ASSISTANT COMMISSIONER OF INCOME TAX, AAYAKAR BHAWAN vs. SHRI SUNNY CHANDRAKANT FUDHNAWALA, SURAT

आयकर अपीलीय अिधकरण, सुरत �ायपीठ, सुरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND Dr ARJUN LAL SAINI, ACCOUNTANT MEMBER आ.अ.सं./ITA No.707/SRT/2023 (AY 2014-15) (Hybrid Hearing) Asstt. Commissioner of Income- Shri Sunny Chandrakant tax, Circle-1(1)(1), Surat, Room Fudhnawala Vs No. 108, 1st Floor, Aaykar 47, Matawadi, Nr. Bhavani Bhavan, Majura Gate, Surat- Mata Temple, L.H. Road, 395001 Surat-395006 PAN No. AAHPF 6359 G अपीलाथ�/Appellant ��थ� /Respondent

िनधा�रती की ओर से /Assessee by Shri J Shah, A.R राज� की ओर से /Revenue by Shri Vinod Kumar, Sr-DR अपील पंजीकरण/Appeal instituted on 18.10.2023 सुनवाई की तारीख/Date of hearing 20.12.2023 उद्घोषणा की तारीख/Date of 20.12.2023 pronouncement Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by Revenue is directed against the order of National Faceless Appeal Centre, Delhi [for short to as “NFAC/Ld. CIT(A)”] dated 21.08.2023 for the assessment year 2014-15, which in turn arises out of assessment order passed by Asstt. Commissioner of Income-tax, Circle-3(3) Surat / Assessing Officer under section 143(3) r.w.s. 263 of Income Tax Act, 1961 (hereinafter referred to as ‘the Act’ for the sake of brevity) on 14.11.2019. The Revenue has raised following grounds of appeal: “1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the Assessing Officer of Rs.1,23,08,843/- made on account of disallowance of deduction claimed u/s 54F of the Act and income earned from the transaction from the land treated as business receipts of the assessee.

ITA No.707/SRT/2023 (A.Y 14-15) Sh. Sunny C. Fudhnwala 2. On the basis of the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the AO in this case merely relying on the decision of Hon’ble ITAT in this case against the order passed u/s 263 of the Act by Ld.PCIT, without appreciating the facts that the assessee has totally failed to establish his claim with regard to the deduction claimed u/s 54F of the Act is genuine legal, and proper by submitting proper submission before the AO during the assessment proceedings. 3. On the basis of the facts and circumstances of the case and in law, the Ld. CIT(A)has erred in by ignoring the fact that the decision of Hon’ble Apex Court in the case of CIT vs. Max India Ltd on which the Hon’ble Tribunal has placed reliance is not applicable in this case as the AO has not made proper enquiry with regards to the claim of the assessee of section 54F of the Act as the transferred property under question was treated as investment in stock-in-trade and not capital assets. 4. It is, therefore, prayed that the order the Ld. CIT(A) may kindly be set aside and that of the Assessing Officer be restored. 5. The appellant craves leave to add, alter, amend and/or withdraw any grounds of appeal either before or during the course of hearing of the appeal.” 2. Rival submissions of the parties heard and record perused. the Ld. Authorized Representative (Ld.AR) for the assessee submits that in case of assessee, initially assessment was completed on 23.12.2016 under section 143(3) for assessment year 2014-15. Subsequently, the assessment was revised by Ld. Principal Commissioner of Income Tax- 3, Surat (Ld.PCIT) by exercising his jurisdiction under section 263 vide order dated 29.03.2019. Against the order passed by Ld. PCIT dated 29.03.2019, the assessee filed appeal before Tribunal. Tribunal allowed the appeal of assessee vide order dated 22.02.2023 in ITA No.271/SRT/2019. In the meantime, the assessment officer passed order giving effect in terms of the direction of ld PCIT, which was the

ITA No.707/SRT/2023 (A.Y 14-15) Sh. Sunny C. Fudhnwala subject matter in the appeal before ld CIT(A). The Ld. CIT(A)/NFAC while granting relief to the assessee followed the order of Tribunal. The Ld. AR for the assessee submits that once the order passed under section 263 dated 29.03.2019 was quashed, consequently, the assessment order passed under section 143(3) r.w.s. 263 dated 14.11.2019 will not survive. The Ld. AR further submits that grounds of appeal raised by Revenue in the present appeal, thus covered in favour of assessee by the order of co-ordinate Bench of this Tribunal in ITA No.271/SRT/2019 dated 22.02.2023. 3. On the other hand, Ld. Senior Departmental Representative (Ld.Sr-DR) for the Revenue after hearing the submissions made by Ld.AR for the assessee and going through the grounds of appeal raised by the Revenue and the order of NFAC/Ld.CIT(A) supports that the order of Assessing Officer. 4. We have considered the rival submissions of both the parties and have gone through the order of lower authorities carefully. We have also gone through the order of this co-ordinate Bench of this Tribunal in ITA No.271/SRT/2019 dated 22.02.2023. We find that initially assessment for assessment year 2014-15 was completed under section 143(3) on 23.12.2016 and subsequently assessment was revised by Ld. PCIT by exercising his jurisdiction under section 263 vide order dated 29.03.2019 on the exemption under section 54F. We find that revision order passed under section 263 was quashed / set aside by co-ordinate Bench of this Tribunal on 22.02.2023 in ITA No.271/SRT/2019. We further find that in the meantime the Assessing Officer giving effect on 3

ITA No.707/SRT/2023 (A.Y 14-15) Sh. Sunny C. Fudhnwala 14.11.2019 under section 143(3) r.w.s. 263 of the Act. The NFAC/Ld.CIT(A) after considering the decision of Tribunal in quashing the revision proceeding granted relief to assessee. Therefore, we find that once the order passed under section 263 is quashed / set aside, the addition in the assessment passed in consequence of order under section 263 of the Act will not survive. Thus, the grounds of appeal raised by Revenue is dismissed. 5. In the result, appeal of the Revenue is dismissed. Order pronounced in the open court on 20/12/2023.

Sd/- Sd/- (Dr ARJUN LAL SAINI) (PAWAN SINGH) [लेखा सद�/ACCOUNTANT MEMBER] [�ाियक सद� JUDICIAL MEMBER] Surat, Dated: 20/12/2023 Dkp. Out Sourcing Sr.P.S Copy to: 1. Appellant- 2. Respondent- 3. CIT 4. DR 5. Guard File True copy/ // True Copy // Sr. Private Secretary /Private Secretary /Assistant Registrar, ITAT, Surat