COMMISSIONER OF INCOME TAX AND ORS. Vs. ANANDRAJ

JUDGEMENT

(1.) The Revenue has preferred this appeal against the order passed by the Tribunal granting benefit to the assessee under s. 54F of the IT Act, 1961. The assessee is assessed in the status of individual. He filed his return of income for the asst. yr. 2004 -05 on 31st Jan., 2005 declaring an income of Rs. 26,30,067 which included capital gain of Rs. 21,91,200. The assessing authority allowed the benefit under s. 54F of the Act to the assessee. The CIT invoked his powers under s. 263 of the Act and reviewed the order. The CIT found that the assessee had received a net consideration of Rs. 30,00,000 from the sale of agricultural land. The same was invested in a building and total investment of the building as on 31st March, 2004 was Rs. 34,03,531. The assessee had also availed a housing loan of Rs. 19,54,152 from Vijaya Bank. He was of the view the assessing authority has not taken into consideration the housing loan of Rs. 19,54,152 which was also invested in the construction of a house and therefore, he arrived at a conclusion that the order of the assessing authority is erroneous and prejudicial to the interest of the Revenue. After hearing the assessee, he set aside the order passed by the assessing authority and directed the assessing authority to make a fresh assessment taking into consideration the housing loan. Aggrieved by the said order the assessee preferred an appeal to the Tribunal. The Tribunal by the impugned order held that the benefit extended to the assessee was strictly in conformity with s. 54F of the Act. There is no scope for the different interpretation as sought to be made out by the revisional authority and therefore, he allowed the appeal setting aside the order passed by the revisional authority. Aggrieved by the said order, the Revenue is in appeal.

(2.) The appeal was admitted to consider the following substantial question of law :

(3.) The learned counsel for the Revenue assailing the impugned order contended that even if it is to be held that the assessee is entitled to the benefit of s. 54F of the Act, the fact that he has raised a housing loan for the purpose of construction and he is claiming benefit of deduction of tax paid on housing loan if granted, would result in double benefit and therefore, he submits that the revisional authority was justified in invoking its power under s. 263 of the Act and setting aside the order of the assessing authority, which order has been very rightly interfered with by the Tribunal.