Kusumlata Sonthalia , Kolkata V. Principal CIT, Central - 1, Kolkata , Kolkata

ITA 1151/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0591 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 25-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RADHEY SHYAM
• Keywords: Revision of order; Search and seizure; Principle of natural justice; Assessment record; Set aside; Capital Gains
• Section: 143(3); 54F; 153A; 205; 13; 153; 22; 54; 263; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.1151/KOL/2018 ( / ASSESSMENT YEAR:2010-11) KUSUMLATASONTHALIA 34, PANKAJ MALLICK SARANI, JAYANTIKA APARTMENT, 1 ST FLOOR, BALLYGUNGE, KOLKATA-700019. VS. PCIT, CENTRAL-1, KOLKATA ./ ./PAN/GIR NO.: ABBPA 8446 Q (APPELLANT) .. (RESPONDENT) APPELLANT BY :NONE RESPONDENT BY :SHRI RADHEYSHYAM, CIT DR / DATE OF HEARING : 28/02/2020 /DATE OF PRONOUNCEMENT : 17/06/2020 / O R D E R PER DR. A.L. SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAI NING TO ASSESSMENT YEAR 2010-11, IS DIRECTED AGAINST THE ORDER PASSED BY TH E PR. COMMISSIONER OF INCOME TAX, CENTRAL-1, KOLKATA, UNDER SECTION 263 OF THE I NCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 15/01/2018. 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F ASSESSEE IN SPITE OF ISSUANCE OF NOTICE FOR HEARING MORE THAN ONE OCCASION AND LD . DEPARTMENTAL REPRESENTATIVE(DR), WAS PRESENT FOR THE APPELLANT R EVENUE. IN THE ABSENCE OF ANY KUSUMLATA SONTHALIA ITA NO.1151/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 2 22 2 APPEARANCE BY THE ASSESSEE, THE APPEAL IS BEING DIS POSED OF EX PARTE QUA THE ASSESSEE, AFTER HEARING LD. DR FOR THE REVENUE ON M ERITS IN TERMS OF RULE 24 OF THE INCOME TAX APPELLATE, TRIBUNAL, RULES, 1963. 3. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. PR. CIT, CENTRAL-1, KOLKATA HAS ERRED IN PASSING ORDER U/S 263 OF THE ACT AND INITI ATING PROCEEDINGS U/S 263 OF THE ACT AND SUBSEQUENTLY SETTING ASIDE THE ORDER PASSED BY D.C. I.T CENTRAL CIRCLE(4), KOLKATA U/S 153A/143(3) OF THE ACT FOR EXAMINING THE ALLOWABILI TY OF DEDUCTION U/S 54F OF THE ACT, WHEN THERE WAS NO SCOPE FOR MAKING ANY DISALLOWANCE BY T HE ASSESSING OFFICER IN THE ORDER PASSED BY HIM U/S 153A/143(3) OF THE ACT, SINCE NO INCRIMI NATING DOCUMENTS WHATSOEVER WAS FOUND DURING SEARCH OPERATIONS U/S 132 OF THE ACT ON THE APPELLANT. THE ACTION TAKEN BY THE LD. PR. CIT, CENTRAL-1, KOLKATA IS AB-INITIO-VOID AND ACCOR DINGLY ORDER U/S 263 OF THE ACT IS LIABLE TO BE QUASHED. 2. WITHOUT PREJUDICE TO THE ABOVE, THAT IN THE FACT S AND CIRCUMSTANCES OF THE CASE, THE LD. PR. CIT, CENTRAL-1, KOLKATA HAS ERRED IN PASSING ORDER U/S 263 OF THE ACT AND SUBSEQUENTLY SETTING ASIDE THE ORDER PASSED BY D.C.I.T CENTRAL C IRCLE-(4), KOLKATA U/S 153A/143(3) OF THE ACT FOR EXAMINING THE ALLOWABILITY OF DEDUCTION U/S 54F OF THE ACT, WHEN THE ISSUE OF ALLOWABILITY OF DEDUCTION U/S SECTION 54F WAS ALREA DY EXAMINED BY THE LD. ASSESSING OFFICER WHILE PASSING ORDER U/S 153A/143(3) OF THE ACT. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY LEARNED ASSESSING OFFICER U/S 153A/143(3) OF THE ACT WAS NOT ERRONEOU S. 4. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. PR. CIT, CENTRAL-1, KOLKATA ERRED IN COMING TO PRIMA-FACIE CONCLUSION THAT THE APPELL ANT IS NOT ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 54F OF THE ACT. THE ACTION OF THE LD. PR. CIT, CENTRAL-1, KOLKATA IN COMING TO SUCH CONCLUSION WAS NOT JUSTIFIED IN THE FACTS OF T HE CASE. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, A ND DELETE ALL OR ANY GROUNDS OF APPEAL AT THE TIME OF HEARING. 