2013 (12) TMI 645

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....erroneous nor prejudicial to the interest of the Revenue. 3. Briefly stated the facts of the case are that the assessment for the year under consideration was completed u/s. 143(3) of the Act on 24.12.2009 determining the total income at Rs. 17,13,72,510/-. The assessee was allowed rebate u/s. 88E amounting to Rs. 4,36,22,334/-. The assessee filed rectification application u/s. 154 of the Act. It is the say of the assessee that while computing rebate u/s. 88E, the expenses allocated between STT paid transactions and other than STT paid transaction, the expenses of Rs. 11,35,02,222/- which included STT of Rs. 3,72,45,111/- should have been excluded. After verifying the records, the AO was of the view that there is a mistake apparent from ....

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.... the correct amount. It was also pointed out that the impugned assessment order had been subject matter of the appeal before the Ld. CIT(A) and the ITAT and therefore the impugned assessment order is presently merged with the order of the Ld. CIT(A) even though the ground was withdrawn by the petitioner. 6. After considering the facts and the submissions of the assessee, the Ld. CIT was of the opinion that the issue of allowing rebate u/s. 88E based on the apportionment of the income vis-à-vis brokerage income and treating income needs more careful examination , and accordingly directed to reframe the assessment denovo. 7. Aggrieved by this order of the CIT, assessee is before us. 8. The Ld. Counsel for the assessee strongly....

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....of the CIT stating that allocation of expenditure at the rate of 40% cannot be a basis every year and CIT has rightly directed the AO to denovo the assessment as the assessment order was not only erroneous but prejudicial to the interest of the revenue. 11. We have heard the rival submissions and perused the order of the lower authorities. It is not in dispute that the CIT has directed to reframe the assessment denovo holding that the issue of allowing rebate u/s. 88E needs more careful examination of the accounts of the assessee. It is a trite that there is a fine, though subtle, distinction between "lack of inquiry" and "inadequate inquiry". It is only in cases of lack of inquiry the Commissioner is empowered to exercise his revisional....

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....ich means that this is not a case of lack of enquiry. It is also not the case where it can be said that there was no application of mind before allowing the rebate in question. If there was any enquiry, even inadequate , that would not by itself give occasion to the Commissioner to pass order u/s. 263 of the Act merely because he has a different opinion in the matter. It is only in cases of lack of enquiry that such a course of action could be opened. For these observations, we draw support from the decision of Hon'ble Delhi High Court in the case of CIT Vs Sunbeam Auto Ltd., 332 ITR 167 (Delhi). 13. After considering the facts and the circumstances and carefully going through the order of the CIT u/s. 263, in our considerate view, the C....