TaxTMI 
TaxTMI 
1994 (3) TMI 153
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....eturn declaring a loss of Rs. 2,84,990. The assessment was completed on31st March, 1986determining the net loss carried over at the same figure of Rs. 2,84,990 as shown by the assessee. The company was incorporated on22nd Nov., 1982with the object of acquiring, dealing and holding shares, stocks, debentures, debenture stocks, carrying on business of hire purchase and financing the industrial enterprises by way of lending and advancing money, etc. The authorised capital of the company is Rs. 20,00,000 with two lakhs equity shares of Rs. 10 each. The authorised capital is made up of Rs. 8,00,000 through promoters' contribution and balance of Rs. 12,00,000 through public issue. From the assessment records it appeared to the CIT that genuinenes....
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....on no material except on suspicion and surmise. He has in fact set aside the assessment on alleged possibilities, without recording any categorical finding. His finding that the Assessing Officer while making assessment had overlooked the fact that though money had been advanced but no interest was credited, thus making the assessment order erroneous, is based on complete misconception of facts. There was absolutely no material with the CIT to hold that no attempt was made to verify the genuineness of the shares subscribed to the various shareholders. The CIT failed to appreciate that there was sufficient evidence to establish that the shares were allotted to the public in response to the applications received by the company and the subscri....
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....uced before the Revenue authorities including the source of capital as well as the provision of GIR and PAN numbers. The assessment was completed one and half years after filing of the return. Page 248 of the paper book is the notice issued by the revisionary CIT on3rd March, 1988under s. 263 of the Act to the assessee. Page 249 of the paper book is the reply of the assessee dt.19th March, 1988to the notice dt.3rd March, 1988, while the order of the CIT is dt.23rd March, 1988. It clearly reveals, according to the assessee, that the reply furnished by it was not considered by CIT. The reply of the assessee was sent by the post under postal certificate, a copy of which had also been furnished at pages 251 of the paper book as an evidence ther....
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....the certificates with reference to the allotment of shares applied for by the shareholders. Page 207 of the paper book is the details of purchases of shares. Our attention was also further drawn to page 26 of the paper book in regard to quotations in the list of Delhi Stock Exchange; page 40 of the paper book in regard to market quotation pertaining to equity shares; and page 43 thereof being the letter dt.12th April, 1983of the Delhi Stock Exchange Association Ltd. addressing the assessee-company. The grievance of the assessee further focussed before us was that if the CIT was not accepting the Assessing Officer's approach in making the assessment, then he could have had reference to certain assessees who are in Delhi locally for the purpo....
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.... contribution, his order required the Assessing Officer to enquire into the advances for which no interest was charged; and whether the purchase and sale of shares amounted to speculative business as well as whether the shareholders were genuine. In this connection it was emphasised before us that in the present case the absence of notice in respect of advances for which no interest has been charged and whether purchase and sale of shares constituted a speculative business, has rendered the order null and void, since if part of the order is vitiated on account of any defect the whole order would get vitiated by becoming null and void. In respect of this contention reliance is placed by the assessee on the decision in the case of Dhirajlal G....
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....willy nilly, merely looking to the productivity aspect of taxation. The jurisdiction of the CIT under s. 263 is undoubtedly a supervisory jurisdiction. It is intended for interference in special cases to counteract orders which are erroneous as well as prejudicial to the interests of the Revenue. In this context, therefore, the expression "prejudicial to the interests of the Revenue" must be regarded as involving a conception of acts or orders which are subversive of the administration of Revenue. There must be some grievous error in the order passed by the ITO, which might set a bad trend or pattern for similar assessments, which on a broad reckoning, the CIT might think to be prejudicial to the interests of Revenue administration. There m....