TaxTMI 
TaxTMI 
2024 (9) TMI 854
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....Erroneous" and "Prejudicial" order in respect of issue. The order of Principal Commissioner of Income-tax be quashed. 2. The learned Pr. Commissioner of Income-tax-1, Surat has erred on facts and in law in assuming Jurisdiction u/s. 263 by substituting his opinion with that of Assessing Officer, formed after detailed examination / inquiries and proper application of mind which is not permissible in law. The order of Principal Commissioner of Income-tax be quashed. 3. The learned Pr. Commissioner of Income-tax-1, Surat has grievously erred in law and on facts in directing the Assessing Officer to re-verify the deduction of Rs. 7,96,020/-u/s. 54B despite the verification done by Assessing Officer in order u/s. 143(3) r.w.s. 263 of the Act without offering any reasons for reinvestigation of issue already raised, verified and accepted by Assessing Officer after inquiry and appreciation of evidences. The order of Principal Commissioner of Income-tax be quashed. The appellant reserves the right to add, alter, modify, amend or withdraw any of the grounds of appeal before hearing." 3. The facts of the case in brief are that assessee filed on 28.08.2016 declari....
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....r his objection for the proposed action u/s 263 of the Act by offering explanation and evidence. In response thereto, assessee filed reply on 08.03.2024 which is at para 4.1 (pages 11 to 16) of the 263 order. The assessee submitted that AO had issued show cause notice wherein he had proposed addition of Rs. 1,79,850/- and Rs. 6,16,170/- (Rs.7,96,020/-). The assessee explained that Rs. 1,79,850/- was paid on 18.10.2014 out of down payment of land sold and Rs. 6,16,170/- on 20.01.2015 out of sale proceeds of land received on 30.10.2014 of Rs. 25,00,000/-. In respect of third property, Rs. 5,41,696/- was paid on 20.07.2015. It was, therefore, submitted that AO was satisfied with submission of details of the purchase of two agricultural lands amounting to Rs. 7,96,020/-. He had verified the issue and, therefore, proposed addition is not correct. The assessee relied on some decisions in support of his claim. The Ld. PCIT considered the submission and found that purchase of the alleged land was made by assessee before sale of the agricultural land. Hence, benefit of 54B is not attracted in case of the above claim. The Ld. PCIT further stated that no documentary evidences have been furnis....
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....ssessee is entitled to deduction u/s 54B of the Act. He submitted that the meaning of word purchase in section 54(1) has to be given its common meaning viz., buy for a price or equivalent of price by payment in time or adjustment towards a debt or for other monetary consideration. Once the assessee paid substantial amount to purchase the property within a period of one year, he is entitled to deduction u/s 54 of the Act. He has relied on the decisions in case of Balraj vs. CIT, (2002) 254 ITR 22 (Del) and Ms. Moturi Lakshmi vs. ITO, Tax Case Appeal No.181 of 2019, dated 17.08.2020 (Mad). 5. On the other hand, Learned Commissioner of Income-tax - Departmental Representative (Ld. CIT-DR) has strongly relied on the order of Ld. PCIT u/s 263. He stated that the original assessment order passed by AO on 29.11.2018 was found to be erroneous and prejudicial to the interests by the Ld. PCIT and in his order u/s 263 dated 31.03.2021, he has set aside the assessment order u/s 143(3) dated 29.11.2018 to decide de novo with a direction to examine the issue of capital gain deduction u/s 54B and 54F of the Act. The deduction u/s 54B pertains to Rs. 5,41,696/- and Rs. 7,96,020/- discussed abov....
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....ty, which certainly makes the order erroneous as well as prejudicial to the interests of revenue. Regarding the second investment of Rs. 6,16,170/-, the assessee stated that the amount was paid on 20.01.2015 out of sale proceeds of land received on 30.10.2014 of Rs. 25,00,000/-. Though the payment is claimed to have been made out of sale consideration but the Ld. AR has not submitted any documentary evidence i.e., copy of sale deed, details of mode and source of payment etc. in respect of purchase of both properties to prove that purchase of land for claiming deduction u/s 54B of the ACt was genuine. The assessee has submitted copy of sale deed of agricultural land at Kholwad but no copies of purchase deed have been submitted before us. In absence of such primary evidence, the claim of assessee of new investment for the purpose of deduction u/s 54B is not established. It was because of the same fact i.e., failure to furnish documentary evidence to prove purchase of these two agricultural lands that the Ld. PCIT and his predecessor had set aside the assessment orders. Before us also, the assessee has not supported his claim of payment with necessary documentary evidence. Therefore, ....