https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=761436 https://www.taxtmi.com/caselaws?id=761436 Revision u/s 263 - non verification of accommodation entries receipts of assessee by the Assessing Officer - HELD THAT:- Reason for scrutiny selection is suspicious transactions relating to long-term capital gain on shares as per inputs from the investigation wing . Accordingly, during the course of original assessment proceedings, the assessing officer, on the basis of return of income and submissions and evidences filed by the assessee and discussions during the course of assessment proceedings, and after specifically inquiring into the aspect of bogus long-term capital gain on sale of shares of Safal Herbs Ltd, assessed the total income, without making any addition is and accepting the return of income as filed by the assessee. Therefore, evidently, the issue regarding accommodation entry regarding sale of shares of Safal herbs Ltd was to be enquired the course of original assessment proceedings and no additions were made by the assessing officer. We observe that the issue regarding alleged bogus accommodation entry had been examined both during the course of original assessment proceedings (refer original assessment order passed dated 23- 12-2016 u/s 143(3) of the Act) and again during the course of 147 proceedings (refer notice under section 147 of the Act dated 04-02-2022) wherein the issue for consideration was whether the assessee had made transactions as fictitious loan (entry operator beneficiaries) of Jignesh Shah -Therefore, it is seen that evidently the same issue has been again raised by the Principal CIT, when this issue had earlier been examined by the assessing officer of both during the course of original assessment proceedings and also in the course of 147 proceedings, and after thorough examination, no addition was made on this issue in the hands of the assessee. It is well settled law that recourse cannot be made to 263 proceedings, only with a view to enhance the scope of assessment / reassessment proceedings. Department has at various stages of proceedings (both during the course of regular assessment under section 143 (3) as well as under section 147 of the Act) have examined this issue and therefore, the contention of the principal CIT that there was lack of adequate enquiry, cannot be accepted. We observe that in the order passed by the principal CIT under section 263 of the Act, there is no specific finding to the effect as to where and in what manner, the order passed by the assessing officer under section 147 of the Act is erroneous insofar as prejudicial to the interests of the revenue. However, on going through the contents of the order passed under section 263 of the Act, it is observed that there is no finding in the 263 order as to why the order passed under section 147 of the Act is erroneous, insofar as prejudicial to the interest of revenue. ITAT in the case of Vinod Bhandari [ 2020 (3) TMI 1074 - ITAT INDORE] held that Commissioner before holding order of Assessing Officer as erroneous and prejudicial to interest of revenue should have to conduct necessary enquiries or verification in order to show that findings given by Assessing Officer are unsustainable in law. We observe that the principal CIT has given a specific finding that once the proceeding under section 147 of the Act have been initiated to verify information regarding accommodation entry, then the assessing officer was duty bound to verify the information and make addition on account of accommodation entry. However, in our considered view, Principal CIT has erred in facts and in law in giving attention to the assessing officer to make an addition in the hands of the assessee. Firstly, we observe that the 263 order has not pointed out to any specific infirmity/lack of enquiry by the assessing officer and has also not pointed out as to how the order passed under section 147 of the Act is erroneous and prejudicial to the interest of revenue and secondly, in the 260 order, the principal CIT has given a specific direction/finding that the assessing officer should have made additions on account of accommodation entry, taken by the assessee during the impugned year under consideration. Accordingly, in view of the facts highlighted before us, we hold that the order passed under section 263 by principal CIT is liable to be set aside - Decided in favour of assessee. Case-Laws Income Tax Thu, 29 Aug 2024 00:00:00 +0530