TaxTMI 
TaxTMI 
2013 (7) TMI 315
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....00/-. Survey proceedings u/s 133A of the Act had been conducted at the business premises of the assessee on 8.12.2006. During survey proceedings, the assessee had made a surrender of Rs. 74 lakhs for A.Y. 2007-08. The assessee is pursuing the business of a property dealer. The ld. CIT, after calling for records of this A.Y., found that it is not only erroneous but also prejudicial to the interest of the Revenue. Accordingly, he has set aside the assessment order for making it afresh. Now the assessee has filed this appeal by raising the following grounds:- 1. That the order passed u/s 263 of the Income-tax Act, 1961 by the ld. CIT is bad in law, illegal and against facts. 2. That the ld. CIT erred in passing the order u/s 263 of th....
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....eply regarding Rs. 60,03,000/- and also in respect of other queries raised by the A.O. vide letter dated 16.12.2009 which are enclosed at pages 6,7 and 9 of assessee's paper book. The ld. CIT issued show-cause notice, copy of which is enclosed at pages 15 & 16 of assessee's paper book. Relevant portion of this show cause notice reads as under: - "1. The A.O. has completed the assessment in a routine manner without making proper enquiry and investigation regarding the investment and its source amounting to Rs. 60,03,000/- made by the assessee in the various properties during the year under consideration. The amount of surrender of Rs. 72.00 lakhs were made during the course of survey on account of advance paid for purchase of land situate....
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.... passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of the Revenue. Once he comes to the above conclusion on the basis of the 'material' that the order of the Assessing Officer is erroneous and also prejudicial to the interests of the Revenue, the CIT is empowered to pass an order as the circumstances of the case may warrant. He may pass an order enhancing the assessment or he may modify the assessment. He is also empowered to cancel the assessment and direct to frame a fresh assessment. He is empowered to take recourse to any of the three courses indicated in section 263. So, it is clear that the CIT does not have unfettered and unchequred discretion to revise an order. The CIT is required to exerci....
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.... (v) Every loss of revenue cannot be treated as prejudicial to the interest of the revenue and if the Assessing Officer has adopted one of the courses permissible under law or where two views are possible and the Assessing Officer has taken one view under with which the CIT does not agree, it cannot be treated as an erroneous order, unless the view taken by the Assessing Officer is unsustainable under the law. (vi) If while making the assessment, the Assessing Officer examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income, the CIT, while exercising his power under section 263, is not permitted to substitute his estimate of income in place of the income estimated by th....
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....surrendered income of Rs. 74 lakhs made by the assessee at the time of survey. Thus, it cannot be said that the A.O. has not applied his mind to this issue. In view of the legal position on this subject of revision to be made u/s 263 of the Act as discussed above, the ld. CIT cannot replace his opinion when the A.O. has taken one of the possible views after applying his mind to a specific item of income. The assessee had relied on various decisions in this regard which have also been considered by the A.O. The Hon'ble Jurisdictional High Court has taken similar view that when the A.O. takes a decision after going through the material available on record and after considering the explanation of the assessee, it cannot be said that he has not....