TaxTMI 
TaxTMI 
2021 (2) TMI 125
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..... 5,98,08,120/-. Later, this assessment was sought to be revised by the ld. PCIT by invoking revisionary jurisdiction u/s.263 of the Act on the ground that assessee had long term borrowings of Rs. 8,62,57,029/- and other current liabilities of Rs. 86,30,91,880/- which were not verified by the ld.AO while completing the assessment proceedings. Non-verification of the said details and non-enquiry thereon had caused prejudice to the interests of the revenue and also making the order of the ld. AO erroneous in the mind of the ld. PCIT. Accordingly, he passed revision order u/s.263 of the Act on 14/02/2020. 4. Aggrieved, the assessee is in appeal before us. 5. We find that the ld. AR primarily submitted that the very same issue of long term borrowings and other current liabilities was indeed subject matter of enquiry / verification by the ld. AO in the scrutiny assessment proceedings. We find from pages 1-2 of the paper book containing 63 pages filed before us, the notice issued by the ld. AO u/s.142(1) of the Act together with the show-cause notice and questionnaire calling for various details from the assessee. In that, we find that questions Nos. 1 & 2 specifically point out th....
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..... AO on examination of the same had arrived at the right conclusion that those liabilities are indeed genuine and had accordingly resorted not to make any addition thereon. Merely because there is no discussion in the assessment order regarding a particular item enquired by the ld. AO, it does not make the order of the ld. AO erroneous. It is very well settled that the ld. AO could be expected to address only those issues on which he is not in agreement with the submissions / claims made by the assessee in the return of income. Hence, only disputed issue is the subject matter of discussions in the assessment order. We hold that the ld. AO is not required to write a thesis and record his finding in the assessment order on the aspects which he is accepting. What is required for the purpose of initiation of Section 263 proceedings is that whether due enquiries were indeed carried out by the ld. AO on a particular issue. If those enquiries have been made and the assessee had duly complied with the same by furnishing requisite details with all evidences, and the ld. AO if he is satisfied with those details could take the same to the logical conclusion by not making any addition thereon ....
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....ieved. In fact the Gujarat High Court in CIT v. Nirma Chemical Works Ltd. reported in 309 ITR 67 has observed that if an assessment order were to incorporate the reasons for upholding the claim made by an assessee, the result would be an epic tome and not an assessment order. In this case, during the assessment proceedings for both the Assessment Years, the Assessing Officer issued a query memos to the assessee, calling upon him to justify the genuineness of the gifts. The Respondent-Assessee responded to the same by giving evidence of the communications received from his father and his sister i.e. the donors of the gifts along with the statement of their Bank accounts. On perusal, the Assessing Officer was satisfied about the identities of the donors, the source from where these funds have come and also the creditworthiness/capacity of the donor. Once the Assessing Officer was satisfied with regard to the same, there was no further requirement on the part of the Assessing Officer to disclose his satisfaction in the Assessment Order passed thereon. Thus, this objection on the part of the Revenue, cannot be accepted. 8. It is next submitted that the donor had not been exami....
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....td., (supra) that as the Assessing Officer had not enquired into the source of the source of the gifts received by the Assessee, the Assessment Order is erroneous. The aforesaid decision holds that the power of Revision under Section 263 of the Act would normally be exercised in case of no enquiry and not in cases of inadequate enquiry. However, even in case of inadequate enquiry by the Assessing Officer, the order of the Assessing Officer could be erroneous in two classes of situation. The first class would be where orders passed by the Assessing Officer are ex-facie erroneous i.e. a decision rendered ignoring a binding decision in favour of the Revenue or where enquiry is per-se mandated on the basis of the record available before the Assessing Officer and that is not done. In the second class of cases, where the order is not ex-facie erroneous, then the CIT must himself conduct an enquiry and determine it to be so. The Court held that it is not permissible to the CIT while exercising power under Section 263 of the Act to remit the issue to the Assessing Officer to re-examine the same and find out whether earlier order of Assessment is erroneous. It is the CIT who must hold that ....
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.... that the facts on record per se mandated an enquiry to be made into the claim of the Assessee and not doing the same resulted in the order being erroneous. Thus, the Bachchan's case was a case where once the claim was withdrawn, then enquiry which was to be conducted, was aborted by the Assessing Officer. Therefore, a case of non-enquiry. It may have been different, if the Assessing Officer had enquired into the cash expenditure and its source as claimed, to come to his own conclusion and even accepted the stand of the Assessee. In such a case, even if the CIT would have taken a view that the satisfaction of the Assessing Officer is not correct, he would not have been able to exercise his powers of Revision under Section 263 of the Act. 12. In the present facts, the Assessing Officer was satisfied, consequent to making an enquiry and examining the evidence produced by the Assessing Officer, establishing the identity and creditworthiness of the donor as also the genuineness of the gift. The CIT in his order of Revision, does not indicate any doubts in respect of the genuineness of the evidence produced by the Assessee. The satisfaction of the Assessing Officer on the b....