TaxTMI 
TaxTMI 
2016 (3) TMI 88
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....ed for along with books of accounts, bills and vouchers. During the course of assessment proceedings, the A.O. noticed that the assessee has sold a property and computed capital gains after claiming exemption u/s 54F of the Act. To ascertain the correctness of the claim made by the assessee, the A.O. issued a show cause notice dated 29.7.2011 and asked to furnish the details with regard to sale of property, investment made in residential house property so as to claim exemption u/s 54F of the Act. In response to show cause notice, the assessee has filed the relevant details before the assessing officer. The A.O., after considering the explanations offered by the assessee accepted the claim of exemption u/s 54F of the Act and completed the assessment. 3. The CIT, Rajahmundry issued a show cause notice u/s 263 of the Act dated 28.11.2013 and proposed to revise the assessment order. The CIT proposed to revise the assessment order for the reason that on examination of the assessment record, certain omissions and commissions were noticed, which rendered the assessment order erroneous, in so far as it is prejudicial to the interest of the revenue, in terms of section 263 of the Act. Th....
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....ve at the time of completing the assessment u/s 143(3) of the Act, therefore, the assessment order needs to be revised u/s 263 of the Act. Accordingly, the CIT revised the assessment order u/s 263 of the Act and directed the A.O. to pass consequential order within the time allowed and after giving opportunity of being heard to the assessee. Aggrieved by the CIT order, the assessee is in appeal before us. 7. The authorized representative of the assessee submitted that the assessment order is not erroneous in so far as it is prejudicial to the interest of the revenue, as the A.O. has made detailed enquiries with regard to the issues raised by the CIT. The A.R. further submitted that during the course of assessment proceedings, the A.O. has issued a detailed questionnaire, wherein he has examined the issue with regard to exemption u/s 54F of the Act. The A.R. further submitted that the A.O. has passed a consequential order giving effect to CIT's directions u/s 263 of the Act and has accepted all the issues raised by the CIT, except the issue with regard to the exemption u/s 54F of the Act. Therefore, it is abundantly clear that the CIT has revised the assessment order purely on sus....
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....rt of A.O. in examining the issues with regard to exemption u/s 54F of the Act. The Ld. A.R. of the assessee submitted that the A.O. has examined the exemption u/s 54F of the Act at the time of assessment proceedings and allowed the claim of the assessee. Therefore, the CIT was not correct in coming to the conclusion that the A.O. did not conduct any enquiry. The CIT questioned the allowability of exemption u/s 54F of the Act. The CIT was of the opinion that the assessee has invested the sale consideration for purchase of land and the construction was not completed within the time allowed u/s 54F of the Act, therefore, she is not eligible for exemption for the assessment year 2009-10. The contention of the assessee was that the A.O. has rightly allowed the exemption u/s 54F of the Act, as she has complied with the provisions of section 54F of the Act by reinvesting the sale consideration in purchase of another residential site and deposited the unutilized sale consideration in capital gain deposit scheme. 11. The question before us is whether exemption u/s 54F of the Act can be denied for the assessment year 2009-10, for failure to construct the property within the period of 3 y....
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....at she could not complete the construction of house property, because of various reasons therefore, she has offered the entire capital gain for tax for the assessment year 2012-13 and furnished the copy of return filed for the assessment year 2012-13 for having proof of offering the capital gain. On examination of the paper book filed by the assessee, we find that the assessee has offered the entire capital gain for the assessment year 2012-13. The contention of the CIT was that as per section 54F of the Act, only unutilized portion of sale consideration is taxable in the previous year in which the period of 3 years expires from the date of sale of original asset. But, the investment made in vacant site is to be taxed in the year in which the capital gain arises. We do not see any merits in the arguments of the CIT for the reason that the opinion of the CIT is quite contrary to law specified under section 54F of the Act. In the present case on hand, from the facts it is very clear that the assessee has offered the capital gain, to tax after completion of 3 years from the date of sale of the original assets and which is in accordance with law. Therefore, we are of the opinion that t....
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....reason that there is a distinction between lack of enquiry and inadequate enquiry. If there is inadequate enquiry, that would not by itself give occasion to the CIT to assume jurisdiction u/s 263 of the Act, merely because he has a different opinion on the issue. The CIT can do this, when there is a lack of enquiry by the assessing officer. In the present case on hand, there is no reason of whatsoever for the Commissioner to revise assessment order, as on both counts i.e. the order is not erroneous as the A.O. has verified the issues and allowed the claim made by the assessee u/s 54F of the Act. The order is also not prejudicial to the interest of the revenue, as the issue of exemption u/s 54F of the Act claimed by the assessee was in accordance with law. Therefore, we are of the opinion that the CIT without any justification assumed the jurisdiction to revise the assessment order which is not permissible under the law. 16. Now, it is pertinent to mention here the case laws relied upon by the assessee. The assessee relied upon the coordinate bench decision of this Tribunal in the case of Sri Sai Contractors vs. ITO in ITA No.109/Vizag/2012, wherein the Tribunal, after considerin....