Shri Pankaj Wadhwani, Indore V. The CIT-I, Indore

ITA 58/IND/2011

• Counselvise Citation: 5822714 RSA 2011
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 30-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KESHAV SAXENA
• Keywords: Capital asset; Prejudicial to interest; Revised return
• Section: 143(3); 54F; 32; 147; 148; 263; 10; 139

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.58/IND/2011 AY: 2006-07 SHRI PANKAJ WADHWANI INDORE PAN AANPW-6525B ..APPELLANT V/S. COMMISSIONER OF INCOME TAX-I INDORE ..RESPONDENT APPELLANT BY :SMT. RICHA PARWAL, CA RESPONDENT BY :SHRI KESHAV SAXENA, CIT/DR DATE OF HEARING : 11.1.2012 DATE OF PRONOUNCEMENT : 25.1.2012 ORDER PER JOGINDER SINGH BY WAY OF THIS APPEAL, THE ASSESSEE SEEKS TO CHALLE NGE THE ORDER OF THE LEARNED CIT-I, INDORE, DATED 17.3.2011 ON THE GROUND THAT THE LEARNED CIT WAS NOT JUSTIFIED IN HOLDING T HAT THE ORDER 2 PASSED BY THE AO U/S 147/143(3) OF THE ACT WAS ERRO NEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2. DURING HEARING, WE HAVE HEARD SMT. RICHA PARWAL, LEARNED COUNSEL FOR THE ASSESSEE AND SHRI KESHAVE SAXENA, L EARNED CIT DR. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE LD. CIT PASSED ORDER U/S 263 BY HOLDING THAT THE DE DUCTION U/S 54F WAS WRONGLY ALLOWED BY THE ASSESSING OFFICER. T HE ORIGINAL ASSESSMENT WAS CLAIMED TO BE FRAMED U/S 147 R.W.S. 143(3) OF THE ACT AS THE REASON FOR REOPENING WAS THE ISSUE O F CAPITAL GAIN. IT WAS STRONGLY CONTENDED THAT SINCE THE SUBJECT MA TTER U/S 147 WAS CAPITAL GAIN AND THE LD. ASSESSING OFFICER EXTE NSIVELY AND EXHAUSTIVELY VERIFIED THE CALCULATION, THAT TOO WIT H THE HELP OF SUPPORTING MATERIAL AND AFTER DUE INQUIRY, THEREFOR E, THE ASSESSMENT ORDER WAS CLAIMED TO BE PASSED WITHIN TH E PARAMETERS OF THE LAW, THAT TOO, AFTER DUE APPLICAT ION OF MIND, THEREFORE, INVOCATION OF REVISIONAL JURISDICTION U/ S 263 IS AGAINST THE PROVISIONS OF THE ACT. PLEA WAS ALSO RAISED THA T THE ORIGINAL ORDER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE I NTEREST OF THE REVENUE. IT WAS ALSO POINTED OUT THAT FAILURE TO CO MPLY WITH THE PROVISIONS OF SECTION 54F WOULD RENDER ITS EFFECT O NLY AFTER LAPS OF THREE YEARS AND NOT AT THE STAGE OF INVOKING REVISI ONAL JURISDICTION 3 BY THE LD. CIT. A STRONG PLEA WAS RAISED THAT NON-C ONSTRUCTION OF THE HOUSE WAS DUE TO FAILURE ON THE PART OF THE COL ONISER TO HAND OVER THE PLOT TO THE ASSESSEE. 3. ON THE OTHER HAND, THE LD. CIT/DR STRONGLY DEFEN DED THE INVOCATION OF REVISIONAL JURISDICTION U/S 263 OF TH E ACT BY THE LD. CIT ON THE PLEA THAT TILL TODAY, THE HOUSE HAS NOT BEEN CONSTRUCTED BY THE ASSESSEE AND THE PRESCRIBED LIMI T OF THREE YEARS PROVIDED UNDER THE ACT HAS ALREADY LAPSED. IT WAS STRONGLY CONTENDED THAT THE ASSESSMENT ORDER WAS VERY MUCH P REJUDICIAL TO THE INTEREST OF THE REVENUE BECAUSE IT WAS FRAME D WITHOUT FULFILLING THE CONDITIONS PROVIDED U/S 54F OF THE A CT FOR CLAIMING EXEMPTION, THEREFORE, THE LD. CIT RIGHTLY INVOKED H IS REVISIONAL JURISDICTION U/S 263 OF THE ACT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON FILE. THE FACTS, IN BRIEF, AR E THAT THE ASSESSEE DECLARED INCOME OF RS.1,43,990/- IN ITS RETURN FILE D ON 31.10.2006. IT WAS NOTICED BY THE ASSESSING OFFICER , FROM THE RETURN OF INCOME, THAT THE ASSESSEE SOLD AN AGRICUL TURAL LAND FOR A SUM OF RS.5,40,000/- AND CLAIMED EXEMPTION U/S 54F FROM LONG TERM CAPITAL GAIN. AS PER THE ASSESSING OFFICER, TH E LONG TERM CAPITAL GAIN WHICH WORKS OUT TO RS.65,449/- SHOULD HAVE BEEN 4 SHOWN IN THE RETURN OF INCOME INSTEAD OF NIL, THERE FORE, HE ISSUED NOTICE U/S 148 ON 4.1.2008 TO THE ASSESSEE. THE ASS ESSEE, IN RESPONSE TO THE NOTICE, FILED RETURN ON 22.2.2008 D ECLARING TOTAL INCOME AT RS.2,03,100/-. IT IS PERTINENT TO MENTION HERE THAT AFTER REOPENING THE CASE U/S 147 OF THE ACT, THE AS SESSEE WORKED OUT THE LONG TERM CAPITAL GAIN AT RS.59,118/- AND O FFERED THE SAME IN THE REVISED RETURN FILED ON 22.2.2008. AS P ER THE ASSESSING OFFICER, IF SCRUTINY NOTICE WOULD NOT HAV E BEEN ISSUED TO THE ASSESSEE, THE AMOUNT OF CAPITAL GAIN WOULD H AVE ESCAPED TAXATION, THEREFORE, HE ALSO ORDERED FOR INITIATION FOR PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. ADMITTEDLY, A S CONTAINED IN PARA 2 OF THE ASSESSMENT ORDER, THE DETAILS FILED B Y THE ASSESSEE WERE DULY EXAMINED BY THE ASSESSING OFFICER. THE MA IN GRIEVANCE OF THE ASSESSEE IS THAT WHILE INVOKING THE REVISION AL JURISDICTION U/S 263 OF THE ACT BY THE LD. CIT, THE TIME LIMIT O F THREE YEARS FOR CLAIMING EXEMPTION U/S 54F WAS AVAILABLE TO THE ASS ESSEE, THEREFORE, LD. CIT EXCEEDED ITS JURISDICTION. ON QU ESTIONING FROM THE BENCH WHETHER THE ASSESSEE HAS STARTED CONSTRUC TION EVEN TODAY, IT WAS CLARIFIED THAT NO CONSTRUCTION HAS YE T STARTED AS THE PLOT HAS NOT BEEN HANDED OVER TO THE ASSESSEE BY TH E BUILDER/COLONISER. BEFORE COMING TO ANY CONCLUSION, WE ARE 5 REPRODUCING HEREUNDER THE RELEVANT PROVISIONS OF SE CTION 54F OF THE ACT: 27 [ CAPITAL GAIN ON TRANSFER OF CERTAIN CAPITAL ASSETS NOT TO BE CHARGED IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE. 28 54F. (1) 29 [SUBJECT TO THE PROVISIONS OF SUB-SECTION (4), WHER E, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HI NDU UNDIVIDED FAMILY], THE CAPITAL GAIN ARISES FROM THE TRANSFER OF ANY LONG-TERM CAPITAL ASSET, NOT BEING A RESIDENTIAL HOUSE (HEREA FTER IN THIS SECTION REFERRED TO AS THE ORIGINAL ASSET), AND THE ASSESSE E HAS, WITHIN A PERIOD OF ONE YEAR BEFORE OR 30 [TWO YEARS] AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE PURCHASED, OR HAS WITHIN A PERIOD OF THREE YEARS AFTER THAT DATE CONSTRUCTED, A RESIDENTIAL HO USE (HEREAFTER IN THIS SECTION REFERRED TO AS THE NEW ASSET), THE CAP ITAL GAIN SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISI ONS OF THIS SECTION, THAT IS TO SAY, ( A ) IF THE COST OF THE NEW ASSET IS NOT LESS THAN THE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, THE WHOLE OF SUCH CAPITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45 ; ( B ) IF THE COST OF THE NEW ASSET IS LESS THAN THE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, SO MUCH OF THE CAPITAL GAIN AS BEARS TO THE WHOLE OF THE CAPITAL GAIN THE SAME PROPORTION AS THE COST OF THE NEW ASSET BEARS TO THE NET CONSI DERATION, SHALL NOT BE CHARGED UNDER SECTION 45 : 31 [ PROVIDED THAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL A PPLY WHERE ( A ) THE ASSESSEE, ( I ) OWNS MORE THAN ONE RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, ON THE DATE OF TRANSFER OF THE ORIGI NAL ASSET; OR ( II ) PURCHASES ANY RESIDENTIAL HOUSE, OTHER THAN THE N EW ASSET, WITHIN A PERIOD OF ONE YEAR AFTER THE DATE O F TRANSFER OF THE ORIGINAL ASSET; OR ( III ) CONSTRUCTS ANY RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, WITHIN A PERIOD OF THREE YEARS AFTER THE DAT E OF TRANSFER OF THE ORIGINAL ASSET; AND ( B ) THE INCOME FROM SUCH RESIDENTIAL HOUSE, OTHER THA N THE ONE RESIDENTIAL HOUSE OWNED ON THE DATE OF TRAN SFER OF THE ORIGINAL ASSET, IS CHARGEABLE UNDER THE HEAD INCOM E FROM HOUSE PROPERTY.] EXPLANATION. FOR THE PURPOSES OF THIS SECTION, 32 [***] 33 [***] NET CONSIDERATION, IN RELATION TO THE TRANSFER OF A CAPITAL ASSET, MEANS THE FULL VALUE O F THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET 6 AS REDUCED BY ANY EXPENDITURE INCURRED WHOLLY AND E XCLUSIVELY IN CONNECTION WITH SUCH TRANSFER. (2) WHERE THE ASSESSEE PURCHASES, WITHIN THE PERIOD OF 34 [TWO YEARS] AFTER THE DATE OF THE TRANSFER OF THE ORIGIN AL ASSET, OR CONSTRUCTS, WITHIN THE PERIOD OF THREE YEARS AFTER SUCH DATE, ANY RESIDENTIAL HOUSE, THE INCOME FROM WHICH IS CHARGEA BLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY, OTHER THAN THE N EW ASSET, THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRANSFER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST OF SUCH NEW ASSET AS PROVIDED IN CLAUSE ( A ), OR, AS THE CASE MAY BE, CLAUSE ( B ), OF SUB-SECTION (1), SHALL BE DEEMED TO BE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS RELATING TO LONG-TER M CAPITAL ASSETS OF THE PREVIOUS YEAR IN WHICH SUCH RESIDENTIAL HOUS E IS PURCHASED OR CONSTRUCTED. (3) WHERE THE NEW ASSET IS TRANSFERRED WITHIN A PER IOD OF THREE YEARS FROM THE DATE OF ITS PURCHASE OR, AS THE CASE MAY BE, ITS CONSTRUCTION, THE AMOUNT OF CAPITAL GAIN ARISING FR OM THE TRANSFER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST OF SUCH NEW ASSET AS PROVIDED IN CLAUSE ( A ) OR, AS THE CASE MAY BE, CLAUSE ( B ), OF SUB-SECTION (1) SHALL BE DEEMED TO BE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS RELATING TO LONG-TERM CAPITAL ASSETS OF THE PREVIOUS YEAR IN WHICH SUCH N EW ASSET IS TRANSFERRED.] 35 [(4) THE AMOUNT OF THE NET CONSIDERATION WHICH IS N OT APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE O F THE NEW ASSET MADE WITHIN ONE YEAR BEFORE THE DATE ON WHICH THE T RANSFER OF THE ORIGINAL ASSET TOOK PLACE, OR WHICH IS NOT UTILISED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFORE TH E DATE OF FURNISHING THE RETURN OF INCOME UNDER SECTION 139 , SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN [SUC H DEPOSIT BEING MADE IN ANY CASE NOT LATER THAN THE DUE DATE APPLIC ABLE IN THE CASE OF THE ASSESSEE FOR FURNISHING THE RETURN OF INCOME UNDER SUB- SECTION (1) OF SECTION 139 ] IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED IN, AND UTILISED IN ACCORDANCE WITH, ANY SCHEME 36 WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, FRAME IN THIS BEHALF AND S UCH RETURN SHALL BE ACCOMPANIED BY PROOF OF SUCH DEPOSIT ; AND, FOR THE PURPOSES OF SUB-SECTION (1), THE AMOUNT, IF ANY, ALREADY UTILIS ED BY THE ASSESSEE FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET T OGETHER WITH THE AMOUNT SO DEPOSITED SHALL BE DEEMED TO BE THE COST OF THE NEW ASSET : PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SUB-SECTIO N IS NOT UTILISED WHOLLY OR PARTLY FOR THE PURCHASE OR CONST RUCTION OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTIO N (1), THEN, ( I ) THE AMOUNT BY WHICH ( A ) THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRANS FER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF 7 THE COST OF THE NEW ASSET AS PROVIDED IN CLAUSE ( A ) OR, AS THE CASE MAY BE, CLAUSE ( B ) OF SUB-SECTION (1), EXCEEDS ( B ) THE AMOUNT THAT WOULD NOT HAVE BEEN SO CHARGED HAD THE AMOUNT ACTUALLY UTILISED BY THE ASSESSEE FO R THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET WITHIN THE PERIOD SPE CIFIED IN SUB- SECTION (1) BEEN THE COST OF THE NEW ASSET, SHALL BE CHARGED UNDER SECTION 45 AS INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FR OM THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET EXPIRES ; AND ( II ) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW THE UNUTILISED AMOUNT IN ACCORDANCE WITH THE SCHEME AFO RESAID. EXPLANATION. 37 [ OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4- 1993. ]] 5. IF THE AFORESAID SECTION IS ANALYSED, IT IS CLEAR TH AT THE EXEMPTION IS SUBJECT TO THE PROVISION OF SUB-SECTION (4), MEANING THEREBY, THE AMOUNT OF NET CONSIDERATION IS TO BE APPROPRIATED TOWARD S THE PURCHASE OF NEW ASSET WITHIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF THE ORIGINAL ASSET TOOK PLACE OR IF NOT UTIL ISED FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFORE THE DA TE OF FURNISHING THE RETURN OF INCOME U/S 139, IT SHALL BE D EPOSITED (UNUTILISED PORTION) BY THE ASSESSEE, BEFORE FURNISHIN G SUCH RETURN, IN ANY ACCOUNT OR IN CAPITAL GAIN ACCOUNT IN THE BANK OR INSTITUTION AS SPECIFIED IN ANY SCHEME BY THE CENTRAL GOVERNMENT, BY NOTIFICATION IN THE OFFICIAL GAZETTE AND THE PROOF OF THE SUCH DEPOSIT IN THE CAPITAL GAINS TAX ACCOUNT SHALL BE ACCOMPANIED WHILE FILING THE RETURN. AS PER SUB-SECTION (1) TO SECTION 54F, THE CAPITAL GAIN AR ISES FROM TRANSFER OF ANY LONG TERM CAPITAL ASSET, THE ASSES SEE HAS TO INVEST 8 THE AMOUNT WITHIN A PERIOD OF ONE YEAR BEFORE SUCH TRANSFER OR WITHIN TWO YEARS AFTER THE DATE ON WHICH SUCH TRANS FER TOOK PLACE OR WITHIN A PERIOD OF THREE YEARS FOR CONSTRUCTION OF A RESIDENTIAL HOUSE (NEW ASSET) THEN THE CAPITAL GAIN SHALL BE DE ALT WITH IN ACCORDANCE WITH THE PROVISIONS OF SECTION 45 OF THE ACT OR AS THE CASE MAY BE. THE MAIN THRUST OF THE SECTION IS CONS TRUCTION OF A RESIDENTIAL HOUSE. HOWEVER, IN THE CASE OF THE ASSE SSEE, TILL TODAY, EVEN NO CONSTRUCTION HAS STARTED, THEREFORE, THE BE NEFIT OF THE EXEMPTION PROVIDED U/S 54F IS NOT AVAILABLE TO THE ASSESSEE. AT MOST, WE CAN SHOW A LIP SYMPATHY TO THE ASSESSEE BE CAUSE THE PLOT WAS NOT HANDED OVER TO THE ASSESSEE BY THE COLONISER/BUILDER, THEREFORE, NO INVESTMENT COULD B E MADE IN CONSTRUCTION OF THE HOUSE. AT THE SAME TIME, WE ARE OF THE VIEW THAT WHEN LANGUAGE USED IN THE SECTION IS VERY MUCH CLEAR, NO VIOLENCE IS PERMITTED TO THE LEGISLATION BY THE COU RTS, THAT TOO UNDER THE FACTS OF THE PRESENT APPEAL BEFORE US BEC AUSE THE ORIGINAL RETURN WAS FILED BY THE ASSESSEE ON 31.10. 2006 AND TILL THE HEARING OF THIS APPEAL, NO CONSTRUCTION OF THE NEW ASSET HAS YET STARTED. THE LEGISLATION IN ITS WISDOM HAS SPEC IFICALLY PROVIDED THE PERIOD OF THREE YEARS, THEREFORE, IT C ANNOT BE ENLARGED TO INDEFINITE PERIOD ESPECIALLY UNDER THE FACTS BEFORE US. 9 THE ASSESSEE THOUGH DEPOSITED RS.2,61,429/- WITH OM EX LIMITED FOR PURCHASE OF PLOT BEFORE FILING THE RETURN BUT T HE OWNERSHIP OF THE PLOT WAS NOT TRANSFERRED TO THE ASSESSEE EVEN T ILL DATE. NEITHER THE OMEX LIMITED GAVE THE POSSESSION OF THE PLOT TO THE ASSESSEE NOR ANY REGISTRATION OF THE SAID PLOT WAS MADE IN T HE NAME OF THE ASSESSEE. THE EXEMPTION U/S 54F OF THE ACT IS AVAIL ABLE FOR INVESTMENT FOR CONSTRUCTION OF A RESIDENTIAL HOUSE, WHEREAS THOUGH THE ASSESSEE DEPOSITED THE PART OF THE CONSI DERATION FOR PURCHASE OF THE PLOT BUT TILL DATE, NOT TO TALK OF CONSTRUCTION EVEN THE POSSESSION OF PLOT WAS NOT HANDED OVER TO THE A SSESSEE. THERE IS AN UNCONTROVERTED FINDING IN THE IMPUGNED ORDER THAT EVEN THE PLOT WAS NOT REGISTERED IN THE NAME OF THE ASSESSEE , CONSEQUENTLY, IN THE ABSENCE OF THE PLOT, NO CONSTR UCTION ACTIVITY CAN BE STARTED. MORESO, THE STIPULATED PERIOD OF TH REE YEARS HAD ALREADY EXPIRED WHEN THE REVISIONAL JURISDICTION BY THE LD. CIT WAS INVOKED BECAUSE THE ASSESSEE FILED THE ORIGINAL RETURN ON 31.10.2006 AND THE REVISIONAL ORDER IS DATED 17.3.2 011. THE ASSESSEE WAS EXPECTED TO INVEST THE CAPITAL GAIN AM OUNT OR PART THEREOF BEFORE FILING THE RETURN I.E. 31.10.2006. E VEN IT IS NOT THE CASE THAT CONSTRUCTION HAS ALREADY TAKEN PLACE AND SUBSTANTIAL PORTION OF THE CAPITAL GAIN HAS BEEN INVESTED BY TH E ASSESSEE. 10 SECTION 54F EMPHASISES ON CONSTRUCTION OF A RESIDEN TIAL HOUSE AND SUCH CONSTRUCTION MUST BE REAL ONE. THUS, THE R ATIO LAID DOWN BY HON'BLE MADRAS HIGH COURT IN CIT VS. V. PRA DEEP KUMAR (2006) 153 TAXMAN 138 AND THE HON'BLE RAJASTHAN HIG H COURT IN USHA GUPTA VS. CIT (2006) 204 CTR (RAJ) 399 GOES IN FAVOUR OF THE REVENUE. SO FAR AS THE CASES RELIED UPON BY THE ASSESSEE ARE CONCERNED, THESE ARE BEING ON DIFFERENT FACTS, THER EFORE, MAY NOT HELP THE ASSESSEE. 6. SO FAR AS INVOKING THE JURISDICTION U/S 263 OF T HE ACT IS CONCERNED, IT CAN BE INVOKED WHEN THE ASSESSMENT OR DER IS EITHER ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. BOTH THE CONDITIONS OF ORDER BEING ERRONEOUS AS WELL AS PREJUDICIAL TO INTEREST OF REVENUE IS REQUIRED TO BE SATISFIED. TH ERE HAD BEEN JUDICIAL DEBATE ON THE WORD PREJUDICE TO THE REVEN UE. ONE VIEW IS THAT IT DOES NOT NECESSARILY MEAN LOSS OF REVENU E AND THE EXPRESSION IS NOT TO BE CONSTRUED IN A PETTIFOGGING MANNER AND MUST BE GIVEN A DIGNIFIED CONSTRUCTION. ANOTHER VIE W IS THAT EVEN IF ONE ITEM IS FOUND PREJUDICIAL TO THE INTEREST OF THE REVENUE, THE ORDER CAN BE REVISED. HOWEVER, BOTH THE TWIN CONDIT IONS, ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE, MUST BE SATISFIED BEFORE INVOKING THE REVISIONAL JURISDICTI ON BY THE LD. CIT. 11 WHAT IT MAY BE WE ARE OF THE VIEW THAT ALLOWING UNP ROVED DEDUCTION/EXEMPTION NOT ONLY RENDERS THE ORDER OF A SSESSING OFFICER ERRONEOUS BUT ALSO PREJUDICE THE INTEREST O F REVENUE. IF THE FACTS OF THE PRESENT APPEAL ARE KEPT IN JUXTAPO SITION WITH THE JUDICIAL SCRUTINY, WE FIND THAT THESE TWIN CONDITIO NS ARE EXISTING IN THE PRESENT APPEAL, THEREFORE, WE FIND JUSTIFICA TION IN INVOKING THE REVISIONAL JURISDICTIONAL U/S 263 OF THE ACT BY THE LD. CIT, CONSEQUENTLY, WE ARE IN AGREEMENT WITH THE ORDER OF THE LD. CIT IN DIRECTING THE ASSESSING OFFICER TO REWORK THE TOTAL INCOME OF THE ASSESSEE. THE IMPUGNED ORDER IS AFFIRMED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY, 2012. SD SD (R.C. SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25.1.2012 COPY TO:APPELLANT/RESPONDENT/CIT/CIT(A)/DR/GUARD FI LE !VYS!