TaxTMI 
TaxTMI 
2019 (8) TMI 832
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....sed at Rs. 2,85,30,370/- Subsequently, the Commissioner invoked his revisionary jurisdiction and issued a notice u/s263 of the Act, dated 18.10.2013, proposing that the assessment order, dated 30.12.2011(supra),was erroneous in so far as it was prejudicial to the interests of the Revenue, in as much as the Assessing Officer ought to have made an addition of the entire loans/advances received from the company in which assessee was a major shareholder as per the provisions of section 2(22)(e) of the Act and should not have restricted the addition only to the extent of Rs. 2.30 crores. In this context, the relevant discussion by the Commissioner shows that his examination of assessment order showed that the assessee had received Rs. 7,79,24,880/- as loans and advances during the year from Nadiadwala Grandson Entertainment Pvt. Ltd. (hereinafter referred to as "NGEPL") in which he was a shareholder holding approximately 98% interest in the company. The Commissioner further noticed that accumulated profits of the NGEPL as on 31.03.2009 was Rs. 7,25,30,011/- and NGEPL was not a company in which public was substantially interested and, hence, Assessing Officer should have treated the enti....
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....e of purchase of car. On this basis, it has been argued that the order of the Commissioner is untenable in law. In support of his proposition, he has relied upon the following discussion in para 8 and 9 of the judgment of Hon'ble Jurisdictional High Court in the case of CIT vs. Fine Jewellery (India) Ltd. (supra): "8. We find that the impugned order of the Tribunal does record the fact that specific queries were made during the Assessment proceedings with regard to details of expenditure claimed under the head "miscellaneous expenses" aggregating to Rs. 2.94 crores. The respondent-assessee had responded to the same and on consideration of response of the respondent-assessee, the AO held that of an amount of Rs. 17.98 lakhs incurred on account of repairs and maintenance out of Rs. 2.94 cores is capital expenditure. This itself would be indication of application of mind by the AO while passing the impugned order. The fact that the assessment order itself does not contain any discussion with regard to the balance amount of expenditure of Rs. 1.76 crores i.e. Rs. 2.94 crores less Rs. 17.98 lakhs claimed as revenue expenditure would not by itself indicate non applicati....
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....ore in the assessment order dated 30.12.2011(supra). Thus, the Commissioner found the assessment order to be erroneous in so far as it is prejudicial to the interests of the Revenue for the aforesaid reason. 6. Now, we may touch upon the manner in which the Commissioner has justified the fulfilment of conditions prescribed in section 263 of the Act in his order. Pertinently, and as has also been explained by the Hon'ble Supreme Court in Malabar Industrial Co. Ltd. vs. CIT 243 ITR 83, invoking of section 263 of the Act can be justified only on satisfaction of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. It is trite position of law that even if one of the aforesaid conditions is absent in a given case, then invoking of section 263 of the Act would be untenable in law. In this background, we may now examine the manner in which the Commissioner has dealt with the conditions prescribed u/s. 263 of the Act in his order. The relevant discussion is contained at page 4 &5 of his order, which reads asunder: "The submissions of the assessee have been duly considered. H....
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....on of law the assessment order passed by him was definitely erroneous and prejudicial to the interest of revenue. Further submission of learned AR that the AO had taken one of the possible views and so his order cannot be revised u/s.263 is also not acceptable. In this case, the AO had not taken one of the possible views but he had made the addition of the smaller amount in contradiction to the conclusion made by himself. The judgments relied on by learned AR are not applicable to a situation where the AO makes the addition incontradiction to his own conclusion in the assessment order. So, none of the judgments is applicable to the facts of the case. Submission No. 3: This submission of learned AR of the assessee is also not acceptable as the issue before the CIT(A) was limited to the addition of Rs. 2,30,33,450/- and the present revision proceeding was initiated for addition beyond the said sum of Rs. 2,30,33,450/-. To sum up, the AO is directed to enhance the addition made u/s. 2(22)(e) by Rs. 49,71,263/- after verifying the facts & arithmetical calculation given by the assessee at page no.11 of the paper book." 7. Ostensibly, the Commissioner conclu....
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....ssment order. It should be read as a whole to understand as to whether or not the Assessing Officer has applied his mind on the facts before him. 8. On going through the order passed u/s 143(3) of the Act dated 30.12.2011 (supra), we find that the Assessing Officer after considering the plea of the assessee accepted that the transaction between the assessee and NGEPL was in the course of normal business, arrived at a conclusion that provisions of section 2(22)(e)of the Act are applicable only to the extent of funds utilised by the assessee for purchase of car and not for the balance amount. Thus, Assessing Officer has a possible view. 9. Per contra, the ld. DR relied upon the observation in the order passed u/s 263 of the Act to state that the Assessing Officer has not accepted anywhere in the assessment order that the loans/advances taken from the said company were utilized in the normal course of business. Though the assessee had made submission in this regard, the Assessing Officer had not accepted the same. As the quantum of addition made by him was not in accordance with the conclusion made by him and also the provision of law, the assessment order passed by him was defi....