P.Subba Lakshmi, Yanam V. THE ITO, Vijayawada

ITA 107/VIZ/2015

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0151 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 31-03-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: TH LUCAS PETER
• Keywords: Gift; Principle of natural justice; Bonafide belief; Source of fund; Question of law; Assessment record; Benefit of exemption
• Section: 143(3); 54B; 54F; 133(6); 148; 263; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , . . . . , $ $ $ $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.154/VIZ/2012 AND I.T.A.NO. 107/VIZ/2015 ( / ASSESSMENT YEAR : 2007-08) SMT. P. SUBBA LAKSHMI, 8-9-12, BALLAVARI STREET, YANAM. VS. ITO, WARD-2, KAKINADA. [ PAN :ATVPP 7893 G] ( & & & & / APPELLANT) ( '(& '(& '(& '(& / RESPONDENT ) & ) / APPELLANT BY : C. SUBRAHMANYAM AR '(& ) / RESPONDENT BY : TH. LUCAS PETER CIT (DR) ) - / DATE OF HEARING : 19/11/2015 ) - / DATE OF PRONOUNCEMENT : 23/12/ 2015 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AG AINST THE ORDER OF CIT, RAJAHMUNDRY UNDER SEC. 263 OF THE INCOME-TA X ACT, 1961, DATED 15/02/2012 AND THE ORDER OF CIT(A)-2, VISAKHAPATNAM , UNDER SEC. 250 OF THE ACT, DATED 19/12/2014 FOR THE A.Y. 2007-08. SINCE, THE ISSUES ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 2 INVOLVED IN THESE APPEALS ARE COMMON, THEY ARE CLUB BED, HEARD TOGETHER AND DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2 . BRIEF FACTS OF THE CASE, ARE THAT THE ASSESSEE IS AN INDIVIDUAL FILED HER RETURN OF INCOME FOR THE A.Y. 2007-08 ON 16/05/ 2008 DECLARING TOTAL INCOME OF RS. 2,89,990/-. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT, ACCORDINGLY, NOTICE U/S 143(2) DATED 9/ 9/2008 WAS ISSUED. IN RESPONSE TO NOTICES, THE ASSESSE AUTHORIZED REPR ESENTATIVE APPEARED FROM TIME TO TIME AND FURNISHED THE INFORMATION CAL LED FOR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT, THE ASSESSE HAS DECLARED LTCG OF RS. 2,89,990/- FROM TRANSFER O F IMMOVABLE PROPERTY, AFTER AVAILING EXEMPTION IN RESPECT OF RE INVESTMENT IN NEW ASSET. DURING THE ASSESSMENT PROCEEDINGS, TO VERIF Y THE CORRECTNESS OF INCOME DECLARED UNDER LTCG, THE A.O. OBTAINED INFOR MATION UNDER SEC. 133(6) FROM THE CONCERNED SUB REGISTRAR. THE A.O. A FTER VERIFIED THE DETAILS, COMPLETED THE ASSESSMENT UNDER SEC. 143(3) OF THE ACT, ON 15/12/2009 AND DETERMINED TOTAL INCOME OF RS.4,10,9 90/-, THEREBY MADE ADDITION OF RS. 1,21,000/- BEING DIFFERENCE BE TWEEN SALE CONSIDERATION DECLARED BY THE ASSESSEE AND THE ACTU AL SALE CONSIDERATION AS PER SALE DEED. ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 3 3. THE CIT, RAJAHMUNDRY ISSUED A SHOW-CAUSE NOTICE UN DER SEC. 263 OF THE ACT ON 21/10/2011 AND PROPOSED TO REVISE THE ASSESSMENT ORDER. THE CIT PROPOSED TO REVISE THE ASSESSMENT ORDER FOR THE REASON THAT ON EXAMINATION OF ASSESSMENT RECORD, IT WAS FOUND THAT THE ASSESSING OFFICER HAS ERRONEOUSLY ALLOWED DEDUCTION UNDER SEC . 54B & 54F OF THE ACT, WITHOUT EXAMINED THE ALLOWABILITY OF SUCH DEDU CTIONS. THEREFORE, ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE IN TERMS OF SEC. 263 OF THE ACT. THE CIT, IN THE SHOW-CAUSE NOTICE OBSERVE D THAT THE ASSESSEE HAS SOLD AGRICULTURAL LAND FOR A CONSIDERATION OF R S. 65,62,500/- TO M/S.RELIANCE INDUSTRIES LTD. AND CLAIMED EXEMPTION UNDER SEC. 54B FOR REINVESTMENT IN ANOTHER AGRICULTURAL LAND FOR AN AM OUNT OF RS.33,86,880/-. ON EXAMINATION OF THE SALE DEED FU RNISHED BY THE ASSESSEE, IT WAS NOTICED THAT THE ASSESSEE HAS PURC HASED THE LAND FOR A CONSIDERATION OF RS. 33,86,880/- INCLUDING REGISTRA TION CHARGES. THE SALE DEEDS WERE REGISTERED ON 10/04/2008, WHICH IS BEYON D THE DUE DATE OF FURNISHING THE RETURN UNDER SEC. 139(1) OF THE ACT. THE CIT FURTHER OBSERVED THAT AS PER THE SCHEME OF SEC. 54B & 54F O F THE ACT, THE ASSESSEE OUGHT TO HAVE DEPOSITED THE UNUTILIZED SAL E PROCEEDS IN CAPITAL GAIN DEPOSIT SCHEME AND FURNISH THE PROOF ALONG WI TH THE RETURN OF INCOME FILED UNDER SEC. 139(1), BUT FAILED TO DO SO . THE CIT FURTHER ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 4 OBSERVED THAT THE ASSESSEE HAS PURCHASED AGRICULTUR AL LANDS IN THE NAMES OF HER HUSBAND AND DAUGHTER AND CLAIMED EXEMP TION UNDER SEC. 54B OF THE ACT. BUT, TO CLAIM DEDUCTION UNDER SEC. 54B, THE ASSESSEE MUST INVEST THE SALE PROCEEDS FOR PURCHASE OF ANOTH ER AGRICULTURAL LAND IN HER OWN NAME. THE CIT FURTHER OBSERVED THAT THE ASSESSEE HAS FAILED TO PROVE THAT THE LAND SOLD BY HER IS USED FOR AGRI CULTURAL PURPOSE FOR AT LEAST 02 YEARS PRIOR TO THE DATE OF SALE. 4 . SIMILARLY, FROM THE ASSESSMENT RECORDS, THE CIT O BSERVED THAT THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SEC. 54F OF TH E ACT, FOR AN AMOUNT OF RS. 24,00,000/-, FOR INVESTMENT IN PURCHA SE OF NEW HOUSE PROPERTY, BUT THE ASSESSING OFFICER HAS FAILED TO V ERIFY THE CORRECTNESS OF THE CLAIM MADE BY THE ASSESSEE. THE CIT FURTHER OB SERVED THAT THE ASSESSEE HAS PURCHASED VACANT LAND AND CONSTRUCTED A RESIDENTIAL HOUSE AND SOUGHT EXEMPTION UNDER SEC. 54F OF THE ACT. BU T, THE SAID SITE WAS PURCHASED ON 25/04/2008 AND THEREFORE, THE INVESTME NT MADE IN RESIDENTIAL HOUSE PROPERTY WAS BEYOND THE DUE DATE SPECIFIED UNDER SEC. 54F OF THE ACT. THE ASSESSING OFFICER FAILED TO TA KE NOTE OF THIS FACT AND WITHOUT VERIFICATION ALLOWED EXEMPTION UNDER SEC. 5 4F. WITH THESE OBSERVATIONS, THE CIT ISSUED A SHOW-CAUSE NOTICE AN D ASKED AS TO WHY THE ASSESSMENT ORDER DATED 15/12/2009 SHOULD NOT BE REVISED UNDER SEC. 263 OF THE ACT. ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 5 5. IN RESPONSE TO SHOW-CAUSE NOTICE, THE ASSESSEE FIL ED A WRITTEN SUBMISSION DATED 06/12/2011 AND CONTENDED THAT SHE HAS PURCHASED AGRICULTURAL LAND AND EXECUTED A SALE AGREEMENT ON 27/04/2007. THE ASSESSEE FURTHER SUBMITTED THAT SHE HAD PAID ADVANC E OF RS. 18,00,000/- AND TAKEN POSSESSION OF THE PROPERTY ON THE DATE OF SALE AGREEMENT. SINCE, SHE HAD PAID THE MAJORITY CONSIDERATION AND ALSO TAKEN THE POSSESSION OF THE PROPERTY BEFORE THE DUE DATE SPEC IFIED UNDER SEC. 139, SHE IS ELIGIBLE FOR EXEMPTION UNDER SEC. 54B OF THE ACT. THE ASSESSEE FURTHER SUBMITTED THAT AS FAR AS PURCHASE OF AGRICU LTURAL LAND IN THE NAMES OF HER HUSBAND AND DAUGHTER, SHE CLAIMED THAT SHE HAD PURCHASED THE AGRICULTURAL LANDS OUT OF THE SALE PR OCEEDS OF LAND SOLD BY HER. SHE FURTHER SUBMITTED THAT SHE WAS ON THE BONAFIDE BELIEF THAT EVEN IF SHE PURCHASED LANDS IN HER SPOUSE AND DAUGH TERS NAME, SHE IS ELIGIBLE FOR CLAIMING EXEMPTION UNDER SEC. 54B OF T HE ACT. HOWEVER, ON COMING TO KNOW THE FACT THAT THE PROPERTY SHOULD BE PURCHASED IN HER NAME TO CLAIM EXEMPTION UNDER SEC. 54B, SHE HAS TRA NSFERRED THE LANDS TO HER NAME BY GIFT DEED DATED 07/05/2008. SINCE, THE LANDS ARE TRANSFERRED IN HER NAME WELL BEFORE THE DUE DATE OF FILING THE RETURN UNDER SEC. 139(4) OF THE ACT, SHE IS ELIGIBLE FOR C LAIMING EXEMPTION UNDER SEC. 54B OF THE ACT. ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 6 6 . HAVING EXPLAINED THE MERITS OF THE CASE, THE ASSE SSEE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS EXAMINED T HE ABOVE DETAILS DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ALL OWED THE CLAIM. THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSING O FFICER HAS ISSUED DETAILED QUESTIONNAIRE DATED 21/08/2009 AND 10/11/2 009, WHEREIN HE SOUGHT COMPLETE DETAILS ABOUT THE EXEMPTION CLAIMED UNDER SEC. 54B & 54F OF THE ACT. IN RESPONSE TO NOTICE, THE ASSESSE E HAS SUBMITTED ALL THE DETAILS. THE ASSESSING OFFICER AFTER VERIFICAT ION OF THE DETAILS SUBMITTED BY THE ASSESSEE AND ALSO DUE APPLICATION OF MIND ALLOWED THE EXEMPTION BEFORE COMPLETING THE ASSESSMENT. THEREF ORE, CIT WAS NOT CORRECT IN STATING THAT THE ASSESSING OFFICER HAS N OT APPLIED HIS MIND BEFORE ALLOWING DEDUCTION UNDER SEC. 54B & 54F OF T HE ACT. HOWEVER, THE CIT AFTER CONSIDERING THE EXPLANATION SUBMITTED BY THE ASSESSEE, HELD THAT THE ASSESSING OFFICER DID NOT VERIFY THE ISSUES AT THE TIME OF ASSESSMENT, THEREFORE, THE ASSESSMENT ORDER DATED 1 5/12/2009 IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTER EST OF THE REVENUE IN TERMS OF SEC. 263 OF THE ACT. HENCE, SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE ASSESSING OFFICER TO PASS CONSEQUENTIA L ORDER WITHIN STIPULATED TIME AND DISALLOW THE EXEMPTION UNDER SE C. 54B & 54F OF THE ACT. AGGRIEVED BY THE CITS ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 7 7 . THE AUTHORIZED REPRESENTATIVE OF THE ASSESSE SUBM ITTED THAT THE ASSESSMENT ORDER IS NOT ERRONEOUS INSOFAR AS IT IS NOT PREJUDICIAL TO THE INTEREST OF THE REVENUE, AS THE ASSESSING OFFICER H AS MADE DETAILED ENQUIRIES REGARDING CLAIM OF EXEMPTION UNDER SEC. 5 4B & 54F OF THE ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE AU THORIZED REPRESENTATIVE OF THE ASSESSEE FURTHER SUBMITTED TH AT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HA S ISSUED A DETAILED QUESTIONNAIRE DATED 21/08/2009 AND 10/11/2009, WHER EIN HE SOUGHT ALL THE DETAILS ABOUT THE ISSUES RAISED BY THE CIT. THE ASSESSING OFFICER HAS EXAMINED THE NOOK AND CORNER OF THE ISSUES REGARDIN G THE EXEMPTION UNDER SEC. 54B & 54F OF THE ACT, WHICH IS EVIDENT F ROM THE ASSESSMENT ORDER. THE CIT WITHOUT POINTING OUT ANY ERROR IN T HE ASSESSMENT ORDER, DIRECTED THE ASSESSING OFFICER TO RE-EXAMINE THE IS SUES IN ORDER TO MAKE FURTHER ENQUIRY WHICH IS NOTHING, BUT REDOING THE A SSESSMENT ALREADY CONCLUDED BY THE ASSESSING OFFICER. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FURTHER SUBMITTED THAT THE CIT OUGHT T O HAVE APPRECIATED THE FACT THAT THE ASSESSING OFFICER HAS ALREADY EXA MINED ALL THE ISSUES RAISED BY HIM. AS REGARDS THE CLAIM OF EXEMPTION U NDER SEC. 54B IS CONCERNED, THE ASSESSEE HAS PURCHASED THE AGRICULTU RAL LAND BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME UNDER SEC. 139(4) OF THE ACT, THEREFORE, THE QUESTION OF DEPOSIT OF MONEY IN THE CAPITAL GAIN DEPOSIT ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 8 SCHEME DOES NOT ARISE. IT IS FURTHER SUBMITTED TH AT THE ASSESSEE HAS INVESTED SALE CONSIDERATION FOR PURCHASE OF AGRICUL TURAL LAND WELL BEFORE THE DUE DATE OF FILING OF RETURN UNDER SEC. 139(4) OF THE ACT, THEREFORE, THE PROVISIONS OF SEC. 54B OF THE ACT ARE COMPLIED WITH. 8 . THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FUR THER SUBMITTED THAT AS FAR AS SECOND OBSERVATION OF THE CIT. WITH REGARD TO AGRICULTURAL LANDS WERE PURCHASED IN THE NAMES OF HUSBAND AND DA UGHTER, IT WAS SUBMITTED THAT FROM