TaxTMI 
TaxTMI 
2015 (12) TMI 354
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....t before the AO during the course of the original assessment proceedings. 02. Facts apropos are that assessee a document writer, had filed his return for the impugned assessment year declaring income of Rs. 1,62,510/-. During the course of assessment proceedings, AO noted that assessee had omitted to include his transactions in an account with Canara Bank, Malur, in his accounts. Assessee stated that there was a cash deposit of Rs. 30,90,000/- in the said account which came out of sale of four sites not disclosed in the return of income. Assessee thereafter offered Rs. 11,58,289/- as short term capital gains and Rs. 5,55,525/- as long-term capital gains after claiming exemption u/s.54F of the Act, for investment in a residential property....
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....8 for Rs. 15 lakhs. Purchase of one residential house for Rs. 2,18,000/- was done by the assessee on 13.03.2008 and another house for Rs. 6,84,000/- on 06.08.2008. Relying on clause (ii) of proviso (a) to Section 54F(1) of the Act, CIT held that assessee had purchased one another residential house within one year from the date of transfer of the original asset thereby disentitling it from claim of deduction u/s.54F of the Act. Further as per the CIT it was difficult to establish nexus between cash deposits and sale of sites in the absence of corroborative evidence. He thus held the assessment order erroneous and prejudicial to the interests of Revenue. Exercising the powers vested on him u/s.263 of the Act, he remitted the case back to the ....
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....red under the law for correlating the deposits in the bank account with the sale of the assets. Further according to him once an assessee purchased one another residential property either within a period of two years from the date of transfer or within a period of one year prior to the date of transfer, then he could no more claim deduction u/s.54F of the Act, by virtue of sub-section (1) thereon. Thus according to him order passed by AO was erroneous and prejudicial to the interests of Revenue and CIT was justified in taking the view. 07. We have perused the orders and heard the rival contentions. Notice issued by the CIT u/s.263 of the Act is reproduced here under : "a) The amount of capital gains which was not appropriated by....
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....en dealt with by the AO, is reproduced hereunder : "During the course of assessment proceedings, the assessee was asked to furnish the transactions made in Canara bank, Malur. The assessee's Authorised Representative told that the assessee had omitted the accounts of this bank inadvertently while preparing the accounts. The Authorised Representat ive s tated that the cash depos i t of Rs .30,90,000/ - in Canara Bank, Malur Branch was on account of sale of four sites which had not been disclosed in the return of income inadvertent ly. The assessee and his Authorised Representative agreed to offer Rs. 11,58,289/- as Short term Capital gains and Rs. 5,55,525/- as Long term Capital gains (after indexation and considering the re-inv....
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....ed by CIT simply mentions that section 54F of the Act could not be allowed since assessee had returned capital gains after the detection. There is nothing in law which prevents an assessee to claim an exemption, for a reason that the claim of exemption had its genesis on a discovery done by the Revenue, earlier not disclosed by the assessee. In any case in the final order u/s.263 of the Act, CIT has simply stated that assessee was not eligible for claim u/s.54F(1) of the Act, in view of proviso (a). Proviso (a) to sub-section (1) of Section 54F is reproduced hereunder : (a) the assessee,- (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset ; or (ii) pur....