TaxTMI 
TaxTMI 
2020 (2) TMI 1686
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....entatives that the relevant factual backdrop involved in all these cases qua assumption of revision proceedings is identical. These nine assessees are stated to be belonging to the same family. They had derived long-term capital gains on sale of painting(s) in the relevant previous year. These assessees thereafter chose to reinvest the same in REC bonds within six months to the tune of Rs.50,00,000/- each in two financial years 2013-14 & 2014-15. We thus take up ITA No.1177/Kol/2018 in case of Shri Rajnish Agarwal, as the 'lead' case. 3. Coming to the foregoing lead case, we notice that this assessee had received two payments of Rs.90,00,000/- and Rs.10,00,000/- on 07.08.13 and 19.10.13 as sale price of the painting(s) sold followed by reinvestment on 01.11.13 and 28.04.14 Rs.50 lakh each; respectively. The Assessing Officer framed regular assessment in his case on 22.03.16 accepting the income of Rs.62,47,970/-. The PCIT has invoked his revision jurisdiction vested u/s 263 of the Act to term the said regular assessment as an erroneous one causing prejudice to interest of the Revenue as under: "8. Now, the second error noticed by me in the assessment order has been examined. As ....
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....g. Contrary to the submission of the Ld. AR claiming that there was a sale agreement between the assessee and purchaser of painting, M/s. Ambition Suppliers Pvt. Ltd. as per which, sale was to be completed only on making a final payment, there is a sale bill available in the assessment record in which, it is recorded as "being sale of painting". A scan copy of this bill is reproduced as under :- 9.2 Had there been any agreement between the assessee and the purchaser of painting as now, produced before me, it would have been certainly mentioned in the sale bill stating as "being sale of painting as per agreement dated 07.08.2013", Absence of any such narration in the said bill, it shows that the agreement now, being produced before me is doubtful in nature. On the basis of the sale bill as reproduced as above, it is very clear that the sale was done on 07.08.2013. In case of any movable property, the date of issue of sale bill is taken as the date of transfer. Therefore, in my considered opinion, the date of transfer of painting in the present case for LTCG of Rs.99,99,900/- is on 07/08/2013. Therefore, the first investment made on 02/11/2013 of Rs.50 lakh is within the period of....
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....the purpose of computing LTCG shall be decided by the AO. After deciding the date of transfer on account of sale of painting for the purpose of computation of LTCG, the six months period shall be taken by the AO form the date of transfer and not from the end of the month in which transfer took place. Therefore, for computing six months, number of days taken in six months is to be computed to find out whether second investment made by the assessee is within six months or not and accordingly, a fresh assessment order shall be passed computing the LTCG on sale of painting allowing the deduction u/s.54EC as per my direction as discussed in this order. 11. In the result, the assessment order u/s 143(3) dated 22/03/2016 is set aside and restored back to the file of the A.O to the extent of computing LTCG on sale of painting and then allowing deduction u/s 54EC as per the provision of the Act, keeping in view my above direction as discussed in previous para." 4. We have heard rival pleadings. Learned authorized representative inter alia submits that the PCIT has erred in law and on facts in invoking his section 263 revision jurisdiction. He invites our attention to the twin dates of ....
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....0,00,000/- as on 07.08.13 and Rs.10,00,000/- on 19.10.13 followed by reinvestment of Rs.50,00,000/- each in REC bonds pm 01.11.13 and 28.04.14; respectively. Although learned CIT-DR has made his sublime effort to support the PCIT's findings that the relevant agreement dated 07.08.13 was nowhere examined during the course of assessment, the same is far from convincing since the fact remains that the PCIT has himself passed his order on merits after holding the assessees not entitled for section 54EC relief hereinabove going by the very dates only. Hon'ble Delhi high court's decision in ITO vs. D.G. Housing Projects [2012] 343 ITR 319(Delhi) distinguishes the twin aspects of lack of enquiry and error in judgment at the instance of assessing authority vis-à-vis section 263 revision jurisdiction. Their lordships are of the opinion that once the assessing authority decides the case on merits which is stated to trigger section 263 mechanism in motion, it cannot be held that the same is an instance for remitting the matter back to the Assessing Officer in revision. We thus decline the Revenue's foregoing first argument that the assessee's instant grievance seeking to reverse the PC....