THE SALE PROCEEDS OF AGRICULTUR AL LAND, THE ASSESSEE HAS PURCHASED AGRICULTURAL LAND IN THE NAME OF HER HUSBAND AND DAUGHTER. THOUGH THE PROPERTY IS REGISTERED IN THE NAME OF HER HUSBAND, IT WAS PURCHASED WITHIN THE DUE DATE OF FI LING OF THE RETURN UNDER SEC. 139 OF THE ACT, THEREFORE, THE ASSESSEE IS ENTITLED FOR CLAIM UNDER SEC. 54B OF THE ACT. THE AUTHORIZED REPRESEN TATIVE OF THE ASSESSEE FURTHER SUBMITTED THAT THOUGH, THE ACT DOE S NOT SPECIFY THE REQUIREMENT OF PURCHASE OF LAND IN ASSESSEES OWN N AME ITSELF, WITH ABUNDANT CAUTION, SHE GOT TRANSFERRED THE LANDS IN HER NAME VIDE GIFT DEED DATED 07/05/2008, WHICH IS ALSO MUCH BEFORE TH E DUE DATE OF FILING THE RETURN UNDER SEC. 139(4) OF THE ACT. THE ASSESS EE HAS PURCHASED THE LANDS OUT OF THE SALE PROCEEDS OF AGRICULTURAL LAND AND THE DETAILS OF WHICH WERE PRODUCED BEFORE THE ASSESSING OFFICER. THE ASSESSEE IS A HOUSE-WIFE, EXCEPT THE SOURCES OF INCOME FROM SALE OF AGRICULTURAL LAND, ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 9 SHE DID NOT HAVE ANY OTHER SOURCE OF INCOME TO SAY THAT SHE HAD PURCHASED THE AGRICULTURAL LAND FROM THE SOURCE OTH ER THAN THE SALE PROCEEDS OF AGRICULTURAL LAND. THE AUTHORIZED REPR ESENTATIVE OF THE ASSESSEE FURTHER SUBMITTED THAT AS REGARDS THE OBSE RVATION OF THE CIT WITH REGARD TO WHETHER LANDS ARE USED FOR AGRICULTU RAL PURPOSES ARE NOT BEFORE THE TWO YEARS FROM THE DATE OF SALE, IT WAS SUBMITTED THAT THE ASSESSEE IS BASICALLY A AGRICULTURIST AND SHE WAS P ERSONALLY CARRYING OUT THE AGRICULTURAL OPERATIONS RIGHT FROM THE BEGINNIN G. THEREFORE, CIT WAS NOT CORRECT IN COMING TO THE CONCLUSION THAT THE AS SESSEE HAS NOT PROVED THE FACT THAT LANDS WERE USED FOR AGRICULTURAL PURP OSES BEFORE THE DATE OF SALE. 9 . THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUB MITTED THAT AS REGARDS THE OTHER ISSUE RAISED BY THE CIT WITH REGA RD TO THE CLAIM OF DEDUCTION UNDER SEC. 54F OF THE ACT, THE CIT WAS OF THE OPINION THAT THE ASSESSEE HAS PURCHASED TWO VACANT SITES AND CLAIMED TO HAVE CONSTRUCTED A BUILDING ON THE VACANT SITE WITHOUT A NY EVIDENCE. THE CIT FURTHER OBSERVED THAT THE ASSESSEE HAS SPENT AN AMO UNT OF RS.1,50,000/- ON CONSTRUCTION OF A SHED, WHICH DOES NOT HAVE ANY BUILDING PLAN APPROVAL FROM THE MUNICIPAL AUTHORITI ES, THEREFORE, THE SAID CONSTRUCTION IN VACANT LAND CANNOT BE CONSTRUED AS CONSTRUCTION OF RESIDENTIAL HOUSE AS STIPULATED UNDER SEC. 54F OF T HE ACT. THE ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 10 AUTHORIZED REPRESENTATIVE FURTHER SUBMITTED THAT TH E ASSESSEE HAS PURCHASED A SITE ON 25/04/2008 AND CONSTRUCTED THE RESIDENTIAL HOUSE WHICH IS HAVING DOOR NUMBER ETC., WHICH IS EVIDENT AS PER THE CERTIFICATE ISSUED BY THE MUNICIPAL AUTHORITIES. THE INVESTMEN T TOWARDS PURCHASE OF SITE AND CONSTRUCTION OF BUILDING WERE MADE BEFO RE THE DUE DATE OF FILING OF THE RETURN UNDER SEC. 139 (4) OF THE ACT. THE REQUIREMENT OF THE ACT IS TO CONSTRUCT A HOUSE, WHICH MAY BE SMALL . THE ACT DOES NOT SPECIFY THE TYPE OF HOUSE, WHAT IS IMPORTANT IS, TH ERE SHOULD BE HOUSE AND WHICH SHOULD BE SUITABLE FOR LIVING. THEREFORE , REQUESTED TO SET ASIDE THE ORDER OF CIT. 10 . ON THE OTHER HAND, THE DEPARTMENTAL REPRESENTATIV E STRONGLY SUPPORTED THE ORDER OF THE CIT. THE DEPARTMENTAL R EPRESENTATIVE FURTHER SUBMITTED THAT THE CIT RIGHTLY ASSUMED HIS JURISDICTION TO REVISE THE ASSESSMENT ORDER, AS THE ASSESSING OFFICER HAS FAILED TO VERIFY THE CLAIM OF EXEMPTION UNDER SEC. 54B & 54F OF THE ACT. IN CASE, THE ASSESSEE IS NOT UTILIZED THE SALE PROCEEDS WITHIN T HE DUE DATE OF FURNISHING THE RETURN OF INCOME UNDER SEC. 139(1) O F THE ACT FOR PURCHASE OF ANOTHER AGRICULTURAL LAND OR CONSTRUCTE D A RESIDENTIAL HOUSE PROPERTY, THEN THE SALE CONSIDERATION SHOULD BE INV ESTED IN CAPITAL GAIN DEPOSIT SCHEME. BUT, IN THE PRESENT CASE IN OUR H AND, THE ASSESSEE HAS NEITHER INVESTED THE FULL VALUE OF CONSIDERATION FO R PURCHASE OF ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 11 AGRICULTURAL LAND OR FOR CONSTRUCTION OF HOUSE PROP ERTY, NOR DEPOSITED THE AMOUNT IN BANK ACCOUNT BEFORE DUE DATE OF FILING OF THE RETURN. THE ASSESSEE HAS NOT COMPLIED WITH THE PROVISIONS OF SE C. 54B & 54F OF THE ACT, HENCE, SHE IS NOT ELIGIBLE FOR EXEMPTIONS UNDE R THE RESPECTIVE SECTIONS. THE DEPARTMENTAL REPRESENTATIVE FURTHER ARGUED THAT TO CLAIM EXEMPTION UNDER SEC. 54B, THE ASSESSEE SHOULD INVES T THE SALE CONSIDERATION FOR PURCHASE OF ANOTHER AGRICULTURAL LAND IN HER NAME. BUT, IN THIS CASE, THE ASSESSEE HAS PURCHASED THE A GRICULTURAL LAND IN THE NAME OF HER HUSBAND AND DAUGHTER, THEREFORE, SHE IS NOT ELIGIBLE FOR EXEMPTION UNDER SEC. 54B OF THE ACT. THE DEPARTMEN TAL REPRESENTATIVE FURTHER ARGUED THAT AS FAR AS SEC. 54F IS CONCERNED , THE CONSTRUCTION OF RESIDENTIAL HOUSE MEANS, THE CONSTRUCTION OF DWELLI NG UNIT, BUT IN THIS CASE THE ASSESSEE HAS PUT UP SMALL SHED WITH A COST OF RS.1,50,000/-. THEREFORE, THIS CANNOT BE CONSIDERED AS RESIDENTIAL HOUSE WITHIN THE MEANING OF SEC. 54F OF THE ACT. HENCE, REQUESTED TO UPHOLD THE CIT ORDER. 