TaxTMI 
TaxTMI 
2025 (6) TMI 721
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....dated 23.08.2022 and 23.11.2022. The Assessing Officer after examining the submissions of the assessee, accepted the return of income filed by the assessee. 3. The learned PCIT, Hyderabad-4, Hyderabad was of the view that the assessment order passed by the Assessing Officer is not only erroneous, but, also prejudicial to the interest of Revenue and, therefore, by exercising his revisional powers u/sec.263 of the Act, issued show cause notice to the assessee on 03.01.2025 calling the assessee to furnish his explanation. The reasons enunciated by the learned PCIT in the show cause notice are that, the assessee has purchased immovable property for a consideration of Rs. 4,40,00,000/- from his wife Smt. Radha Kumari Boddapaty on 15.05.2021 through an un-registered agreement of sale and claimed deduction on the impugned transaction u/sec.54 of the Act. The learned PCIT further noted that, since the agreement of sale has not been registered, therefore, the un-registered agreement cannot be treated as a 'valid transfer' and thus, the claim of deduction made by the assessee u/sec.54F of the Act at Rs. 4,26,28,194/- is not allowable. In response, the assessee has filed his submissions on 0....
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....e Tax Act, 1961. Further, in recent judgments, the Hon'ble Supreme Court held that, even though an agreement to sell does not transfer proprietary rights in an Immovable Property, however, when the prospective purchaser performs his part of the contract and receives possession of the property, then he is said to have acquired possessory title and the sale is protectable under section 53A of the Transfer of Property Act, 1882. He accordingly, submitted that, the order of the Assessing Officer allowing exemption u/sec.54F of the Act is in accordance with law and requested the PCIT to drop the proposal for invoking provisions of sec.263 of the Act. The learned PCIT considering the facts and circumstances of the case and the assessment order passed by the Assessing Officer and the submissions filed by the assessee, being not convinced with the explanation of the assessee, observed that the assessment order passed by the Assessing Officer dated 29.11.2022 is erroneous, as it is prejudicial to the interest of revenue and, therefore, directed the Assessing Officer to pass fresh assessment order after affording opportunity to the assessee by relying on various case laws. 4. Aggrieved by t....
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....54 ITR 22 (AP) and decision of ITAT, Chennai in the case of Muthu Daniel Rajan vs., ACIT ITA.No.1675/Chny/ 2019. Therefore, he submitted that, the assessment order passed by the Assessing Officer is neither erroneous nor prejudicial to the interest of the Revenue. Further, the learned PCIT without bringing on record as to how the assessment order passed by the Assessing Officer is erroneous, simply set-aside the assessment order. Therefore, he submitted that, the order of the PCIT should be set-aside. 6. Shri Narender Kumar Naik, learned CIT-DR, on the other hand, supporting the order of the learned PCIT submitted that, although, the Assessing Officer has issued notice u/sec.142(1) of the Act and called various details, but, failed to gather relevant information in light of exemption claimed u/sec.54 of the Act, which is clearly evident from the show cause notice issued by the PCIT where he has brought-out the claim in light of un-registered sale deed for purchase of property from related party [wife]. Therefore, it is a clear case of lack of enquiry by the Assessing Officer on the issue in light of relevant provisions of the Act which render the assessment order erroneous and pre....
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....relief without enquiring into the claim. And further, the order has not been made in accordance with any other direction or instruction issued by the Board u/sec.199 of the Act. In the present case, going by the facts on record, it is undisputedly clear that, the claim of assessee towards deduction u/sec.54F of the Act is not based on relevant evidences which is evident from the claim made by the assessee and allowed by the Assessing Officer on the basis of an un-registered sale agreement with related party. Although, the assessee claims that it is a bonafide transaction between the two parties and the assessee has invested entire consideration received towards sale of original asset for purchase of new asset and because of certain disputes including prohibitory orders issued by the VAT Authorities on the impugned property, registration could not be done, but, in our considered view, except stating this fact in the purported sale agreement, the assessee could not file any evidence to prove that he has made any effort to register the property by presenting document to the registration authorities. Therefore, the averment of the Counsel for the Assessee on the basis of an un-register....