4. BRIEF FACTS QUA THE ISSUE ARE THAT IN CASE OF TH E ASSESSEE, A SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON 05.03.2015. SUBSEQUENT T O SEARCH, ASSESSMENT ORDER IN CASE OF THE ASSESSEE HAS BEEN PASSED FOR A.Y.2010-1 1 U / S .153A/143(3)OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT) VIDE ORDER DATED 30/12/2016 BY THE DCIT, CENTRAL CIRCLE-1(4), KOLKAT A HEREINAFTER REFERRED AS THE AO DETERMINING THE ASSESSED INCOME AT RS.12,52,580/ - AS AGAINST THE RETURNED INCOME OF RS.12,23,460/-. IN THIS ASSESSMENT ORDER, ONLY ONE ADDITION OF RS.29,116/- HAS BEEN MADE ON ACCOUNT OF DISALLOWANC E MADE U/S.L4A OF THE ACT. KUSUMLATA SONTHALIA ITA NO.1151/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 3 33 3 LATER ON, LD PRINCIPAL COMMISSIONER OF INCOME TAX ( PCIT) EXERCISED HIS JURISDICTION UNDER SECTION 263 OF THE ACT. THE LD P CIT,ON EXAMINATION OF ASSESSMENT ORDER ALONG WITH THE ASSESSMENT RECORD, NOTICED THAT THE ASSESSEE SOLD TWO OFFICES AT DHANBAD (RELATING TO HIS SHARE) AND ALSO SOLD SHARES OF SHREE RAM ELECTROSTAT PVT. LTD.WHICH RESULTED IN LONG TERM CA PITAL GAIN (LTCG) OF RS.10,18,394/- ON SALE OF TWO OFFICES AND RS.37,10, 000/- ON SALE OF SHARES. TOTAL LTCG EARNED BY THE ASSESSEE IS COMPUTED AT RS.47,28 ,394/- (RS.10,18,394+RS.37,10,000). AGAINST THIS LTCG EARN ED BY THE ASSESSEE, SHE CLAIMED EXEMPTION U/S.54 AND 54F OF THE ACT ON ACCO UNT OF PURCHASE OF FLAT AT SAHARA GRACE, GURGAON. AS PER THE SUBMISSION OF THE ASSESSEE MADE ON 02.12.2016 DURING THE COURSE OF ASSESSMENT PROCEEDI NG, THE OFFICES AT DHANBAD WAS SOLD ON 31.07.2009 AND SHARES WERE SOLD ON 04.0 2.2010 AND INVESTMENT FOR PURCHASE OF FLAT AT GOUGAON WAS CLAIMED TO HAVE BEE N MADE VIDE SALE DEED DATED 09.03.2009. 5. THE LD PCIT NOTICED THAT ASSESSEE HAD PRESENTED BEFORE THE AO THAT PURCHASE OF THE NEW FLAT WAS MADE WITHIN ONE YEAR BEFORE THE DA TE OF SALE OF ORIGINAL ASSET AND HOUSE PROPERTY, THEREFORE,AO ALLOWED DEDUCTION U/S. 54F AND SECTION 54 OF THE ACT RESPECTIVELY. 6. HOWEVER, LD PCIT, ON FURTHER EXAMINATION OF RECO RD, NOTICED THAT THE ASSESSEE HAD TAKEN HOME LOAN FROM ICICI HOME FINANCE LTD. IN MAY 2004 TO BOOK A FIAT TO BE CONSTRUCTED BY SAHARA GRACE AT GURGAON AND PA ID INSTALLMENTS FROM F.Y.2003-04 ONWARDS TILL MARCH 2010. THUS, IT IS CL EAR THAT THE ASSESSEE BOOKED THE FLAT WHICH WAS GOING TO BE CONSTRUCTED BY THE B UILDER I.E., SAHARA GRACE IN F.Y.2003-04. THEREFORE, CLAIM OF THE ASSESSEE MADE BEFORE THE AO FOR PURCHASE OF FLAT HAS BEEN FOUND TO BE A CASE OF CONSTRUCTION OF FLAT AND NOT PURCHASE AS PER JUDICIAL DECISIONS OVERWHELMINGLY HELD IN THIS REGA RD VIZ. IN CASE OF FARIDA A DUNGERPURWALA -VS- ITO(2014) 35 ITR 205 (MUMBAI TRI B.) AND ACIT -VS- SAGAR NITIN PARIKH (MUMBAI TRIB. VIDE ITA NO.6399/M UM/2011 DATED 03.06.2017, IT HAS BEEN HELD THAT THE BOOKING OF A FLAT WHICH IS GOING TO BE CONSTRUCTED BY A BUILDER HAS TO BE CONSIDERED AS A CASE OF 'CONSTRUCTION OF FLAT' AND DEDUCTION U/S.54F AND 54 IS AVAILABLE ONLY IF T HE ASSESSEE CONSTRUCTS A NEW KUSUMLATA SONTHALIA ITA NO.1151/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 4 44 4 HOUSE WITHIN THREE YEARS AFTER THE DATE OF TRANSFER OF ORIGINAL ASSETS OR HOUSE PROPERTY. EVEN AS PER CIRCULAR NO.471 DATED 15.10.1 986 AND FURTHER MODIFIED VIDE CIRCULAR NO.672 DATED 16/12/1993 SUCH ALLOTMENT HOU SE UNDER CONSTRUCTION IS TO BE TREATED AS CASE OF CONSTRUCTION. IN THE ASSESSEE `S CASE, THE CONSTRUCTION OF NEW HOUSE HAS COMMENCED ABOUT SIX YEAR BEFORE THE SALE OF A HOUSE PROPERTY AND CERTAIN SHARES AND EVEN THE SALE AGREEMENT FOR THE NEW FLAT AND POSSESSION OF NEW FLAT WAS TAKEN BEFORE THE DATE OF SALE OF OLD HOUSE PROPERTY AND SHARES ON WHICH LTCG WAS COMPUTED. THEREFORE, LD PCIT HELD THAT THE ASSESSEE IN PRESENT CASE HAD NOT BEEN FOUND TO BE ELIGIBLE FOR DEDUCTION U/S .54 AND 54F OF THE ACT BECAUSE THE ASSESSEE HAD BEEN FOUND TO HAVE CONSTRUCTED A H OUSE PRIOR TO THE DATE OF TRANSFER/SALE OF OLD HOUSE PROPERTY AND SHARES. THUS, LD PCIT NOTED THAT THE AO HAD WRONGLY ALLOWED DEDUCTION U/S.54 AND 54F OF THE ACT WITHOUT EXAMINING THE FULL FACTS OF THE CAS E, WHETHER ACQUIRING OF NEW HOUSE PROPERTY BY THE ASSESSEE IS CONSTRUCTION OF F LATS OR PURCHASE OF FLATS (WHICH PRIMA FACIE ON THE BASIS OF DETAILS AVAILABLE ON RE CORD HAS BEEN FOUND TO BE CONSTRUCTION) AND ACCORDINGLY, ALL THE CONDITIONS O F SECTION 54 AND 54F OF THE ACT HAVE NOT BEEN FULFILLED.THEREFORE, ASSESSMENT ORDER PASSED BY AO U/S 153A/143(3) OF THE ACT DATED 30.12.2016 IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE, HENCE ASSESSMENT ORDER NEEDS TO BE REVI SED AS PER THE PROVISION OF