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Tribunal overturns CIT's decision under s.263, citing lack of jurisdiction. The Tribunal allowed the Assessee's appeal, quashing the CIT's order under s.263. It held that the CIT did not properly exercise jurisdiction as the AO's ...
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Tribunal overturns CIT's decision under s.263, citing lack of jurisdiction.
The Tribunal allowed the Assessee's appeal, quashing the CIT's order under s.263. It held that the CIT did not properly exercise jurisdiction as the AO's order was not shown to be erroneous or prejudicial to revenue. The Tribunal found that the AO had considered all evidence before adding GP on unrecorded sales, and lack of detailed reasons in the assessment order did not imply lack of enquiry. Previous court decisions supported the Assessee's stance, leading to the quashing of the CIT's order under s.263.
Issues: Appeal against order dated 25.3.2013 by CIT, Kolkata-XIV-Kolkata u/s.263 of the Act for AY 2006-07.
Analysis: The Assessee, an individual dealing in auto parts, filed a return for AY 2006-07. A survey revealed unrecorded sales transactions, leading to proceedings u/s.147 initiated in 2009. The AO found unrecorded sales of Rs. 2,26,293 and applied 17% GP on it, adding Rs. 38,470 to total income. The CIT under s.263 contended that entire sales or unrecorded purchases should be added as income. Assessee argued that only GP on unrecorded sales should be added, citing trade practices. CIT set aside the assessment order, directing a fresh assessment.
The Assessee contended that the AO had considered all evidence before adding GP on unrecorded sales, and CIT's intervention was unwarranted. The Tribunal noted that AO had examined the issue, and lack of detailed reasons in the assessment order did not imply lack of enquiry. The AO's decision was deemed one of the possible views, and CIT's dissatisfaction did not justify invoking s.263. Previous court decisions supported the Assessee's stance, leading the Tribunal to quash the CIT's order under s.263.
Therefore, the Tribunal held that the CIT did not properly exercise jurisdiction under s.263, as the AO's order was not shown to be erroneous or prejudicial to revenue. The appeal by the Assessee was allowed, quashing the order under s.263.
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