TaxTMI 
TaxTMI 
2017 (5) TMI 1266
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.... which were sold on 30.03.2009 for a consideration of Rs. 96,55,125/-. On sale of those share, the assessee claimed loss of Rs. 4,49,03,946/- under the head "Business Income". The Assessing Officer (AO) assessed the said loss at Rs. 4,49,03,946/- and allowed it to be carried forward as business loss. The ld CIT further mentioned that the assessee-company is engaged in the business of Real Estate Development and there has been no change in the nature of business during the year. Thus, the provision of explanation to section 73 of the Act is applicable to the share trading transaction during the year. The AO has treated the share trading loss as a business loss while completing the assessment order passed u/s 143(3) on 17.11.2011. The order passed by AO is erroneous and prejudicial to the interest of Revenue. The ld CIT issued a show-caused to the assessee as to why the assessment order be not cancelled/set-aside. The assessee contested the notice by filing detailed reply. The assessee in its reply contended that the AO during the assessment proceeding raised query relating to the applicability of section 73 of the Act, if the share trading loss as a speculation loss. The query of th....
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....ee, mere fact that the AO expressly not discussed the fact in the assessment order cannot be a ground to conclude that the income has escaped assessment. The AO made adequate enquiry before passing the order of assessment u/s 143(3) of the Act on 17.11.2011. The AO issued a questionnaire during the assessment and the assessee vide its reply dated 02.11.2011 and 05.11.2011 furnished the information and explanation with regard to investment in share of SPS Ltd. of 3,00,000 share of Rs. 5,75,70,135/- which have been converted into stock-in-trade. The assessee reported all the information in tax Audit Report. The AO also examined the applicability of section 73 of the Act. The assessee vide its reply dated 05.11.2011 before AO contended that section 73 is not applicable to the assessee-company as the only income of the company during the year under consideration is income chargeable under the head "Income from Other Sources". After considering the submission and explanation of assessee, the AO accepted the loss and allowed the same to be carried forward. The AO passed the detailed order on merit. The ld. CIT nowhere in the showcause referred that the AO passed the order without making ....
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....siness of assessee is Real Estate Development, whether provision of section 45(2) were applicable and the said loss be treated as speculation loss as per provisions of section 73. The ld. DR for the Revenue finally submitted that the order passed u/s 263 is proper and may be sustained by dismissing the appeal of the assessee. The ld. DR for the Revenue also relied upon the decision of Hon'ble Delhi High Court in CIT vs. Ashok Logani in ITA No. 553/2010 dated 11.05.2011. In rejoinder submission, the ld. AR of the assessee would submit that the case law relied by ld. DR for the Revenue is differ on fact of the present case. The ld. CIT has not given any showcause for section 45(3) of the Act. In support of his submission, the ld. AR for the assessee also relied upon the decision of Malabar Industries Co. Ltd. (supra). The decision of Mumbai Tribunal in Small Wonder Industries vs. CIT in ITA No. 2464/M/2013 dated 24.02.2017 and decision in case of Hon'ble Madras High Court in First Leasing Co. India Ltd. vs. CIT [ 134 ITR 641 (Mad.) ]. 4. We have considered the rival submissions of the parties and have gone through the record of various decision relied by the parties. Before consid....
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....ion may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the Supreme Court. Explanation.-In computing the period of limitation for the purposes of subsection (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded. The careful perusal of section 263 make it clear that, the Commissioner can pass an order, however he is required to give the assessee an opportunity of being heard. The Commissioner is required to record that the order made by assessing officer is erroneous insofar as it is prejudicial to the interest of the revenue. If in the fresh assessment, the assessing officer is entitled to examine item which does not form part of section 263 proceedings, the statutory requirement of framing an order under section 263 after giving the assessee an opportunity of being heard, stand obliterated or is made redundant. Furth....
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....ulfill the twin condition as contemplated under section 263 of the Act. The order of learned Commissioner is based on change of opinion. 6. We may also refer here that the assessing officer while passing/ framing assessment order performs a quasi-judicial function. The jurisdiction under section 263 can be exercised only when both the twin condition i.e. the order of assessing officer is erroneous and so far as prejudicial to the interest of revenue. These conditions are conjunctive as has been held by Hon'ble Supreme Courts in a Malabar Industrial Company Ltd (supra). Further, the order of assessing officer cannot be termed erroneous unless it is not in accordance with law. If assessing officer in accordance with law makes a certain assessment, it cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more deliberately. Section 263 does not visualize a case of substitution of judgment by the Commissioner for that of the assessing officer who passed the order unless the decision is held to be erroneous. Where the assessing officer has exercised the quasi-judicial power vested in him according to law and arrived at ....