SECTION 263 OF THE ACT. 7. AS THE ORDER PASSED BY THE AO WAS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE, THEREFORE, THE LD. PCIT HAD IS SUED SHOW CAUSE NOTICE DATED 22.12.2017 ASKING THE ASSESSEE TO EXPLAIN AS TO WHY THE ORDER U/S 153A / 143(3) DATED 30.12.2016 SHOULD NOT BE REVISED. IN RESPONSE, THE ASSESSEE SUBMITTED THE WRITTEN SU BMISSION BEFORE THE LD PCIT WHICH IS REPRODUCED BELOW: ITA NO. ASSESSMENT YEAR: KUSUMLATA SONTHALIA ITA NO. 1151/KOL/2018 ASSESSMENT YEAR: 2010-11 P PP PA AA AG GG GE EE E | || | 5 55 5 KUSUMLATA SONTHALIA ITA NO.1151/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 6 66 6 8. HOWEVER, THE LD. PCIT REJECTED THE CONTENTION OF THE ASSESSEE AND HELD AS FOLLOWS: 5.2 I HAVE CONSIDERED THE ABOVE ARGUMENTS OF THE I D. AR. HIS ENTIRE ARGUMENTS ARE BASED ON ACQUISITION OF A NEW HOUSE BY WAY OF ' PURCHASE' FOR WHICH COURTS HAVE HELD THAT THE DATE OF POSSESSION IS DEEMED TO BE DATE OF PURCHASE. AS PER THE PROVISION OF SECTION 54 AND 54F, FOR BEING ELIGIBLE TO CLAIM DEDUCTION UNDER THESE TWO SECTIONS, (I) THE NEW HOUSE SHOULD HAVE BEEN PURCHASED BY THE ASS ESSEE WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH TRANSFER TOOK PLACE (OF OLD HOUSE PROPERTY OR ORIGINAL ASSET ) OR AS THE CASE MAY BE (II) THE NEW HOUSE SHOULD HAVE BEEN CONSTRUCTED WITHIN A PERIOD OF THREE YEARS AFTER THE DATE ON WHICH TRANSFER TOOK P LACE (OF OLD HOUSE PROPERTY OR ORIGINAL ASSET AS THE CASE MAY BE). CONSIDERING THE ABOVE TWO CONDITIONS PROVIDED IN TH E PROVISIONS OF SECTION 54 AND 54F, THE FIRST THING THE AO SHOULD HAVE DECIDED IS WHETHER BOOKING OF NEW FLAT MADE WITH SAHARA GRACE, GURGAON IN F.Y.2003-04 WAS FOR CONSTRUCTION OR FOR PURCHASE OF FLAT ALREADY CONSTRUCTED. IN THIS REGAR D, NO WRITTEN QUERY RAISED BY THE AO IS FOUND ON RECORD. THE SUBMISSION OF THE ASSESS EE DATED 22/12/2016 FILED DURING ASSESSMENT PROCEEDING ON WHICH THE ID. AR HA S RELIED UPON TO PUT HIS ARGUMENT THAT THE ISSUE OF ELIGIBILITY U/S.54/54F H AS BEEN EXAMINED BY THE AO WHILE PASSING THE ASSESSMENT ORDER, IS REPRODUCED A S UNDER: 'DETAILS OF LONG TERM CAPITAL GAIN ALONG WITH SUPPO RTING DOCUMENTS ARE ENCLOSED HEREWITH AND MARKED AS PER ANNEXURE-C. THE SALE OF SHARES OF SHREE RAM ELECTROCAST PRIVATE LIMITED WAS MADE ON 27/02/2 010 AND THE PAYMENT WAS RECEIVED ON 08/03/2010. COPY OF JOURNAL AND BANK ST ATEMENT ARE ENCLOSED HEREWITH AND MARKED AS PER ANNEXURE-D. THE ASSESSEE HAS CLAIMED UNDER SECTION 54F OF THE A CT ON LONG TERM CAPITAL GAINS ON SALE OF SHARES AND OFFICES AS PER DETAILS , CONSEQUENT TO ENTERING INTO AGREEMENT WITH SAHARA INDIA COMMERCIAL CORPORATION LIMITED FOR PURCHASE OF FLAT AT GURGOAN IN TERMS OF AGREEMENT DATED 09.03.2 009. SUPPORTING DOCUMENTS FOR FLAT AT GURGOAN IS ENCLOSED HEREWITH AND MARKED AS PER ANNEXURE-E. SUPPORTING CALCULATIONS FOR EXEMPTION UNDER SECTION 54F OF THE ACT ARE ENCLOSED HEREWITH AND MARKED AS PERANNEXURE-F.' 5.3 FROM THE ABOVE SUBMISSION, IT IS CLEAR THAT T HE ISSUE WHETHER THE BOOKING OF FLAT MADE BY THE ASSESSEE WITH SAHARA GRACE, GURGAO N IN F.Y.2003-04 WAS FOR CONSTRUCTION OF FLAT OR WAS FOR PURCHASE OF READY B UILT HOUSE, HAD NEVER BEEN UNDER HIS CONSIDERATION. HE HAD ALREADY ACCEPTED SUCH NEW FLAT AS BEING PURCHASED ON THE BASIS OF EARLIER SUBMISSION DATED 02.12.2016 MA DE BY THE ASSESSEE BEFORE HIM AND ONLY WANTED TO KNOW THE DATE OF PURCHASE OF THE NEW FLAT TO ASCERTAIN ONLY THAT WHETHER NEW FLAT WAS PURCHASED WITHIN A PERIOD OF O NE YEAR PRIOR TO THE DATE OF TRANSFER OF OLD HOUSE PROPERTY OR SHARES. IN THIS R EGARD, THE ASSESSEE IN HER SUBMISSION CLARIFIED AS THE DATE OF PURCHASE BEING 09.03.2009 ON THE BASIS OF REGISTERED PURCHASE DEED BEING DATED 09.03.2009 THA T IS WITHIN ONE YEAR OF THE DATE OF TRANSFER OF OLD HOUSE PROPERTY AND SHARES A ND ACCORDINGLY, CLAIM OF DEDUCTION U/S.54 AND 54F HAS BEEN JUSTIFIED. KUSUMLATA SONTHALIA ITA NO.1151/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 7 77 7 5.4 CONSIDERING THE ABOVE FACTS AS AVAILABLE IN ASS ESSMENT RECORD, I FIND THAT THE CONTENTION OF THE LD. AR THAT THE ISSUE OF ELIGIBIL ITY U/S.54 /54F WAS