11 . WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE CIT ASSUMED JURISDICTION FOR THE REASONS THAT THE A SSESSING OFFICER HAS NOT CONDUCTED PROPERTY ENQUIRY BEFORE PASSING THE A SSESSMENT ORDER, THEREBY HIS ORDER IS ERRONEOUS INSOFAR AS IT IS PRE JUDICIAL TO THE INTEREST ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 12 OF THE REVENUE. THE CIT HAS REVISED THE ASSESSMENT ORDER ON THE SOLE GROUND THAT THE ASSESSING OFFICER ERRONEOUSLY ALLOW ED EXEMPTION UNDER SEC. 54B AND 54F OF THE ACT. ON PERUSAL OF THE SHO W-CAUSE NOTICE ISSUED BY THE CIT, THE ASSESSMENT ORDER AND THE PAP ER BOOK FILED BY THE ASSESSEE, WE NOTICED THAT THE TWO ISSUES QUESTIONED BY THE CIT IN THE PROCEEDINGS WERE ALREADY EXAMINED BY THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS. THE AUTHORIZED REPRESENTAT IVE OF THE ASSESSEE FILED A PAPER BOOK CONTAINING THE DETAILS OF NOTICE ISSUED BY THE ASSESSING OFFICER ALONG WITH THE REPLY FILED BY THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS. ON PERUSAL OF THE RECOR DS, WE NOTICED THAT THE ASSESSING OFFICER HAS ISSUED TWO QUESTIONNAIRE DATED 21/08/2009 AND 11/10/2009, WHEREIN HE ENQUIRED ABOUT EXEMPTION CLAIMED UNDER SEC. 54B & 54F OF THE ACT. THEREFORE, CIT WAS NOT CORRECT IN COMING TO THE CONCLUSION THAT THE ASSESSING OFFICER DID NOT C ONDUCT ANY ENQUIRY AND NOT APPLIED HIS MIND BEFORE ALLOWING DEDUCTION UNDER SEC. 54B & 54F OF THE ACT. 12 . THE CIT ASSUMED THE JURISDICTION TO REVISE THE AS SESSMENT ORDER ON THE GROUND THAT THERE IS A LACK OF ENQUIRY ON TH E PART OF THE ASSESSING OFFICER IN EXAMINING THE ISSUES RELATING TO EXEMPTION UNDER SEC. 54B & 54F OF THE ACT. AS REGARDS THE EXEMPTIO N UNDER SEC. 54B IS CONCERNED, THE ASSESSEES CONTENTION IS THAT SHE HA D INVESTED THE SALE ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 13 CONSIDERATION FOR PURCHASE OF AGRICULTURAL LAND WIT HIN THE DUE DATE SPECIFIED UNDER SEC. 139(4) OF THE ACT. THOUGH, TWO LANDS WERE PURCHASED IN HER HUSBAND AND DAUGHTERS NAME, LATER THE LANDS WERE TRANSFERRED IN HER NAME BEFORE THE DUE DATE SPECIFI ED IN SEC. 139(4) OF THE ACT. ON EXAMINATION OF THE DETAILS FURNISHED B Y THE ASSESSEE, WE NOTICED THAT THE ASSESSEE HAS PURCHASED AGRICULTURA L LAND IN HER OWN NAME AND ALSO IN THE NAME OF HER HUSBAND AND DAUGHT ER. FROM THE SALE DEEDS FURNISHED BY THE ASSESSEE, IT WAS NOTICED THA T ALL THE SALE DEEDS WERE REGISTERED BEFORE THE DUE DATE OF FILING THE R ETURN UNDER SEC. 139(4) OF THE ACT. THERE IS NO DISPUTE WITH REGARD TO REINVESTMENTS IN PURCHASE OF LANDS. THE QUESTION BEFORE US IS WHETHE R THE RETURN FILED UNDER SEC. 139(4) OF THE ACT IS EQUIVALENT TO THE R ETURN FILED UNDER SEC. 139(1) OF THE ACT AND THE INVESTMENTS MADE IS IN AC CORDANCE WITH THE PROVISIONS OF SEC. 54B OF THE ACT. IT IS WELL SETT LED PROPOSITION OF LAW THAT RETURN FILED UNDER SEC. 139(4) OF THE ACT IS A LSO A RETURN FILED UNDER SEC. 139(1) OF THE ACT. THE JUDICIAL FORUMS IN THI S COUNTRY HAS CONSISTENTLY HELD THAT THE DEDUCTION UNDER SEC. 54B & 54F ARE BENEFICIAL PROVISIONS AND THE SAME SHOULD BE LIBERALLY INTERPR ETED AS INTENDED BY THE STATUE, WHILE ALLOWING THE EXEMPTION. THEREFOR E, IN OUR CONSIDERED OPINION, THE CIT WAS NOT CORRECT IN COMING TO THE C ONCLUSION THAT NEITHER THE ASSESSEE HAS INVESTED THE SALE CONSIDERATION IN PURCHASE OF ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 14 AGRICULTURAL LAND NOR DEPOSITED THE SALE CONSIDERAT ION IN THE CAPITAL GAIN DEPOSIT SCHEME WITHIN THE DUE DATE UNDER SEC. 139( 1), THEREBY, ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION UNDER SEC. 5 4B OF THE ACT. 13 . THE SECOND ISSUE RAISED BY THE CIT, IS THAT THE A SSESSEE HAS CLAIMED EXEMPTION UNDER SEC. 54F OF THE ACT, FOR CO NSTRUCTION OF SHED IN A VACANT LAND, THEREFORE IT DOES NOT AMOUNTS TO CON STRUCTION OF RESIDENTIAL HOUSE TO CLAIM THE BENEFIT OF EXEMPTION . THE ASSESSEE CONTENDED THAT SHE HAS PURCHASED A VACANT LAND AND PUT UP A CONSTRUCTION IN THE SAID LAND. THE ISSUE BEFORE US , IS WHETHER RESIDENTIAL HOUSE MEANS RESIDENTIAL HOUSE AS UNDERSTAND BY THE CIT OR A RESIDENTIAL HOUSE AS PER LAW. THE TERM RESIDENTIAL HOUSE HAS NO T BEEN DEFINED UNDER THE ACT, HOWEVER, ANY STRUCTURE CONSTRUCTED I N A LIVABLE CONDITION WOULD SATISFY THE MEANING OF THE HOUSE PROPERTY. I N THE PRESENT CASE, THE ASSESSEE HAS CONSTRUCTED A HOUSE WITH WATER AND ELECTRICITY CONNECTION. THOUGH THE HOUSE IS A SMALL, THE MUNICI PAL AUTHORITIES HAVE ALLOTTED DOOR NUMBER, WHICH MEANS THE HOUSE IS IN A LIVING CONDITION. THE ASSESSEE CONTENTION IS THAT SHE IS A SMALL AGRI CULTURIST AND ECONOMICALLY POOR AND HER HUSBAND IS WORKING FOR A MEAGER SALARY, THEREFORE SHE CANNOT CONSTRUCT A BIG RESIDENTIAL HO USE AS INTENDED BY THE CIT. WE FIND FORCE IN THE ARGUMENTS OF THE ASSE SSE THAT TO CLAIM EXEMPTION UNDER SEC. 54F OF THE ACT, WHAT IS TO BE SEEN IS WHETHER ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 15 THERE IS A HOUSE AND WHICH IS IN A LIVABLE CONDITIO N ARE NOT. THE ASSESSEE HAS MADE OUT HER CASE, THAT SHE HAS CONSTR UCTED A HOUSE BY FURNISHING THE RELEVANT DOCUMENTS. THEREFORE, THE CIT WAS NOT CORRECT IN COMING TO THE CONCLUSION THAT THE ASSESSEE HAS N OT CONSTRUCTED A HOUSE, THEREBY, SHE IS NOT ELIGIBLE FOR EXEMPTION U NDER SEC. 54F OF THE ACT 14 . THE CIT HAS A POWER TO REVISE THE ASSESSMENT ORDE R BY INVOKING THE PROVISIONS OF SEC. 263 OF THE ACT. BUT, TO INV OKE SECTION 263, THE TWIN CONDITIONS MUST BE