TaxTMI 
TaxTMI 
2019 (9) TMI 206
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....dt. 22/02/2019, proposing to revise the order of assessment passed u/s 143(3) of the Act on 06/12/2016. The assessee gave a detailed reply vide letter dt. 08/03/2019. She has filed a number of enclosures along with this reply. The ld. Pr. CIT, passed an order u/s 263 of the Act on 28/03/2019, revising the assessment order passed u/s 143(3) of the Act on 06/12/2016, by holding that the said assessment order is erroneous, insofar as, it is prejudicial to the interest of the revenue. He set aside the assessment order only to the extent of the observations made in this order u/s 263 of the Act and directed the Assessing Officer to pass a fresh assessment order by taking into account the facts and legal position as discussed by the ld. Pr. CIT-8, Kolkata, in the impugned order passed u/s 263 of the Act. 3. Aggrieved the assessee is in appeal before us. 4. The ld. Counsel for the assessee, Shri Siddhartha Jhajharia, submitted that the order passed u/s 263 of the Act is bad in law for the reason that a) The ld. Pr. CIT held that this is a suspicious sale transaction and while doing so, he did not rely on any evidence whatsoever that made him come to such a conclusion. Thus, it is his ....
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....Pr. CIT had made a factual mistake in holding that the assessee claimed capital loss on the purchase and sale of the said shares of M/s. Goodwill Griha Nirman Pvt. Ltd., despite the assessee verifying the same. He relied on a number of case-law in support of his contentions, which we would be referring to, as an when necessary. 5. The ld. CIT D/R, Dr. P.K. Srihari, on the other hand, supported the order of the ld. Pr. CIT and submitted that a perusal of the assessment order demonstrates non application of mind by the Assessing Officer. He argues that it is mandatory on the part of the Assessing Officer to record reasons as to why a particular view has been taken on the facts of this case. He submits that Explanation 2(a) to Section 263 of the Act, comes into play. He relied on notice issued by the ld. Pr. CIT u/s 263 of the Act and the order passed u/s 263 of the Act and case-law referred to in the order by the ld. Pr. CIT and submitted that the order of the ld. Pr. CIT is required to be upheld. 6. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case ....
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....cessary details. Under these circumstances, the presumption is that the Assessing Officer has examined the transactions in question. Non discussion or brief discussion of the issue by the Assessing Officer in the assessment order, under these facts and circumstances of the case, does not lead us to a conclusion that there is non application of mind to the issue on hand, specifically when voluminous details were obtained by the Assessing Officer after raising specific queries on the issue. 7.1.2. The Hon'ble Jurisdictional High Court in the case of Principal Commissioner of Income-tax-5, Kol. v. Ivory Consultants (P.) Ltd. [2018] 96 taxmann.com 539 (Calcutta) held as follows:- "Section 43(5), read with sections 73 and 263, of the Income-tax Act, 1961 - Speculative transactions (Derivatives) - Assessment year 2011-12 - In course of assessment, Assessing Officer made sufficient inquiries on derivative loss claimed as a business loss by assessee - After said inquiries Assessing Officer completed assessment holding that loss from derivative's was a genuine loss and had to be allowed as a normal business loss - However, Commissioner (Appeals) passed an order under section 263 sett....
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....urn, filed by the assessee, was in accordance with law, he was under no obligation to justify as to why was he satisfied. On the top of that the Assessing Officer by his order dated 28th March, 2008 did not adversely affect any right of the assessee nor was any civil right of the assessee prejudiced. He was as such under no obligation in law to give reasons. The fact, that all requisite papers were summoned and thereafter the matter was heard from time to time coupled with the fact that the view taken by him is not shown by the revenue to be erroneous and was also considered both by the Tribunal as also by us to be a possible view, strengthens the presumption under Clause (e) of Section 114 of the Evidence Act. A prima facie evidence, on the basis of the aforesaid presumption, is thus converted into a conclusive proof of the fact that the order was passed by the assessing officer after due application of mind. Meerut Roller Flour Mills Pvt. Ltd. vs. C.I.T., ITA No. 116 /Coch/ 2012; CIT vs. Infosys Technologies Ltd., 341 ITR 293 (Karnataka); S.N. Mukherjee vs. Union of India, AIR 1990 SC 1984; A. A. Doshi vs. JCIT, 256 ITR 685; Hindusthan Tin Works Ltd. Vs. CIT, 275 ITR 43 (Del), di....