EXAMINED BY THE AO IS ONLY WITH RESPECT TO EXAMINATION OF 'DATE OF PURCHASE' TAKING INTO ACCOUNT THE DATE OF POSSESSION OF FLAT AND NOT EXAM INING THE ISSUE WHETHER BOOKING OF FLAT IS FOR 'CONSTRUCTION' OR FOR 'BUYING READY BUILT HOUSE'. THE REAL ISSUE INVOLVED IN THIS CASE IS THAT THE NE W HOUSE UNDER CONSIDERATION WAS BOOKED IN MAY 2004 AFTER TAKING HOME LOAN FROM ICIC I HOME FINANCE LIMITED AND PAID INSTALLMENTS FROM F.Y.2003-04 ONWARDS TILL MAR CH 2010. CONSTRUCTION OF FLATS STARTED IN F.Y.2003-04 AFTER BOOKING AND POSSESSION OF FLAT IS GIVEN ON 09.03.2009 AFTER CONSTRUCTION IS COMPLETED. ACQUIRING OF ANY F LAT IN THE MANNER AS IT WAS ACQUIRED BY THE ASSESSEE DISCUSSED ABOVE HAS BEEN CLARIFIED BY THE CBDT IN CIRCULAR NO.672 DATED 16/12/1993. IN THIS CIRCULAR, IT HAS BEEN CLA RIFIED THAT ACQUISITION OF FLAT THROUGH ALLOTMENT BY DDA WAS TO BE TREATED AS CONST RUCTION OF FLAT WOULD APPLY TO COOPERATIVE SOCIETIES AND OTHER INSTITUTIONS. THE M OST, IMPORTANT POINT OF CONSIDERATION IS WHETHER PURCHASE OF FLAT FROM THE PRIVATE BUILDERS WOULD FALL IN THE CATEGORIES OF 'OTHER INSTITUTIONS' AS HAS BEEN HELD BY VARIOUS COURTS IN FOLLOWING JUDGMENTS AS CITED AND RELIED UPON THE ASSESSEE AS UNDER: I) KISHOR H. GALAIYA VS. INCOME TAX OFFICER, WARD-8(2) (3) [2002] 24 COM 11 (MUMBAI) II) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-25(3) SMT. SUNDER KAUR SUJAN SINGH GADH [2005] 3 SOT206 (MUMBAI) III) SRI VED PRAKASH RAKHRA VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6(1), BANGALORE (ITAT) IV) MRS. JYOTI ARUN KOTHARI VITO, (TS-737-ITAT-2014(MUM ) V) CIT V SMT. BRINDA KUMARI (2001) 114 TAXMANN 266(DEL .) VI) CIT V KULDEEP SINGH (2014) 49 TAXMANN.COM 167 (DEL. ) VII) FARIDA A DUNGURPURWALA V ITO (2014) 52 TAXMANN.COM 227 (MUM. TRIBUNAL) IN THE ABOVE CASES, THE COMPETENT COURTS HAVE HELD THAT THE FLATES CONSTRUCTED BY THE PRIVATE DEVELOPERS ARE ALSO COVERED BY CIRCULAR 471 & 672 AND, THEREFORE, ENTITLED FOR DEDUCTION U/S 54. THE MOST QUESTION IS WHETHER THE AGREEMENT WITH BUILDER TO PURCHASE A FLAT THERE IS GOING TO BE CONSTRUCTED, I S THE CASE OF PURCHASE OR CONSTRUCTION. IN THIS REGARD HONBLE COURT OF MUMBA I IN THE CASE OF HILLA J. B. VADIA 216 ITR 376 HELD THAT IT IS A CASE CONSTRUCTION. F URTHER, ON IDENTICAL QUESTION, I.E. WHETHER THE BOOKING OF FLAT WITH THE BUILDER IS TO BE CONSIDERED A CASE OF PURCHASE OR CONSTRUCTION WAS CONSIDERED BY MUMBAI BENCH OF TRIB UNAL IN THE CASE OF ACIT VS. SARDAR KAUR SUJAN SINGH AND IT WAS HELD TO BE A CAS E OF CONSTRUCTION. 5.7 AFTER DISCUSSING THE LEGAL POSITION AS HELD IN VARIOUS JUDGEMENTS OF COURTS WITH REGARD TO NATURE OF ACQUIRING A HOUSE/FLAT FROM A B UILDER AFTER ITS BOOKING WITH BUILDER AT THE TIME OF STARTING OF CONSTRUCTION AND THEN PA YING THE COST OF CONSTRUCTION IN INSTALLMENTS, IF FACTS OF PRESENT CASE IS EXAMINED, IT IS PRIMA FACIE FOUND THAT IT IS THE CASE OF 'CONSTRUCTION' AND NOT 'PURCHASE' BECAUSE T HE ASSESSEE BOOKED THE FLAT IN MAY, 2004 WITH SAHARA GRACE, GURGAON (BUILDER) WHEN IT STARTED CONSTRUCTING FLATS. THE FLAT WAS BOOKED AFTER TAKING HOME LOAN FROM ICI CI HOME FINANCE LTD. THEREAFTER, PAYMENTS WERE MADE TO BUILDER IN INSTAL LMENTS TO MEET THE COST OF CONSTRUCTION AND FINALLY, POSSESSION OF FLAT WAS HA NDED OVER ON 09.03.2009. THE ORIGINAL ASSET BEING HOUSE AND SHARES WERE SOLD ON 21.07.2009 & 04.02.2010 AND 27.02.2010 RESPECTIVELY AND LTCG EARNED ON THEIR SA LE HAS BEEN COMPUTED. BOTH ASSETS ARE SOLD AFTER TAKING POSSESSION OF CONSTRUC TED FLAT WHILE AS PER THE PROVISIONS KUSUMLATA SONTHALIA ITA NO.1151/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 8 88 8 OF SECTION 54 AND 54F, DEDUCTION UNDER THESE TWO SE CTIONS ARE ALLOWABLE ONLY WHEN THE NEW HOUSE IS CONSTRUCTED WITHIN A PERIOD OF THR EE YEARS FROM THE DATE OF SALE OF ORIGINAL ASSET. THEREFORE, PRIMA-FACIE, IT IS CLEAR THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION EITHER U/S.54 OR 54F. HOWEVER, IN THE INT EREST OF NATURAL JUSTICE, THE ASSESSEE SHOULD BE GIVEN AN OPPORTUNITY TO SHOW THA T HER CASE OF ACQUISITION OF NEW HOUSE IS NOT OF 'CONSTRUCTION' BUT