TaxTMI 
TaxTMI 
2024 (6) TMI 972
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.... Commissioner of Income Tax, Rajkot - 1 erred in passing order under Section. 263 of the Act holding Assessment order passed by the Assessing officer as erroneous in so far as it is prejudicial to the interest of revenue and accordingly, as per the provisions of sub Section 1 of Section 263 of the I. T. Act, directed the AO to enhance the assessed income by Rs.9,86,871/-." 3. The brief facts of the case are that during the consideration, the assessee sold and claimed capital loss of Rs. 9.86 lakhs on sale of car by indexing the purchase price of car and adjusting the loss against long-term capital gain. The PCIT initiated 263 proceedings by observing that according to Section 2(14) of the Act, a car is a "personal asset/effect" and capital....
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....r treating the same as capital asset was the contravention of section 2(14) of I. T. Act, has rendered the assessment order passed by the AO erroneous. Due to allowing of such wrong claim, the tax liability was reduced and therefore this order was also prejudicial to the interest of Revenue. As regards the assessee's reliance oil the decision of Hon'ble Gujarat High Court in the case of CIT v/s Akshar Jewellers (2003) 259 ITR 502, wherein it has been held that when on the basis of available material the AO has taken particular view, the mere fact that different view cannot be a basis for invoking of provisions of section 263 of Act, it may be mentioned that the facts of the case relied upon by the assessee are entirely different and n....
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....R submitted that the assessing officer had clearly erred in fact and in law in allowing the claim of set off of capital loss on sale of car, which is the personal asset of the assessee against other long-term capital gain. 8. We have heard the contentions of Ld. D.R. and perused the material on record. The issue for consideration before us is whether a motorcar, which has been used by the assessee for his personal use, would qualify as a capital asset and the assessee would be eligible to claim benefit of set off of loss on sale of motor car against other capital gains made by the assessee. We observe that in the case of H.H. Maharaja Rana Hemant Singhji 103 ITR 61 (SC), the Hon'ble Supreme Court made the following observations: "The....
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....ot be characterized as 'personal use' and thus, antique car held, but never used by assessee was not a 'personal effect' as occurring in Section 2(14)(ii), rather it was a capital asset. Therefore, surplus realized on sale of car was chargeable to capital gain under Section 45 of the Act. 10. Therefore, in our considered view, whether a motor car is a capital asset or not, or would qualify as a "personal effect" and hence falling outside, the purview of a capital asset would depend upon the use to which the motor car has been put by the assessee. In case, as held in the aforesaid decision by Mumbai ITAT, the motor car is not at all used for personal purposes, but has been held as an asset i.e. possession of pride as a collector's item, the....