SATISFIED I.E. THE ASSESSME NT ORDER IS ERRONEOUS AND FURTHER IT MUST BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. UNLESS BOTH THE CONDITIONS ARE SATISFIED, THE CIT CANNOT A SSUME THE JURISDICTION UNDER SEC. 263 OF THE ACT. IT IS NOT NECESSARY THAT EVERY ORDER WHICH IS ERRONEOUS MAY ALSO PREJUDICIAL TO THE INTEREST OF T HE REVENUE OR VIS-A- VIS. UNLESS THE ASSESSING OFFICERS ORDER IS NOT E RRONEOUS, NO ACTION CAN BE TAKEN BY THE CIT UNDER SEC. 263 OF THE ACT, THIS IS BECAUSE THE TWIN CONDITIONS I.E. THE ORDER IS ERRONEOUS AND THE SAME IS ALSO PREJUDICIAL TO THE INTEREST OF THE REVENUE ARE CO-EXIST. IN THE P RESENT CASE IN OUR HAND, THE ASSESSING OFFICER HAS CONDUCTED A DETAILE D ENQUIRY AND ALSO EXAMINED THE POINTS ON WHICH THE CIT WANTS FURTHER VERIFICATION. THE ASSESSING OFFICER, AFTER VERIFICATION OF ALL THE DE TAILS FURNISHED BY THE ASSESSEE ALLOWED THE EXEMPTION UNDER SEC. 54B & 54F OF THE ACT. THE ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 16 CONTENTION OF THE CIT WAS THAT THE ASSESSING OFFICE R HAS NOT CONDUCTED PROPER ENQUIRY AND ALSO NOT APPLIED HIS MIND BEFORE ALLOWING THE EXEMPTION. WE DO NOT AGREE WITH THE STAND TAKEN BY THE CIT, FOR THE REASON THAT THERE IS A DISTINCTION BETWEEN LACK OF ENQUIRY AND INADEQUATE ENQUIRY. IF THERE IS AN INADEQUATE ENQU IRY THAT WOULD NOT ITSELF GIVE OCCASION TO THE CIT TO ASSUME JURISDICT ION UNDER SEC. 263 OF THE ACT, MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER. IN THE PRESENT CASE, THOUGH THE ASSESSMENT ORDER BRIEF AND CRYPTIC, THE ASSESSING OFFICER HAS PASSED A REMARK IN THE ASSESS MENT ORDER ON LTCG, ON WHICH THE CIT WANTS FURTHER VERIFICATION. ACCOR DING TO CIT, THE ASSESSING OFFICER HAS CONDUCTED INADEQUATE ENQUIRY, THEREFORE, HE WANTED FURTHER ENQUIRY AND THIS FACT WAS NOT DISPUT ED BY THE REVENUE. THE CIT CANNOT INITIATE REVISIONARY PROCEEDINGS WIT H A VIEW TO CONDUCT FURTHER ENQUIRY IN THE MATTERS WHICH ARE EXAMINED B Y THE ASSESSING OFFICER. THE DEPARTMENT CANNOT DO FRESH ASSESSMENT IN THE GUISE OF REVISION ON THE MATTERS WHICH ARE EXAMINED AND CONC LUDED BY THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS. 15 . THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ARG UED THAT THE ASSESSING OFFICER HAS EXAMINED ALL THE ISSUES, WHIC H LEAD TO REVISION OF ASSESSMENT ORDER UNDER SEC. 263 OF THE ACT. WE HAV E OBSERVED THAT THE ASSESSING OFFICER VIDE HIS QUESTIONNAIRE DATED 10/0 8/2009 MADE ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 17 ELABORATE ENQUIRY INTO THE ISSUES RELATING TO DEDUC TION UNDER SEC. 54B & 54F OF THE ACT. THE COPIES OF THE QUESTIONNAIRE AN D REPLY FURNISHED BY THE ASSESSEE ARE PLACED BEFORE US. ON PERUSAL OF T HE DETAILS PLACED BEFORE US, WE ARE OF THE OPINION THAT THE ASSESSING OFFICER HAS MADE DETAILED ENQUIRY ABOUT ALL THE ISSUES AND ALLOWED T HE EXEMPTION. IT IS A WELL SETTLED POSITION OF LAW THAT WRITING AN ORDER IN DETAIL MAY BE LEGAL REQUIREMENT, BUT THE ORDER NOT FULFILLING THIS REQU IREMENT CANNOT BE SAID TO BE ERRONEOUS AND PREJUDICIAL. IN OUR OPINION, TH E A.O. VERIFIED THE DETAILS AND APPLIED HIS MIND BEFORE ALLOWING THE EX EMPTION UNDER SEC. 54B AND 54F OF THE ACT. THE CIT CANNOT ASSUME JURIS DICTION UNDER SEC. 263, ON THE SAME ISSUES WITH DIFFERENT OPINION. 16 . THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE REL IED UPON THE HON'BLE ANDHRA PRADESH HIGH COURTS JUDGMENT IN THE CASE OF CIT VS. B.V.R. GLUCOSE PRODUCTS LTD. (250 ITR 512), WHEREIN THE HON'BLE ANDHRA PRADESH HIGH COURT HELD THAT THE RETURN FILED UNDER SUB-SEC. (4) OF SEC. 139 HAS TO BE TREATED AS RETURN WITHIN THE TIME CON TEMPLATED UNDER SEC. 139(1) OF THE ACT, WITH ALL ITS CONSEQUENCES. THE RELEVANT PORTION IS REPRODUCED HEREINUNDER:- THE RETURN FILED UNDER SUB-S. (4) HAS TO BE TREATED AS A RETURN WITHIN THE TIME CONTEMPLATED UNDER S. 139(1), WITH ALL ITS CONSEQUENCES. SUB-S. (4) HAS TO BE READ AS PROVISO TO SUB-S. (1), IN WHICF CASE A RETURN FILED UNDER SUB-S. (4) HAS TO BE TREATED AS A RETURN UNDER SUB-S. (1) AND IN WHICH C ASE THE LOSS ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 18 DETERMINED IS TO BE ALLOWED TO BE CARRIED FORWARD I N TERMS OF SUB-S. (3) OF S. 139. APAN FROM THE ABOVE, EVEN S. 80 WHICH PROVIDES FOR THE SUBMISSION OF RETURNS OF LOSS, CON TEMPLATES DETERMINATION OF THE LOSS IN PURSUANCE OF A RETURN FILED UNDER S. 139 AND NOT UNDER SUB-SS. (1) O, (2) OF S. 139. THEREFORE, IT CAN BE SAFELY INFERRED THAT THE RETURN CONTEMPLATED UNDER S. 80 INCLUDES A RETURN FILED UNDER SUB-S. (4) AND IF SO INTERPRETED, THE ASSESSEE-COMPANY IS ENTITLED TO THE BENEFIT OF DETERMINATION OF THE LOSS AND CARRY FORWARD TO THE SUBSEQUENT ASSESSMENT YEARS.CIT VS. KULU VALLEY TRANSPORT CO. (P) LTD. (1970) 77 ITR 518 (SC) : TC 9R.269 FOLLOWED. ADMITTEDLY, THE ASSESSEE-COMPANY HAS GOT TIME TILL 31 ST MARCH 1986, FOR FILING OF A RETURN IN TERMS OF S. 139(4). BUT, BEFORE THE EXPIRY OF THE SAID TIME, IF THE REVENUE ISSUES A NOTICE UNDER S. 148 WHICH MAKES THE ASSESSEE TO FILE A RET URN, THE SAME DOES NOT DENY OR DEPRIVE THE STATUTORY RIGHT U NDER WHICH THE ASSESSEE-COMPANY CAN FILE A RETURN WITHIN THE T IME PROVIDED. IT IS NOT THE CASE OF THE REVENUE THAT TH E RETURN IN RESPONSE TO THE NOTICE UNDER S. 148 WAS