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Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: Shri Mahavir Singh & Shri G Manjunatha
Date of hearing 25-10-2017 Date of pronouncement 25-10-2017 O R D E R
Per G Manjunatha, AM :
This appeal filed by the assessee raises the following grounds of appeal:-
“I. INVOKING SECTION 263 OF THE ACT, 1961 .1 The Hon. Commissioner erred in invoking provision of section 263 of the Act and holding order Us. 143(3) of the Act dated 31.10.2011 assessed by JCIT 21(2), Mumbai as erroneous and prejudicial to the interest of the revenue on the issue of allowability of Rs. 5,64,165/- while working out taxable Short Term Capital Gain. 1.2 The Hon. Commissioner erred in invoking the provision of section 263of the Act ignoring the fact that the assessee had filed relevant details and submitted explanations during the course of assessment proceedings in pursuance of the notices issued Us. 142(1) as well as U/s.143(2) of the Act and after considering the materials and explanations. the Ld. JCIT had come to definite conclusion and allowed the deduction of Rs. 5,64,165/-. 1.3 Reliance is place on the following judicial pronouncement. a] CIT v. Gabrial India Ltd., 203 ITR 108 (1993) (BOM). The assessee had offered the explanation that the issue was examined in details by the ITO. The order cannot be branded as erroneous by the commissioner because according to him the order should have been written more elaborately. The Court observed that when ITO has exercised the quasi-judicial power vested in him in accordance with the law and arrived at a conclusion, such a conclusion cannot be termed to be erroneous simply because the Commissioner doesn't feel satisfied with the conclusion. The Court held that in order to exercise power uls.263, the order must be presented in material before the CIT and if that order was erroneous in so far as it is prejudicial to the interest of the Revenue. CIT v. Arvind .Jeweller, 259 ITR 502(Guj.) b] The Court held that the assessee had produced relevant material and offered explanations in pursuance of the notices issued u/s. 142 (1) as well as u/s. 143(2) of the Act and after considering the materials and explanations, the Income Tax Officer had come to a definite conclusion. Merely because the Income-tax Officer had taken a particular view with which the Commissioner did not agree cannot form the basis for an action u/s. 263 of the Act and as such order of Revision was not justified. The Gujarat High Court applied the principles laid down by the Supreme Court in the case of Malabar Industrial Co. Ltd. 's case mentioned above and decided the case in favour of the assessee. ci Antala Sari jaykuniar Ravjibhai v. Cli 120121 135 lTD 506 (Rajkot) (Trib.), Roshan Lal Vegetable Products (P) Ltd. v. ITO [2012] 51 SOT 1 (URO)(Asr.)(Trib.) Fine Jewellery(lndia)Ltd. v. ACIT [2012] 19 ITR 746 (Mum.)(Trib.) Held that the Assessing Officer made proper enquiry and examined accounts, it could not be said that there was non- application of mind by him. Hence, the action U/s 263 was invalid.
CIT v. Design & Automation Engineers ( Bombay) (P) Ltd. 120081 323 LTR 632 (Born.) ([IC). Manish Kumar v. CIT 120121 134 lTD 27 ( Indore ) (Trib.) Held Where the Assessing Officer examined all the details with respect to assessee's claim of deduction, the order could not be said to be erroneous or was passed without application of mind merely because the same was not elaborate order. e] CIT v. Ashish Rajpal 12009 1320 ITR 674 (Delhi) (HC) CIT v. Vikash Polymers 120101194 Taxman 57 (Delhi) (HC) Where the assessing officer during the scrutiny assessment proceedings raised a query which was answered by the assessee to the satisfaction of the assessing officer but the same was not reflected in the assessment order by him, a conclusion cannot he drawn by the Commissioner that no proper enquiry with respect to the issue was made by the assessing officer, and enable him to assume jurisdiction under section 263 of the Act. f Anil Shah v. ACIT 120071 162 Taxman 39 (Mum.) (Trib.) If the Assessing Officer allows the claim on being satisfied with the explanation of assessee, on an enquiry made during the course of Assessment proceedings, the decision of Assessing Officer cannot be held to be erroneous, on ground that there is no elaborate discussion in that regard in the order. It is the practice that whenever any claim of the assessee is accepted, Assessing Officer may not discuss the same in his order.
HOLDING THAT A.
FAILED TO ASCERTAIN WHETHER THE 2. DEPOSIT OF RS. 5,64,165/- IS AN ELIGIBLE DEDUCTION WITHIN THE MEANING OF SECTION 48 OF THE ACT. 2.1 Without prejudice to what has been stated hereinabove, The Hon'ble Commissioner erred in holding that Rs. 5,64,165/- is not an eligible deduction U/s. 48 of the Act and consequently order U/s. 143(3) of the Act passed by JCIT, 21(2), Mumbai is held to " erroneous and prejudicial to the interest of the revenue on the issue. 2.2 The appellant has paid the said amount of Rs. 5,64,165/- at time of acquisition of the property from the builder. The said payment is directly attributable to the cost of acquisition being part of the agreement and additional amount payable under the agreement.
Hence , the said payment of Rs. 5,64,165/- is inseparable to cost of property. In view thereof, it squarely falls under sub clause (i) of section 48 of the Act. Further, the benefit of the said payment has been specifically transferred under the sale agreement and same forms part of the sale consideration of the property. 2.3 The Appellant made submission alongwith relevant evidence in response to show cause notice issued U/s. 263 dt. 27.02.2014. The Hon'ble Commissioner erred in holding that Rs. 5,64,165/- is not an eligible deduction U/s. 48 of the Act ignoring submissions made materials on record.”
When the matter was called up for hearing, the ld.representative of the assessee sought permission to withdraw the appeal filed by the assessee. The Ld.DR did not raise any objection. Therefore, the permission sought for to withdraw the appeal is hereby granted and the appeal dismissed as withdrawn.
Order pronounced in the open court on 25th October, 2017.