GIAN CHAND ARORA,NAVI MUMBAI vs. PR CIT (CENTRAL)-1, MUMBAI

This appeal is filed by the assessee against the order passed by Pr. Commissioner of Income Tax, Central Mumbai-1, under Section 263 of the Income Tax Act, 1961 (the Act) dated 24th March, 2021, for A.Y. 2011-12 holding that assessment order passed under Section 143(3) read with section 147 of the Act dated 16th November, 2018, is erroneous and prejudicial to the interest of Revenue and hence, set aside. The assessee has raised following grounds of appeal:-

Brief facts of the case shows that assessee is an individual who filed his return of income under Section 139 of the Act on 29th February, 2012, declaring total income of ₹45,69,943/-. The return was processed under Section 143(1) of the Act accepting the return of income. Subsequently, the case of the assessee was reopened by issuing notice under Section 147 of the Act. The return was assessed under Section 143(3) read with section 147 of the Act on 16th November, 2018, accepting the return of income. Subsequently, on verification of records, the learned PCIT found that the case originally was reopened for examination of capital

The learned PCIT noted that assessee has sold an immovable property for ₹1,38,00,000/- and share of the assessee in the above property was 50%. The assessee has earned Long Term Capital Gain of ₹58,25,950/- and assessee claimed deduction under Section 54 of the Act at ₹58,25,950/-. The learned Assessing Officer has not examined the issue properly and in a casual manner as the return of income was filed which did not show any income under the head income from capital gains and did not show any claim of deduction under Section 54 of the Act. Despite this, the learned Assessing Officer allowed the same.

The assessee replied in the original return of income under Section 139(1) of the Act that assessee inadvertently missed out in showing the capital gains. However, in the computation of total income, it shows Long Term Capital Gain and claimed exemption under Section 54 of the Act.

Further, during the course of hearing before Assessing Officer the assessee submitted the

The learned CIT (A) held that in the return of income filed by the assessee under Section 139 of the Act or under Section 148 of the Act, capital gain on sale of property has not been offered. The learned CIT (A) further stated that assessee did not purchase any property for deduction under Section 54 of the Act.

The learned Authorized Representative submitted that assessee has submitted purchase deed, sale deed, bank statement as well as the computation of capital gain and deduction under Section 54 of the Act during the re–assessment proceedings. It shows that assessee and his wife are 50% owner of the property. The decision of the Goetze (India) Ltd. (supra) of Hon'ble Supreme Court does not debar claim of deduction to the extent of escaped

He further stated that the learned CIT (A) did not say that the learned Assessing Officer was required to be make any further enquiries. He therefore, stated that the order passed by the learned Assessing Officer under Section 147 read with section 143(3) of the Act is neither erroneous nor prejudicial to the interest of the Revenue.

The learned CIT Departmental Representative supported the order of the learned PCIT.

We have carefully considered the rival contentions and perused the orders of the lower authorities. In

In the Result, appeal of the assessee is allowed.