OF 'PURCHASE' TO JUSTIFY HER CLAIM FOR DEDUCTION U/S.54 AND 54F. THE AO SHOULD THEN, AFTER EXAMINING THE ENTIRE FACTS OF THE CASE AND TAKING INTO CONSIDERATION THE EXPLANATION OF THE AS SESSEE, DETERMINE WHETHER THE ASSESSEE ACQUIRED THE NEW FLAT BY WAY OF 'CONSTRUCT ION' OR BY WAY OF 'PURCHASE' AFTER TAKING INTO ACCOUNT THE JUDGEMENTS AND THE CB DT'S CIRCULAR NO.471 DATED 15.10.1986 AND 672 DATED 16.12.1993 DISCUSSED IN TH E PREVIOUS PARAS OF THIS ORDER AND ACCORDINGLY, DECIDE ABOUT ALLOWING OR DISALLOWI NG THE DEDUCTION U/S.54 AND 54F OF THE ACT, KEEPING IN VIEW OF MY FINDINGS DISCUSSE D IN THIS ORDER ALSO. THEREAFTER, A FRESH ASSESSMENT ORDER IS TO BE PASSED BY THE ASSES SING OFFICER IN SPEAKING MANNER DISCUSSING ENTIRE FACTS AND CIRCUMSTANCES OF THE CA SE ALONG WITH THE EXPLANATION OF THE ASSESSEE AND HIS DECISION ON ALLOWING OR DISALLOWIN G THE DEDUCTION U/S 54 OR 54F. 6. IN VIEW OF MY ABOVE DECISION, THE ASSESSMENT ORD ER PASSED U/S 153A / 143(3) DATED 30/12/2016 FOR A.Y. 2010-11 IS SET ASIDE AND RESTO RED TO THE FILE OF THE ASSESSING OFFICER TO THE EXTENT OF EXAMINING THE ALLOWABILITY OF DEDUCTION U/S 54 AND 54F KEEPING IN VIEW THE DIRECTIONS GIVEN BY ME IN PREVI OUS PARA AND THEN PASS A FRESH ASSESSMENT ORDER. OTHER ADDITIONS MADE IN ORIGINAL ASSESSMENT ORDER DATED 30.12.2016 SHALL REMAIN INTACT. 9. WE HAVE HEARD LD DR FOR THE REVENUE AND CAREFULL Y GONE THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALON G WITH THE DOCUMENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE FINDINGS OF THE LD PCIT AND OTHER MATERIALS AVAILAB LE ON RECORD. FIRST OF ALL WE HAVE TO SEE WHETHER THE REQUISITE JURISDICTION NECE SSARY TO ASSUME REVISIONAL JURISDICTION IS THERE EXISTING BEFORE THE PR. CIT T O EXERCISE HIS POWER. FOR THAT, WE HAVE TO EXAMINE AS TO WHETHER IN THE FIRST PLACE TH E ORDER OF THE ASSESSING OFFICER FOUND FAULT BY THE PRINCIPAL CIT IS ERRONEOUS AS WE LL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. FOR THAT, LET US TAKE THE GUIDANCE OF JUDICIAL PRECEDENCE LAID DOWN BY THE HONBLE APEX COURT IN MALABAR INDUSTRIES LTD . VS. CIT [2000] 243 ITR 83(SC) WHEREIN THEIR LORDSHIP HAVE HELD THAT TWIN CONDITIONS NEEDS TO BE SATISFIED BEFORE EXERCISING REVISIONAL JURISDICTION U/S 263 O F THE ACT BY THE CIT. THE TWIN CONDITIONS ARE THAT THE ORDER OF THE ASSESSING OFFI CER MUST BE ERRONEOUS AND SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN T HE FOLLOWING CIRCUMSTANCES, THE ORDER OF THE AO CAN BE HELD TO BE ERRONEOUS ORDER, THAT IS (I) IF THE ASSESSING OFFICERS ORDER WAS PASSED ON INCORRECT ASSUMPTION OF FACT; OR (II) INCORRECT APPLICATION OF LAW; OR (III)ASSESSING OFFICERS ORD ER IS IN VIOLATION OF THE PRINCIPLE KUSUMLATA SONTHALIA ITA NO.1151/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 9 99 9 OF NATURAL JUSTICE; OR (IV) IF THE ORDER IS PASSED BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND; (V) IF THE AO HAS NOT INVESTIG ATED THE ISSUE BEFORE HIM; THEN THE ORDER PASSED BY THE ASSESSING OFFICER CAN BE TE RMED AS ERRONEOUS ORDER. COMING NEXT TO THE SECOND LIMB, WHICH IS REQUIRED T O BE EXAMINED AS TO WHETHER THE ACTIONS OF THE AO CAN BE TERMED AS PREJUDICIAL TO THE INTEREST OF REVENUE. WHEN THIS ASPECT IS EXAMINED ONE HAS TO UNDERSTAND WHAT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIES (SUPRA) HELD THAT THIS PHRASE I.E. PREJUDICIAL TO THEINTEREST OF THE REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. THEIR LORDSHIP HELD THAT IT HAS TO BE REMEMBERED THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF ASS ESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF THE REVEN UE. WHEN THE ASSESSING OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND I T HAS RESULTED IN LOSS TO THE REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE AS SESSING OFFICER HAS TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT B E TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF THE REVENUE UNLESS THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW. 10. TAKING NOTE OF THE AFORESAID DICTUM OF LAW LAID DOWN BY THE HONBLE APEX COURT, LET