduction under section 54 were satisfied. The Tribunal restored the original assessment order, allowing the assessee's appeal and upholding the deduction claim under section 54 of the Act.

---

---

Issues involved:
The judgment involves the issue of whether the assessment order passed by the Assessing Officer was erroneous and prejudicial to the interest of Revenue due to the non-deposit of capital gain amount in the capital gain account scheme by the assessee, leading to a revision under section 263 of the Act.

Facts and Decision:
The assessee, a resident individual, sold an immovable property and declared income in the return. The Assessing Officer reopened the assessment under section 147 based on information received. The property was jointly owned and sold for a certain amount, resulting in capital gain. The assessee claimed exemption under section 54 of the Act by investing in a new property. The Assessing Officer accepted the return and completed the assessment. The Principal Commissioner of Income Tax (PCIT) found the capital gain amount was not deposited in the capital gain account scheme and set aside the assessment order, directing to disallow the deduction claimed under section 54. The Tribunal observed that the Assessing Officer thoroughly examined the issue of capital gain and the claim under section 54 during assessment. The revisionary authority did not doubt the capital gain or the investment made by the assessee. The Tribunal held that the PCIT's approach was hyper-technical and the basic conditions of section 54(1) were satisfied, entitling the assessee to claim the deduction. The exercise of power under section 263 was deemed invalid, and the order was quashed, restoring the assessment order. The appeal was allowed.

Conclusion:
The Tribunal found that the revisionary authority's decision to set aside the assessment order due to non-deposit of capital gain amount in the capital gain account scheme was invalid. The Tribunal upheld the assessee's entitlement to claim the deduction under section 54 of the Act, as the basic conditions were met. The assessment order was restored, and the appeal was allowed.

---