2014 (9) TMI 728

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....7 & 3639/Del/2003 for the assessment year 1998-99 by the assessee as well as by the department. On 13.04.2007, a Co-ordinate Bench has admitted the Appeal No. 16 of 2004 on the following substantial questions of law:- "(I) Whether Ld. CIT, Meerut in the facts & circumstances of the case had jurisdiction to invoke the provision of Section-262 of I.T. Act particularly when order passed by the I.T.O. was neither erroneous, nor prejudicial interest or revenue. Therefore, Income Tax Appellate Tribunal is in error to conclude that CIT rightly acted U/S 263 and brought to tax the sum of which had been claimed as a loss by the assessee. (II) Whether in facts & circumstances of the case. Hon'ble Income Tax Appellate Tribunal in holding ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t index and made the said addition. The learned counsel submits that in fact, no jewellery was sold but it was converted into "stock in trade" as per the rate prevailing in the market. The assessee has shown the loss which was accepted by the A.O., but not by the C.I.T. The learned counsel also submits that the issue whether the capital gain is leviable either on transfer of capital goods or its conversion into "stock in trade"is debatable. When two views are possible then there is no question that the order was erroneous. Lastly, he submits that the order passed by the A.O. was neither erroneous nor it is prejudicial to the interest or revenue, so there was no occasion to pass the order by C.I.T. under Section-263 of the Act. On t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....llowing cases:- (I) Tech Span India Ltd Vs. I.T.O. 283 ITR 212 (Delhi); (II) C.I.T. Vs. Kelvinator of India 256 ITR 1 (Delhi). (III) Commissioner of Income-tax Vs. Max India Ltd. [2007]295 ITR 0282; (IV) Malabar Industrial Co. Ltd. Vs. Commissioner of Income- tax [2000] 243 ITR 0083; (V) Commissioner of Income-tax Vs. Mahendra Kumar Bansal; and (VI) Idea Cellular Ltd. Vs. Deputy Commissioner of Income-tax. In view of the above, we are of the opinion that the order passed by the A.O. is neither erroneous nor prejudicial to the interest of the revenue. Hence, we set-aside the impugned order passed by the Tribunal. In other words, the order of the A.O. is hereby restored as the same was neither erroneous nor prejudicial to....