US EXAMINE WHETHER ASSESSMENT ORDER PASS ED BY AO U/S 153A/143(3) OF THE ACT DATED 30.12.2016 IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. WE NOTE THAT DURING THE REVISION PROCEED INGS UNDER SECTION 263 OF THE ACT, THE ASSESSEE SUBMITTED WRITTEN SUBMISSIONS BEF ORE THE LD PCIT ( VIDE PARA 4 OF LD PCIT`S ORDER AT PAGE 4) STATING THAT ISSUE OF ELIGIBILITY OF EXEMPTION UNDER SECTION 54/54F HAS BEEN EXAMINED BY ASSESSING OFFIC ER WHILE PASSING ASSESSMENT ORDER (REFER PAGE 10-17 OF PAPER BOOK). THEREFORE, IT IS ABUNDANTLY CLEAR THAT DURING THE ORIGINAL ASSESSMENT THE ISSUE RELATING T O EXEMPTION UNDER SECTION 54/54F OF THE ACT HAVE BEEN EXAMINED BY ASSESSING O FFICER. IT IS IMPORTANT TO NOTE THAT IN ASSESSEE`S CASE THE SEARCH AND SEIZURE ACTI ON HAS BEEN CONDUCTED ON 05.03.2015 WHEREAS THE ASSESSMENT YEAR UNDER CONSID ERATION IS A.Y. 2010-11, WHICH IS ABATED ASSESSMENT. WE NOTE THAT NO INCRIMI NATING MATERIALS RELATING TO THE EXEMPTION UNDER SECTION 54/54F OF THE ACTWAS FOUND DURING THE COURSE OF SEARCH. KUSUMLATA SONTHALIA ITA NO.1151/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 1 11 10 00 0 11.IT WOULD BE NECESSARY HERE TO ADDRESS THE PRELIM INARY ISSUE OF WHETHER THE ADDITION COULD BE FRAMED U/S 153A OF THE ACT IN RES PECT OF A CONCLUDED PROCEEDING WITHOUT THE EXISTENCE OF ANY INCRIMINATING MATERIAL S FOUND IN THE COURSE OF SEARCH. THE SCHEME OF THE ACT PROVIDES FOR ABATEMENT OF PEN DING PROCEEDINGS AS ON THE DATE OF SEARCH. IT IS NOT IN DISPUTE THAT THE ASSE SSMENT FOR THE ASST. YEAR 2010-11 WAS ORIGINALLY COMPLETED AND THEREAFTER A SEARCH AN D SEIZURE ACTION WAS CONDUCTED ON 05.03.2015, THEREFORE, ASSESSMENT YEAR 2010-11 I S AN UNABATED ASSESSMENT. HENCE UNLESS THERE IS ANY INCRIMINATING MATERIAL FO UND DURING THE COURSE OF SEARCH RELATABLE TO SUCH CONCLUDED YEAR, THE STATUTE DOES NOT CONFER ANY POWER ON THE LD AO TO DISTURB THE FINDINGS GIVEN THEREON AND INCOME DETERMINED THEREON, AS FINALITY HAD ALREADY BEEN REACHED THEREON, AND SUC H PROCEEDING WAS NOT PENDING ON THE DATE OF SEARCH TO GET ITSELF ABATED. FOR THA T WE RELY ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS KABU L CHAWLA REPORTED IN (2016) 380 ITR 573 (DEL) HELD AS UNDER:- '37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: (I) ONCE A SEARCH T AKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UND ER SECTION 153A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE P ERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDI NG THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. (II) ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPU TED BY THE LD AOS AS A FRESH EXERCISE. (III) THE LD AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAK ES PLACE. THE LD AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. (IV) ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITIONS S HOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SE ARCH, OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE LD AO WH ICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMEN T 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATE RIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF SEIZED MATERIAL.' (V) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE KUSUMLATA SONTHALIA ITA NO.1151/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 1 11 11 11 1 REITERATED AND THE ABATED ASSESSMENT OR REASSESSMEN T CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PR OCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO C OMPLETE ASSESSMENT PROCEEDINGS. (VI) INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIG INAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 15 3A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EA CH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXIST ING OR BROUGHT ON THE RECORD OF THE LD AO. (VII) COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE LD AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR R EQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DI SCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT.' 38. THE PRESENT APPEALS