CAN ASSESSEE CLAIM INDEXED COST OF IMPROVEMENT FOR FIRST TIME IN REVISION APPLICATION U/S 264?
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Short note of today's case law for quick reference:
[2024] 464 ITR 367 (Bom)
[IN THE BOMBAY HIGH COURT]
PRAMOD R. AGRAWAL
v.
PRINCIPAL COMMISSIONER OF INCOME-TAX AND OTHERS
1. Sale of inherited flat by assessee and three others.
2. Assessee omitted indexed cost of improvement in return of income and assessment was completed u/s 143(3).
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3. Assessee filed rectification application u/s 154 which was rejected.
4. Assessee filed revision application u/s 264 against order of section 154 within one year.
5. Both rectification u/s 154 & revision u/s 264 were rejected that new claim not raised earlier.
6. Assessing Officer accepting indexed renovation expenses in case of co-owner.
7. Assessee filed writ against rejection of 264 application.
8. High Court held that:
Amount accepted in co-owner’s case to be accepted as correct and allowance to be made while computing long term capital gains in assessee’s case.
9. Matter remanded to CIT for denovo consideration.
10. Section 264 confers wide jurisdiction on commissioner.
11. The proceedings under section 264 are intended to meet a situation faced by an aggrieved assessee, who is unable to reach or approach the appellate authorities for relief and has no other alternate remedy available under the Act.
12. The Commissioner is bound to apply his mind to the question whether the assessee was taxable on that income and his powers are not limited to correcting the error committed by the sub-ordinate authorities but could even be exercised where errors are committed by assessee.
13. It would even cover situation where the assessee because of an error has not put forth legitimate claim at the time of filing the return and the error is subsequently discovered and is raised for the first time u/s 264 of the Act.