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.... error has resulted in prejudice to the interests of the revenue. As is clear from the language of section 263, there has to be a proper application of mind by the Commissioner to come to a firm conclusion that the order of the Assessing Officer is erroneous and prejudicial to the interests of the revenue. Thus, two conditions need to be satisfied for invoking such a power by the Commissioner, which are: i) the order sought to be revised by the Assessing Officer is erroneous; and ii) it is prejudicial to the interest of the revenue [Para 7] It is clear from the above that where two view are possible and the Assessing Officer has taken one view and the Commissioner again revised the said order on the ground that he does not agree with the view taken by the Assessing Officer, in such circumstances the assessment order cannot be treated as an order erroneous or prejudicial to the interest of the revenue. Reason is simple. While exercising the revisionary jurisdiction, the Commissioner is not sitting in appeal. [Para 9]" 7.1.6. Applying the propositions of the law laid down in the above case-law to the facts of this case, we have to necessarily hold that the exercise u/s 263 of ....
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....larpuria, who passed away on 07/04/2012 and that the impugned shares were transmitted to the assessee through "will" which was probated and hence, the question of producing purchase bills does not arise and that the cost of acquisition to Late Shri Rakesh Salarpuria, was the cost of acquisition to the assessee. It was further submitted that this transfer of shares were at a price as valued by a chartered accountant and under those circumstances, the allegation that this is a suspicious sale transaction is baseless. It was further submitted that the value of the shares was based on the intrinsic value of assets held by the company and hence the sale value was justified. This explanation supported by evidence proves the case of the assessee. These replies, in our view, were not properly considered by the ld. Pr. CIT. The allegations that the sale of shares transactions was suspicion is not supported by facts. No revision can take place based on mere suspicion. The ld. Pr. CIT has not controverted the submissions and evidences filed by the assessee. When the assesee has furnished all the details, including the purchase details and sale details, the ld. Pr. CIT has not explained, as t....
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....uiry", that such a course of action would be open. In Gabriel India Ltd.'s case (supra), law on this aspect was discussed in the following manner : ". . . From a reading of sub-section (1) of section, it is clear that the power of suo motu revision can be exercised by the Commissioner only if, on examina-tion of the records of any proceedings under this Act, he considers that any order passed therein by the Income-tax Officer is 'erroneous insofar as it is prejudicial to the interests of the revenue'. It is not an arbitrary or unchartered power. It can be exercised only on fulfilment of the requirements laid down in sub-section (1). The consideration of the Commissioner as to whether an order is erroneous insofar as it is prejudicial to the interests of the revenue must be based on materials on the record of the proceedings called for by him. If there are no materials on record on the basis of which it can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. The Commissioner cannot initiate proceedings with a view to starting fishing and rov....
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....ax Officer in this case had made enquiries in regard to the nature of the expenditure incurred by the assessee. The assessee had given detailed explanation on that regard by a letter in writing. All these are part of the record of the case. Evidently, the claim was allowed by the Income-tax Officer on being satisfied with the explanation of the assessee. Such decision of the Income-tax Officer cannot be held to be "erroneous" simply because in his order he did not make an elaborate discussion in that regard." 9.1. The Hon'ble Delhi High Court in the case of DIT vs. Jyoti Foundation (supra) , it has been held as follows:- "The order under Section 263 itself records that the Director felt that the inquiries were not sufficient and further inquiries or details should have been called. However, in such cases, as observed in the case of ITO v. D.G. Housing Projects Ltd. [2012] 343 ITR 329/20 taxmann.com 587/[2013] 212 Taxman 132 (Mag.), the inquiry should have been conducted by the Commissioner or Director himself to record the finding that the assessment order was erroneous. He should not have set aside the order and directed the Assessing Officer to conduct the said inquiry." 9.2.....