CONCERN AYS 2002-03, 2005-0 6 AND 2006-07, ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STO OD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEA RCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. THEREFORE, IN ASSESSEE`S CASE ORIGINAL ASSESSMENT W AS COMPLETED MUCH PRIOR TO SEARCH AND SEIZURE THEREFORE THE ASSESSMENT YEAR UN DER CONSIDERATION, THAT IS, A.Y. 2010-11 IS UNABATED AND IN UNABATED PROCEEDINGS, TH E AO CANNOT DISTURB THE FINDINGS GIVEN THEREON IN THE ORIGINAL ASSESSMENT U NLESS THERE IS INCRIMINATING MATERIAL UNEARTHED BY THE SEARCH TEAM, SINCE IN ASS ESSEE`S CASE UNDER CONSIDERATION THERE IS NO INCRIMINATING MATERIAL THEREFORE ORDER PASSED BY THE ASSESSING OFFICER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST O F REVENUE. 12. WE NOTE THAT ON THE IDENTICAL FACTS, IN CASE OF ONE OF THE ASSESSEE`S COVERED UNDER THE SAID SEARCH AND SEIZURE ACTION, THIS TRIB UNAL HAS QUASHED THE ORDER OF LD PCIT UNDER SECTION 263 OF THE ACT, VIDE ITA NO.1164 /KOL/2018, IN CASE OF NITYANAANDSONTHALIA, FOR A.Y. 2010-11, THE FINDINGS OF THE TRIBUNAL IS GIVEN BELOW: 2.IT TRANSPIRES DURING THE COURSE OF HEARING THAT THE PCIT HAS ASSUMED HIS REVISION JURISDICTION WHILST SETTING ASIDE THE ASSESSMENT IN QUESTION DAT ED 25.12.16 AS UNDER: 5. AS PER DETAILS AVAILABLE ON RECORD, THE ASSESSE E HAD SOLD A FLAT AT DHANBAD ON 18.12.2009 AND LAND AND BUILDING AT DAHIYA ON 24 12.2009 EARNI NG LONG TERM CAPITAL GAIN (LTCG) OF RS KUSUMLATA SONTHALIA ITA NO.1151/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 1 11 12 22 2 5,72,502 AND RS 23,11,098 RESPECTIVELY TOTALLING TO RS 28,63,600/-. AGAINST SUCH LONG TERM CAPITAL GAIN EARNED BY THE ASSESSEE., HE HAS CLAIME D DEDUCTION U/S 54 & 54F, ON ACCOUNT OF PURCHASE OF RIGHT IN A FLAT AT UNIWORLD CITY HORIZO NS BY BENGAL UNITECH IN NEW TOWN, KOLKATA BEING BUILT BY BENGAL UNITECH ON 10TH JUNE 2010 FRO M SHRI RAM MULTICOM PVT LTD BY PAYING RS.40,00,000/-. THERE IS NO DETAIL AVAILABLE ON THE RECORD TO SHOW THAT AS TO WHEN THE FLAT WAS ACQUIRED BY THE ASSESSEE FROM BENGAL UNITECH. JUST BY PURCHASING OF ANY RIGHT IN THE FLAT UNDER CONSTRUCTION, IT CANNOT BE SAID THAT THE ASSESSEE H AS ACQUIRED ANY FLAT BY WAY OF 'PURCHASE OR 'CONSTRUCTION. THEREFORE, THE AO HAS WRONGLY ALLOWE D DEDUCTION U/S 54 & 54F, ONLY ON THE BASIS OF PURCHASE OF RIGHT IN A FLAT UNDER CONSTRUCTION. FROM EXAMINATION OF RECORD OF AY 2014-15, IT HAS BEEN FOUND THAT THIS RIGHT HAS BEEN SOLD BY THE ASSESSEE IN SEPTEMBER, 2013. THEREFORE, I FOUND THAT PRIMA FACIE DEDUCTION U/S 54 & 54E, WAS WRONGLY ALLOWED BY AO WITHOUT EXAMINING THE DETAIL OF NATURE OF ACQUISITION MADE BY THE ASS ESSEE OF A FLAT FROM BENGAL UNITECH. CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES OF TH E CASE, AS DISCUSSED ABOVE AND TAKING INTO ACCOUNT THE FACT THAT NO SUBMISSION HAS BEEN MADE B Y THE ASSESSEE AGAINST MY NOTICE U/S 263, I SET ASIDE THE ASSESSMENT ORDER PASSED BY THE AO U/S 143 (3)/153A DATED 30/12/2016 AND RESTORE IT TO THE FILE OF THE AO TO THE EXTENT OF EXAMINING THE I SSUE RELATING TO ALLOWING DEDUCTION TO ASSESSEE U/S 54 & 54F AFTER EXAMINING THE NATURE OF RIGHT PU RCHASED BY ASSESSEE IN A FLAT UNDER CONSTRUCTION AT UNIWORLD CITY HORIZON IN NEW TOWN K OLKATA BEING BUILT WHETHER IT IS WITHIN THE TIME PERIOD GIVEN IN THE PROVISIONS OF 54 & 54DF OR NOT AND WHETHER THE SAID FLAT WAS SOLD BY THE ASSESSEE AFTER THE TIME LIMIT OF THREE YEAR OR NOT, AFTER TAKING THE POSSESSION OF THE FLAT AND ACCORDINGLY DETERMINE, THE ELIGIBILITY OF ASSESSEE TO ALLOW DEDUCTION U/S 54 & 54F OF THE ACT AND THEN PASS A FRESH ASSESSMENT ORDER IN THIS REGARD B Y COMPUTING CORRECT AMOUNT OF TAXABLE LONG TERM CAPITAL GAIN IN THE HAND OF THE ASSESSEE. OTHE R ADDITIONS MADE BY THE AO IN ORIGINAL ASSESSMENT ORDER SHALL REMAIN INTACT. 6. IN THE RESULT, THE ASSESSMENT ORDER DATED 30.12. 2016 IS SET ASIDE TO THE EXTENT OF EXAMINATION OF DEDUCTION U/S.54 AND 54F AND PASSING OF A FRESH ASSESSMENT ORDER AS DIRECTED ABOVE. 