FILED AFTER THE EXPIRY OF THE PERIOD PROVIDED UNDER S. 139(4). IF THE CONTENT ION OF THE REVENUE IS ACCEPTED, IT WOULD LEAD TO ANOMALOUS RES ULTS AND THEREBY DISCRIMINATING THE ASSESSEE'S AND AFFECTING THEIR STATUTORY RIGHTS THEY ARE PROVIDED. THE RETURN WAS ADMITTEDLY FILED BEFORE THE EXPIRY OF THE TIME PROVIDED UNDER 139 (4). THEREFORE, THE SAME HAS TO BE TREATED AS A RETURN CONTEMPLATED UNDER THE SAID SECTION, EVEN THOUGH TH E SAME WAS FILED IN RESPONSE TO A NOTICE UNDER S. 148. THE ASSESSEE IS ENTITLED TO THE BENEFIT OF THE LOSS TO BE DETERMINE D AND CARRY FORWARD FOR SETTING OFF AGAINST THE INCOME OF THE S UBSEQUENT YEARS.CO-OPERATIVE MARKETING SOCIETY LTD. VS. CIT (1983) 34 CTR (MP) 290 : (1983) 143 ITR 99 (MP) : TC 9R.302 RELIED ON; KOPPIND (P) LTD. VS. CIT (1994) 120 CTR (CAL) 60 : (1994) 207 ITR 228 (CAL) : TC 46R.389 DISTINGUISHED. 17. THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF FATHIMA BAI VS. ITO [(2009) 32 DTR 243], UNDER SIMILAR CIRCUMSTANCES HELD THE ISSUE IN FAVOUR OF THE ASSESSEE AS UNDER:- ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 19 SEC. 54(2) DECLARES THAT WITHIN ONE YEAR FROM THE DATE OF TRANSFER IF THE CAPITAL GAIN IS NOT INVESTED IN PUR CHASE OF BUILDING, THE ASSESSEE SHOULD DEPOSIT THE AMOUNT IN THE 'CAPITAL GAIN ACCOUNT SCHEME' OR ELSE THE ASSESSEE SHOULD INVEST THE CAPITAL GAINS BEFORE FILING OF RETURN WI THIN THE PERMITTED PERIOD UNDER S. 139, IN WHICH EVENT, THE ASSESSEE WILL NOT BE LIABLE TO PAY CAPITAL GAIN TAX. IN THE INSTANT CASE, THE DUE DATE FOR FILING OF RETURN IS 30TH JULY, 198 8. UNDER S. 139(4) THE ASSESSEE WAS ENTITLED TO FILE RETURN IN THE EXTENDED TIME, WHICH IS WITHIN 31ST MARCH, 1990. THE ASSESSE E DID NOT FILE THE RETURN WITHIN THE EXTENDED DUE DATE, BUT F ILED THE RETURN ON 27TH FEB., 2000. HOWEVER, THE ASSESSEE HA D UTILIZED THE ENTIRE CAPITAL GAINS BY PURCHASE OF A HOUSE PRO PERTY WITHIN THE STIPULATED PERIOD OF S. 54(2) I.E., BEFORE THE EXTE NDED DUE DATE FOR RETURN UNDER S. 139. THE ASSESSEE TECHNICALLY M AY HAVE DEFAULTED IN NOT FILING THE RETURN UNDER S. 139(4). BUT, HOWEVER, UTILIZED THE CAPITAL GAINS FOR PURCHASE OF PROPERTY BEFORE THE EXTENDED DUE DATE UNDER S. 139(4). THE CONTENTION OF THE REVENUE THAT THE DEPOSIT IN THE SCHEME SHOULD HAVE BEEN MADE BEFORE THE INITIAL DUE DATE AND NOT THE EXTENDED DU E DATE IS AN UNTENABLE CONTENTION CIT VS. RAJESH KUMAR JALAN ( 2006) 206 CTR (GAU) 361 : (2006) 286 ITR 274 (GAU) CONCURRED WITH. 18 . THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CA SE OF CIT VS. GURNAM SINGH (2010) 327 ITR 278, UNDER SIMILAR CIRCUMSTANCES HELD AS UNDER:- UNDISPUTEDLY, IN THIS CASE THE ASSESSEE HAD SOLD T HE AGRICULTURAL LAND WHICH WAS BEING USED BY HIM FOR AGRICULTURAL P URPOSES. OUT OF SALE PROCEEDS OF THE SAID SALE, THE ASSESSEE HAS PU RCHASED OTHER PIECE OF LAND (LAND IN QUESTION) IN HIS NAME AND IN THE NAME OF HIS ONLY SON, WHO WAS BACHELOR AND DEPENDENT UPON HIM, FOR BEING USED FOR AGRICULTURAL PURPOSES WITHIN THE STIPULATE D TIME. FURTHER, IT IS NOT THE CASE OF THE REVENUE THAT FROM THE SALE P ROCEEDS OF THE AGRICULTURAL LAND EARLIER OWNED BY THE ASSESSEE, TH E LAND IN QUESTION WAS PURCHASED FOR ANY OTHER PURPOSE THAN T HE AGRICULTURAL PURPOSE. UNDISPUTEDLY, THE PURCHASED L AND IS BEING USED BY THE ASSESSEE ONLY FOR AGRICULTURAL PURPOSE AND MERELY ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 20 BECAUSE IN THE SALE DEED HIS ONLY SON WAS ALSO SHOW N AS CO- OWNER, THE TRIBUNAL HAS RIGHTLY COME TO THE CONCLUS ION THAT IT DOES NOT MAKE ANY DIFFERENCE BECAUSE THE PURCHASED LAND IS BEING USED BY THE ASSESSEE FOR AGRICULTURAL PURPOSE S. IT IS NOT THE CASE OF THE REVENUE THAT THE SAID LAND IS BEING USE D EXCLUSIVELY BY HIS SON. A PURE FINDING OF FACT HAS BEEN RECORDED B Y THE TRIBUNAL WHICH DOES NOT REQUIRE ANY INTERFERENCE IN THIS APP EAL. NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS APP EAL. 19. THE ITAT, DELHI E BENCH IN THE CASE OF AMIT GUPTA VS. DCIT (2006) 6 SOT 403, UNDER SIMILAR CIRCUMSTANCES HELD AS UNDER:- THE REQUIREMENT OF LAW IS THAT THE PROPERTY SHOULD BE A RESIDENTIAL HOUSE. THE EXPRESSION RESIDENTIAL HOUSE HAS NOT BEEN DEFINED IN THE ACT. THE POPULAR MEANING OF THE WORD IS A PLACE OR BUILDING USED FOR HABITATION OF PEOPLE. IT IS USED IN CONTRADISTINCTION TO A PLACE WHICH IS USED FOR THE PURPOSE OF BUSINESS, OFFICE, SHOP, ETC., IT IS NOT NECESSARY T HAT A PERSON SHOULD RESIDE IN THE HOUSE TO CALL IT A RESIDENTIAL HOUSE. IF IT IS CAPABLE OF BEING USED FOR THE PURPOSE OF RESIDENCE THEN THE REQUIREMENT OF SECTION IS SATISFIED. THE BASEMENT W AS CAPABLE OF BEING USED AS RESIDENCE. THE FACT THAT THE ASSESSEE DID NOT ACTUALLY USE THE SAME FOR HIS RESIDENCE WILL NOT DI SENTITLE HIM TO THE CLAIM OF EXEMPTION UNDER S. 54F. ON THE FACTS A ND THE CIRCUMSTANCES OF THE CASE, THE EXEMPTION UNDER S. 5 4F DESERVES TO BE ALLOWED.ADDL. CIT VS. VIDYA PRAKASH TALWAR (198 1) 25 CTR (DEL) 220 (1981) 132 ITR 661 (DEL), SMT PUSHPALATA KANODIA VS. WTO (2005) 93 TT) (HYD) 1045 (2005) 92 LTD 500 (HYD ), CIT VS. PURSHOTTAM DASS (2000) 163 CTR (DEL) 182 : (2001) 2 47 ITR 516 (DEL), DR. A.S. ATWAL VS. CIT (2005) 195 CTR (P &H) 353 : (2005) 277 ITR 462 (P&H) AND GLOBE THEATRES LTD. VS . KHAN SAHEB