ITAT held that PCIT cannot substitute his view for AO’s view u/s 263
ITAT held that PCIT cannot substitute his view for AO’s view u/s 263
Assessee co-operative society registered in India entered into a JV with Oman Oil. While completing the assessment, inter alia, AO allowed tax credit of a sum of Rs. 41.53 crores on dividend income of Rs. 134.41 crores received by assessee from the JV, under Article 25 of DTAA. PCIT issued show cause notice u/s 263. ITAT held that PCIT cannot substitute his view for AO’s view by invoking jurisdiction u/s 263, and the order u/s 263 was bad in law.
1. The assessee individual was a Non Resident. For the assessment year 2012-2013 the assessee filed return of income admitting total income of Rs 53,622/-. Subsequently, the case was selected for scrutiny and notices u/s.143(2) and 142(1) of the Act alongwith questionnaire were issued to the assessee. In compliance to the notices, the ld. Authorised Representative of the assessee appeared from time to time and submitted details. The Assessing Officer after hearing the submissions and based on information on record found that assessee has sold House site at Tambaram, vide Regd. Sale Deed dated 16.02.2012 for a consideration of Rs 1 Crore and the assessee has made investment u/Sec.54 EC of the Act in Capital Gains Bonds of Rural Electrification Corporation and NHAI total aggregating to Rs 91,00,000/. The Assessing Officer found that the assessee had invested Long term capital gain to claim exemption u/s.54EC and concluded that investment in Capital Gain Bonds by an assessee during any Financial year should not exceed Fifty lakhs. In view of investment made in two Financial years, the ld. Assessing Officer had restricted Rs 50,00,000/- to one Financial Year and made an additions of Rs 41,00,000/- and raised demand.
2. CIT(A) upheld the order of the Assessing Officer.
3. On appeal, the ITAT held as under:
4. We heard the rival submissions of both the parties, perused the material on record and also judicial citations quoted. The assessee has invested in long term capital gains within six months from the date of transfer u/s.54EC of the Act in Rural Electrification Corporation and National Highway Authority of India capital gain bonds and complied with the provisions and there is no dispute about the investment. The Assessing Officer tried to make a distinction of provisions for restricting investment of Rs 50,00,000/- only in one financial year. The assessee has invested in two installments falling in two financial years and availed tax exemption. We after considering the apparent facts and also respectfully rely on the jurisdictional High Court in the cases of C. Jaichander 370 ITR 579 (Supra) and CIT vs. Coramandel Industries Ltd 370 ITR 586 (Supra) setaside the order of the Commissioner of Income Tax (Appeals) and direct the Assessing Officer to delete the addition and allow the ground of the assessee.”
Case Reference-BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. Nos. 6785 & 6786/Del/2015 A.Yrs. : 2010-11 & 2011-12 M/s Krishak Bharati Cooperative VS. ACIT,
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "H", NEW DELHI