3. WE NOW ADVERT TO THE BASIC RELEVANT FACTS. THERE IS HARDLY ANY DISPUTE THAT WE ARE IN ASSESSMENT YEAR 2009-10. THE DEPARTMENT HAD CARRIED OUT SEARCH IN QUESTION DATED 05.08.2014 IN M/S KUSHAL GROUP, KOLKATA. THE SAME CULMINATED IN I NITIATION OF SECTION 153A PROCEEDINGS VIDE NOTICE DATED 20.03.2015. THE ASSESSEE FILED HIS RET URN ON 15.05.15 STATING INCOME OF RS.18,62,070/-. THE ASSESSING OFFICER THEN COMPLETE D THE REGULAR ASSESSMENT ACCEPTING THE ABOVE RETURN INCOME. SUFFICE TO SAY, IT IS THE SAID ASSES SMENT WHICH HAS BEEN SUBJECTED TO REVISION PROCEEDINGS IN PCITS ORDER UNDER CHALLENGE ON THE GROUND THAT THE ASSESSING OFFICER HAS WRONGLY ACCEPTED THE ASSESSEES SECTION 54 & 54F DE DUCTION CLAIM (SUPRA). 4. BOTH THE LEARNED REPRESENTATIVES REITERATED THEI R RESPECTIVE PLEADINGS AGAINST AND IN SUPPORT OF THE PCITS ASSUMPTION OF REVISION JURISD ICTION. HONBLE APEX COURTS LANDMARK DECISION IN MALABAR INDUSTRIES CO. VS. CIT 243 ITR 83 HOLDS THAT BEFORE AN ASSESSMENT IS SOUGHT TO BE REVISED IN PROCEEDINGS U/S 263 OF THE ACT, TH E SAME HAS TO BE ERRONEOUS AS WELL AS CAUSED PREJUDICE TO INTEREST OF THE REVENUE; SIMULTANEOUSL Y. AND ALSO AN ASSESSMENT CANNOT BE TERMED AS ERRONEOUS CAUSING PREJUDICE TO INTEREST OF THE REVE NUE IN CASE THE ASSESSING OFFICER ADOPTS ONE OF THE POSSIBLE VIEW. REVERTING BACK TO IMPUGNED REGUL AR ASSESSMENT, WE NOTICE THAT THE ASSESSING OFFICER HAD CLAIMED YET ANOTHER REGULAR ASSESSMENT ON 30.11.10 INVOKING SECTION 153A/143(3) PROCEEDINGS WHILST ASSESSING THE TOTAL INCOME OFRS. 18,62,400/- ONLY. THAT BEING THE CASE, IT IS SUFFICIENTLY CLEAR THAT THE IMPUGNED SECOND ASSESSM ENT DATED 25.12.16 PERTAINED TO THE SEARCH DATED 05.08.14 ONLY QUA THE ALLEGED INCRIMINATING MATERIAL FOUND/SEIZED. IT EMERGES FROM THE CASE RECORDS THAT THE ASSESSEE HAD CLAIMED THE IMPU GNED SECTION 54 AND 54F DEDUCTION RELIEF AT THE FIRST INSTANCE IN FORMER ASSESSMENT . THIS ISSUE NOWHERE FORMED SUBJECT MATTER OF DEDUCT ION IN THE LATTER ASSESSMENT THEREFORE. WE CONCLUDE IN THE SE FACTS THAT SINCE THE ASSESSING OFFICER COULD NOT HAVE EVEN TAKEN UP THE ASSESSEES ABOVE DEDUCTI ON CLAIM DURING LATTER ASSESSMENT, THE PCIT HAS ERRED IN LAW AND ON FACTS IN TERMING THE SAME A S ERRONEOUS CAUSING PREJUDICE TO INTEREST OF THE REVENUE. WE THEREFORE RESTORE THE ASSESSING OFF ICERS REGULAR ASSESSMENT DATED 25/30.12.16 AND REVERSE THE PCITS REVISION DIRECTIONS UNDER CH ALLENGE. KUSUMLATA SONTHALIA ITA NO.1151/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 1 11 13 33 3 13. WE ALSO NOTE THAT THE ASSESSING OFFICER HAS ADO PTED ONE OF THE COURSES PERMISSIBLE IN LAW AND EVEN IF IT HAS RESULTED IN L OSS TO THE REVENUE, THE SAID DECISION OF THE ASSESSING OFFICER CANNOT BE TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AS HELD BY HONBLE SUPR EME COURT IN MALABAR INDUSTRIES LTD. VS. CIT (SUPRA). SINCE THE ORDER OF THE ASSESSING OFFICER CANNOT BE HELD TO BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE, IN THE FACTS AND CIRCUMSTANCES NARRATED ABOVE, THE USURPAT ION OF JURISDICTION EXERCISING REVISIONAL JURISDICTION BY THE PRINCIPAL CIT IS N ULL IN THE EYES OF LAW AND, THEREFORE, WE ARE INCLINED TO QUASH THE VERY ASSUMP TION OF JURISDICTION TO INVOKE REVISIONAL JURISDICTION U/S 263 BY THE PRINCIPAL CI T . 14.BEFORE PARTING, IT IS NOTED THAT THE ORDER IS BE ING PRONOUNCED AFTER 90 DAYS OF HEARING. HOWEVER, TAKING NOTE OF THE EXTRAORDINARY SITUATION IN THE LIGHT OF THE COVID-19 PANDEMIC AND LOCKDOWN, THE PERIOD OF LOCKD OWN DAYS NEED TO BE EXCLUDED. FOR COMING TO SUCH A CONCLUSION, WE RELY UPON THE DECISION OF THE CO- ORDINATE BENCH OF THE MUMBAI TRIBUNAL IN THE CASE O F DCIT VS. JCB LIMITED IN ITA NO. 6264/MUM/2018 AND ITA NO. 6103/MUM/2018 FOR A.Y. 2013-14 ORDER DATED 14.05.2020. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE COURT ON 17.06.2020 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 17/06/2020 ( SB, SR.PS ) KUSUMLATA SONTHALIA ITA NO.1151/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 1 11 14 44 4 COPY OF THE ORDER FORWARDED TO: 1. KUSUMLATA SONTHALIA 2. PR. CIT-CENTRAL, KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATABENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES