TaxTMI 
TaxTMI 
2019 (4) TMI 958
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.... and the submissions made to the assessing officer during the course of the assessment indicate otherwise. 3. The learned Pr. Commissioner of Income Tax erred in not appreciating the fact that the assessing officer had issued notices under sec. 142(1) calling for various details and the appellant had complied with the same by furnishing requisite information / documents including the confirmation of loans accepted by the appellant. Therefore the observation of the learned Commissioner that the assessment was completed without enquiry was incorrect. 4. The appellant craves leave to add, alter or amend any of the grounds of appeal at any time before the time of hearing. 2. The brief facts of the case are that assessment in the above case for AY 2013-14 was finalized u/s. 143(3) of the I.T. Act, 1961 on 16.10.15 at income of Rs. 49,48,610/- accepting the return income of the assessee. Later on Ld. CIT passed order u/s 263 of the I.T Act dated 02.03.17 thereby setting aside the assessment made by the AO u/s 143(3) with direction to make the same afresh. Aggrieved by the order of Ld. CIT passed u/s 263 of the I.T. Act, the assessee preferred the present appeal be....
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.... order, the submission of the assessee that the said details were placedon record and verified by the AO cannot accepted. 7. The AO has not verified the genuineness of loan confirmation with bank statementsand creditworthiness of the lender is not established during the course of assessment proceedings. Hence the assessment order passed by the AO is erroneous and prejudicial to the interest of revenue, The Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd Vs CIT reported in 243 ITR 83(SC) has categorically held that if due to an erroneous order,the Revenue is losing tax lawfully payable by a person; it will certainly be prejudicial to the interest of revenue. It was further held that once AO accepted the claim of assessee without making an enquiry, the order of the AO is erroneous and the exercise of jurisdiction by CIT u/s 263 is justified. In the case of Gee Vec Enterprises Vs Addl. CIT reported in 99 ITR 375, the Hon'ble Delhi High Court has held that the ITO being not only an adjudicator but also an investigator, he cannot remain passive in the face of a return which is apparently in order but calls for further enquiry in the facts & circumstances....
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....vidence which was placed on record by the assessee on the queries raised by the AO during the original assessment. As far as the unsecured loan is concerned, our attention was drawn by the AR towards balance sheet wherein the total unsecured loans were mentioned. Apart from that, Ld. AR also drawn our attention to the documents containing the particulars of the persons from whom 'unsecured loans' were received. Ld. AR has also placed on record the ledger account of Shri Satish Chander Gupta, wherein the payment of 'unsecured loan' is reflected. 8. We have also gone through the submissions dated 25.02.17 filed by the assessee before Ld. CIT(A) which are at page no. 3 & 4 of the paper book and submission dated 31.07.15 filed by the assessee before the AO in pursuance of notice u/s 142(1) dated 07.07.15 which are at page no. 5 to 91 of the paper book and subsequent submission dated 22.09.15 filed by the assessee before the AO in pursuance of notice u/s 142(1) dated 10.09.15 which are at page no. 92 to 107 of the paper book. Apart from this, the assessment order for AY 2012-13, 2013-14 and 2014-15 have been placed at page no. 108 to 114 of the paper book. We find that all the docume....
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....enquiry"-If there is an enquiry, even inadequate, that would not by Itself give occasion to the CIT to pass order under s. 263, merely because he has a different opinion in the matter-Such a course of action is open only In cases of "lack of enquiry"-Contention of the Revenue. that the AO did not consider as to whether the expenditure in question was capital or revenue expenditure cannot be accepted-Although apparently the assessment does not give any reasons for allowing the entire expenditure as revenue expenditure, that by itself would not be indicative of the fact that the AO has not applied his mind to the issue-AO is not required to give detailed reason in respect of each and every item of deduction in the assessment order-AO had called for explanation regarding this very item and the assessee had furnished its explanation-This fact has been noticed by the CIT himself in his order-Thus, it cannot be said that it is a case of 'lack of enquiry'- Further, even the CIT was not clear as to whether the said expenditure is to be treated as capital or revenue expenditure-Dyes used by the assessee, a manufacture of car parts, are the components of the machines and need constan....
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....ew. 14. After considering the entire facts of the present case as well as orders passed by Ld. CIT u/s 263 of the I.T. Act, we are of the view that there must be material before the Commissioner to satisfy himself that two requisite conditions were present before invoking the provisions u/s 263 of the Act, otherwise the powers u/s 263 of the Act cannot be exercised at the whims and caprice of the Commissioner. We have also seen the paper book filed by the assessee and the documents/papers contained /mentioned therein, were duly made available before the AO before framing the assessment u/s 143(3) of the Act. Admittedly, an incorrect assumption of fact or an incorrect application of law would satisfy the requirement of order being erroneous u/s. 263 of the Act. The phrase "prejudicial to the interest of the Revenue" u/s. 263 of the Act, has to be read in conjunction with the expression "erroneous‖ order by the Assessing Officer. Every loss of Revenue as a consequence of assessment order cannot be termed as 'prejudicial to the interest of Revenue‟, meaning thereby, ―prejudice" must be prejudice to the Revenue administration. At the same time, if another view is p....