ABDUL GANI AIR 1956 MYS 57 DISTINGUISHED; SHY AM SUNDER MUKHIJA VS. IT O (1991) 38 ITD 125 (JP) APPL IED. 20. THE HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT (2000) 243 ITR 83, WHILE DEALING WITH THE ISSUE OF REVISION UNDER SEC. 263 HELD AS UNDER:- ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 21 A BARE READING OF PROVISIONS OF S. 263 MAKES IT CL EAR THAT THE PREREQUISITE TO EXERCISE OF JURISDICTION BY THE CIT SUO MOTU UNDER IT, IS THAT THE ORDER OF THE ITO IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE CI T HAS TO BE SATISFIED OF TWIN CONDITIONS, NAMELY, (I) THE ORDER OF THE AO SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS P REJUDICIAL TO THE INTERESTS OF THE REVENUE. I ONE OF THEM IS ABSENTI F THE ORDER OF THE ITO IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IT IS NOT ERRONEOUS BUT IS PREJUDICIAL TO THE REVENUEREC OURSE CANNOT BE HAD TO S. 263(1). THERE CAN BE NO DOUBT T HAT THE PROVISION CANNOT BE INVOKED TO CORRECT EACH AND EVE RY TYPE OF MISTAKE AN ERROR COMMITTED BY THE AO; IT IS ONLY WH EN AN ORDER IS ERRONEOUS THAT THE SECTION WILL BE ATTRACTED, AN IN CORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. IN TH E SAME CATEGORY FALL ORDERS PASSED WITHOUT APPLYING THE PR INCIPLES A NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND. THE PHRASE 'PREJUDICIAL TO THE INTERESTS OF THE REVENUE' IS NO T AN EXPRESSION OF ART AND IS NOT DEFINED IN THE ACT. UN DERSTOOD IN ITS ORDINARY MEANING IT IS OF WIDE IMPORT AND IS NO T CONFINED TO LOSS OF TAX. THE SCHEME OF THE ACT IS TO LEVY AND C OLLECT TAX IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND THIS TASK IS ENTRUSTED TO THE REVENUE. I DUE TO AN ERRONEOUS ORDER OF THE ITO, THE REVENUE IS LOSING TAX LAWFULLY PAYABLE BY A PERSON, IT WILL CERTAINLY BE PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE PHRASE 'PREJUDICIAL TO THE INTERESTS 04 THE REVENUE' HAS T O BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE A O. EVERY LOSS A REVENUE AS A CONSEQUENCE OF AN ORDER OF AO CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, FOR EXAMPLE, WHEN AN ITO ADOPTED ONE OF THE COURSES PERMISSIBLE IN LA W AND IT HAS RESULTED IN LOSS OF REVENUE; OR WHERE TWO VIEWS ARE POSSIBLE AND THE ITO HAS TAKEN ONE VIEW WITH WHICH THE CIT D OES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER P REJUDICIAL TO THE INTEREST! OF THE REVENUE UNLESS THE VIEW TAKEN BY T HE ITO IS UNSUSTAINABLE IN LAW .DAWJEE DADABHOY & CO, VS. S. P. JAIN & ANR. (1957) 31 ITR 872 (CAL) : TC 57R.129, CIT VS. T. NARAYANA PAI (1975) 98 ITA 422 (KAR) TC 57R.185, CIT VS. GAB RIEL INDIA LTD. (1993) 114 CTR (BORN) 81 : (1993) 203 ITR 10! (BORN) : TC 57R.213 AND CIT VS. SMT. MINALBEN S. PARIKH (199 5) 127 CTR (GUJ) 333: (1995) 21! ITR 81 (GUJ) : TC 57R.312 APPROVED; VENKATAKRISHNA RICE CO. VS. CIT (1987) 62 CTR (MAD) 152. (1987) 163 ITR 129 (MAD) : TC 57R.303 ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 22 DISAPPROVED. (PARAS 5 TO 7) IT APPEARS THAT THE RESOLUTION PASSED BY THE BOARD OF THE APPELLANT-COMPANY WAS NOT PLACED BEFORE THE AO. THU S, THERE WAS NO MATERIAL TO SUPPORT THE CLAIM OF THE APPELLA NT THAT THE AMOUNT IN QUESTION REPRESENTED COMPENSATION FOR LOS S OF AGRICULTURAL INCOME. HE ACCEPTED THE ENTRY IN THE S TATEMENT OF THE ACCOUNT FILED BY THE APPELLANT IN THE ABSENCE O F ANY SUPPORTING MATERIAL AND WITHOUT MAKING ANY INQUIRY. ON THESE FACTS THE CONCLUSION THAT THE ORDER OF THE ITO WAS ERRONEOUS IS IRRESISTIBLE. THEREFORE, THE HIGH COURT HAS RIGHTLY HELD THAT THE EXERCISE OF THE JURISDICTION BY THE CIT UNDER S. 26 3(1) WAS JUSTIFIED.MALABAR INDUSTRIAL CO. LTD. VS. CIT (1991) 100 CTR (KER) 27. (1992) 198 ITR 611 (KER) TC 57R.321 AFFIRMED. (PARA 8) 21. AN IDENTICAL ISSUE CAME UP FOR CONSIDERATION BEFORE THE COORDINATE BENCH OF THIS TRIBUNAL, IN THE CASE OF SHRI SAI CON TRACTORS VS. ITO WARD- 1 IN I.T.A.NO. 109/VIZ/2012, WHEREIN THE TRIBUNAL A FTER CONSIDERING THE RATIO LAID DOWN BY THE HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF SPECTRA SHARES AND SCRIPS PVT LTD VS. CIT, (2013) 3 54 ITR 35(AP) AND THE HON'BLE DELHI HIGH COURTS JUDGMENT IN THE CASE OF CIT VS. SUNBEAM AUTO LTD (2011) 332 ITR 167 (DEL), HELD THAT ONCE T HE ASSESSING OFFICER EXAMINED THE ISSUES, THE CIT CANNOT ASSUME THE JURI SDICTION UNDER SEC. 263, ON THE SAME ISSUES WHICH ARE ALREADY CONSIDERE D BY THE ASSESSING OFFICER AT THE TIME ASSESSMENT, ON THE GUISE OF REV ISION. THE RELEVANT PORTION READS AS UNDER:- 10. TO INVOKE THE PROVISIONS OF SECTION 263 OF THE ACT, THE TWIN CONDITIONS MUST BE SATISFIED I.E. THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND FURTHER IT MUST BE PREJUDICIAL TO THE INTEREST OF ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 23 THE REVENUE. UNLESS BOTH CONDITIONS ARE SATISFIED, THE CIT CANNOT ASSUME JURISDICTION TO PASS ORDER U/S 263 OF THE AC T. IT IS NOT NECESSARY THAT EVERY ORDER WHICH IS PREJUDICIAL TO THE INTEREST OF REVENUE IS ALSO ERRONEOUS. UNLESS THE A.OS ORDER I S NOT ERRONEOUS, NO ACTION CAN BE TAKEN BY THE CIT U/S 263 OF THE AC T, THIS IS BECAUSE THE TWIN CONDITIONS I.E. (1) THE ORDER IS E RRONEOUS AND (2) THE SAME IS ALSO PREJUDICIAL TO THE INTEREST OF THE REVENUE ARE NOT CO-EXISTS. IN THE