TaxTMI 
TaxTMI 
2012 (10) TMI 427
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....The shares were purchased on 26th Sept., 2002 @ Rs. 5.52 per share and the same were sold on 18th Dec., 2003 @ Rs. 99.50 per share. 3. The CIT, exercised suo motu revisional jurisdiction under s. 263 of the Act, holding that the view taken by the AO was erroneous and prejudicial to the interest of the Revenue. In view of the unusual increase in the prices of shares within a short period of 15 months, the AO was required to apply his mind as to the genuineness of the prices at which the shares were allegedly purchased and sold. The shares did not belong to any well-known company and purchase price was paid by the assessee in cash. The identity of the person from whom the shares were purchased and the identity of the person to whom the sha....
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....0) 47 DTR (Gau) 218 : (2010) 327 ITR 467 (Gau). The view earlier taken in Rqjendra Singh vs. Superintendent of Taxes and Ors. (1990) 79 STC 10 (Gau) that jurisdiction under s. 263 could be exercised only in cases of jurisdictional error was explained to the effect that the expression "jurisdictional error" was used in wider sense as including error on account of wrong assumption of fact, incorrect application of law and non-application of mind. The matter was, accordingly, directed to be placed before the Division Bench. 8. IT Appeal No. 2 of 2008 [reported at CIT us. Jawahar Bhattacharjee (2012) 249 CTR (Gau) 529 : (2012) 70 DTR (Gau) 208-Ed.], has been disposed of today by a separate order, holding that exercise of jurisdiction by the ....
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....ror in approach as also in appraisal of the facts, which led to an error in computation as well. The basic enquires, which an AO is expected to make in these circumstances, were omitted to be made in this case. The AO should have enquired about the existence of the company and obtained its complete address and telephone numbers. He should also have obtained the annual accounts of the company as on 31st March, 2003 and 31st March, 2004 so as to satisfy himself if the commercial activities of the company justified such a jump in the prices of shares. The price quotations of the shares on various dates during the check-period should also have been examined to ascertain the reasonableness of the jump. What was more important is that the AO shou....
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....n expected from an AO would depend on the volume of business and quantum of income. When a small case is fixed and the AO calls for details, examines the same and passes a brief order accepting the returned income, that would not lead to treat the order as erroneous. It is not the case of the CIT that the claim made by the assessee is not in accordance with law. The only objection of the CIT was that the AO before allowing such claim did not call for and examined the details which, according to the CIT, were required to adopt the right view. To reiterate, the AO after hearing the assessee on several occasions and examining the details requisitioned by him framed the assessment under s. 143(3) of the Act." 12. Learned counsel for the asse....
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....s certainly permissible. Reference may be made to the decision of the Full Bench referred to above, relying on the earlier judgments, including the judgment of the Hon'ble Supreme Court in Malabar Industrial Co. Ltd. vs. CIT (2000) 159 CTR (SC) 1 : (2000) 243 ITR 83 (SC). 15. The present case is not a case where the CIT has sought to substitute his opinion for that of the AO but a case where the order of the AO suffers from non-application of mind. The AO failed to make basic enquiry required to be made when there was unusual increase of prices of shares purchased by the assessee by cash and the identity of the persons from whom the shares were purchased and to whom the shares were sold, was not ascertained nor the broker examined. The s....