PRESENT CASE, THE A.O. HAS CONDU CTED ENQUIRY BEFORE ALLOWING DEDUCTION TOWARDS WAGES AND CENTERI NG EXPENSES AND ALSO EXAMINED THE POINTS ON WHICH THE CIT WANTS FURTHER VERIFICATION. THE ASSESSING OFFICER AFTER CAREFULLY EXAMINED THE BOOKS OF ACCOUNTS AND RELEVANT VOUCHERS FURNISHED B Y THE ASSESSEE PASSED THE ASSESSMENT ORDER AS INDICATED I N HIS ORDER, WHICH IS CLEARLY EVIDENT FROM THE ASSESSMENT ORDER. THE CONTENTION OF THE CIT WAS THAT THE A.O. HAS NOT CON DUCTED PROPER ENQUIRY AND ALSO NOT APPLIED HIS MIND BEFORE ALLOWI NG THE DEDUCTION. BUT, WE DO NOT AGREE WITH THE CIT FOR T HE REASON THAT THERE IS A DISTINCTION BETWEEN LACK OF ENQUIRY AND INADEQUATE ENQUIRY. IF THERE IS AN INADEQUATE ENQUIRY THAT WO ULD NOT BY ITSELF GIVE OCCASION TO THE CIT TO ASSUME JURISDICTION U/S 263 OF THE ACT, MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MA TTER. THE CIT CAN DO THIS ONLY, WHEN THERE IS A LACK OF ENQUIRY B Y THE ASSESSING OFFICER. IN THE PRESENT CASE, THE ASSESSMENT ORDER IS DETAILED ONE AND ALSO, THE A.O. HAS PASSED A REMARKS IN THE ASSE SSMENT ORDER ON TWO ISSUES, ON WHICH THE CIT ASSUMED JURISDICTIO N, I.E. DISALLOWANCE OF ROUND SOME EXPENDITURE OF RS. 1,00, 000/- UNDER THE HEAD WAGES AND CENTERING CHARGES AND ALSO PARTN ERS CAPITAL ACCOUNTS, WHERE THE ADDITION WAS RS. 66,825/-.THE A .O. HAD CALLED FOR EXPLANATION AND THE ASSESSEE HAS FURNISHED ITS EXPLANATION. BUT, THE CIT WAS OF THE OPINION THAT THE ASSESSING OFFICER COULD HAVE DO WELL TO EXPLORE THE POSSIBILITY OF REJECTIN G THE BOOKS OF ACCOUNTS AND ESTIMATE THE PROFIT. ACCORDING TO CIT, THE ASSESSING OFFICER HAS CONDUCTED ENQUIRY BUT, IN ADEQUATE, THE REFORE HE WANTED FURTHER ENQUIRY ON THE ISSUE ON WHICH HE ASS UMED JURISDICTION. THIS FACT HAD NOT BEEN DISPUTED BY TH E REVENUE. THE COMMISSIONER CANNOT INITIATE REVISION PROCEEDINGS, WITH A VIEW TO CONDUCT FISHING AND REVOLVING ENQUIRY IN THE MATTER S WHICH ARE ALREADY EXAMINED BY THE A.O. THE DEPARTMENT CANNOT DO FRESH ASSESSMENT IN THE GUISE OF REVISION ON THE MATTERS WHICH ARE EXAMINED AND CONCLUDED BY THE A.O. THE A.O. BEING A QUASI JUDICIAL AUTHORITY, SHALL HAVE THE AUTHORITY TO EXE RCISE RIGHT JUDGMENT AND DISCRETION ON THE BASIS OF INFORMATION AVAILABLE ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 24 BEFORE HIM. IN THE PRESENT CASE ON HAND, THE ASSES SING OFFICER AFTER CONSIDERING VOUCHERS, MADE AN ROUND SOME ADDI TION OF RS.1,00,000/- WHICH IS ONE OF THE POSSIBLE VIEW AVA ILABLE FOR HIM, WHICH THE CIT SHALL NOT TERM IT AS LACK OF ENQUIRY OR NON APPLICATION OF MIND. THUS, IT CANNOT BE SAID THAT IT IS A CASE OF LACK OF ENQUIRY OR NON APPLICATION OF MIND. 22. IN THE PRESENT CASE, THE ASSESSEE HAD FURNISHED DET AILED EXPLANATION WITH REGARD TO THE CLAIM OF EXEMPTION U NDER SEC. 54B & 54F OF THE ACT, BEFORE THE ASSESSING OFFICER. FROM THE RECORDS, IT IS CLEAR THAT THE ASSESSING OFFICER HAS MADE THE REQUISITE E NQUIRIES BEFORE FRAMING THE ASSESSMENT AND ALLOWED THE DEDUCTIONS C LAIMED BY THE ASSESSEE. THE CIT REVISED THE ASSESSMENT ORDER WITH OUT POINTING OUT ANY MISTAKES MERELY ON SUSPICIOUS AND SURMISES. AS WE HAVE ALREADY SAID HEREINABOVE THAT THE ASSESSMENT ORDER PASSED B Y THE ASSESSING OFFICER MAY BE BRIEF AND CRYPTIC, BUT HE HAS CONSID ERED THE ISSUES, ON WHICH THE CIT WANTS FURTHER VERIFICATION. MERELY BE CAUSE THE A.O. DID NOT PASSED DETAILED ASSESSMENT ORDER, THE SAME CANN OT BE BRANDED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. 23. IN VIEW OF THE ABOVE AND ALSO APPLYING THE RATIOS O F THE CASE-LAWS DISCUSSED HEREINABOVE AND ALSO RESPECTFULLY FOLLOWI NG THE COORDINATE BENCH DECISION, WE ARE OF THE OPINION THAT THE ASSE SSMENT ORDER PASSED BY THE ASSESSING OFFICER IS NOT ERRONEOUS INSOFAR A S IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THEREFORE, THE CIT ORDER U NDER SEC. 263 OF THE ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 25 ACT IS NOT MAINTAINABLE. ACCORDINGLY, WE QUASHED T HE CIT ORDER UNDER SEC.263 AND RESTORE THE ASSESSMENT ORDER. 24. THE ASSESSEE HAS FILED SEPARATE APPEAL IN I.T.A.NO. 107/VIZ/2015 AGAINST THE ORDER OF CIT(A)-2, VISAKHAPATNAM AND CH ALLENGED THE CONSEQUENTIAL ORDER PASSED BY THE ASSESSING OFFICER UNDER SEC. 143(3) READ WITH SEC. 263 OF THE ACT. 25. SINCE, WE QUASHED THE 263 ORDER PASSED BY THE CIT, THE APPEAL FILED BY THE ASSESSEE AGAINST THE CONSEQUENTIAL ORD ER BECOMES INFRUCTUOUS. THEREFORE, SAME IS DISMISSED AS NOT M AINTAINABLE. 26. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IN I.T. A.NO. 154/VIZ/2012 IS ALLOWED AND IN I.T.A.NO. 107/VIZ/20 15 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD DECEMBER, 2015. SD/- SD/- ( . ) ( . . . . ) ( (( ( V. DURGA RAO ) )) ) ( G. MANJUNATHA) / // / JUDICIAL MEMBER / // / ACCOUNTANT MEMBER /VISAKHAPATNAM: 3 / DATED : 23/12/2015 VR/SPS ITA NOS. 154/VIZ/2012 & 107/VIZ/201 5 26 ) ' 4 / COPY OF THE ORDER FORWARDED TO :- 1. & / THE APPELLANT SMT. P. SUBBA LAKSHMI, 8-9-12, BALLAVARI STREET, YANAM. 2. '(& / THE RESPONDENT ITO, WARD-2, KAKINADA. 3. 5 / THE CIT, KAKINADA RANGE, KAKINADA. 4. 5 () / THE CIT (A)-2, VISAKHAPATNAM. 5. ' , , / // / DR, ITAT, VISAKHAPATNAM 6 . . . . / GUARD FILE / BY ORDER // TRUE COPY // 9: ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM