TaxTMI 
TaxTMI 
2021 (11) TMI 924
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....in comparison to very high investments. ii) Large increase in investment in unlisted equities during the year. iii) Low income in comparison to high loans/ advances/investment in shares. 2.2. He noted that during the year under consideration the assessee has invested in equity shares of the following companies which is hit by the provisions of Section 56(2)(viia) of the Income Tax Act, 1961 : Sl. No. Name of the company Amount 1. Aura Buildwell Pvt. Ltd 30,15,000/- 2. Bharti Containers Pvt Ltd 20,00,000/- 3. Bluebell Agencies Pvt Ltd 7,00,000/- 4. Dharmesh Textiles Ltd 25,00,000/- 5. Hitech Grain Pvtltd 1,72,15,500/- 6. Hyman and Marketing Pvt. Ltd 1,80,05,000/- 7. Natraj Capital Ltd 2,00,000/- 8. Shokeen Jewellpry Pvt Ltd 15,00,000/- 2.3. However, the A.O. during the course of assessment proceedings has not examined the issue of applicability of provisions of Section 56(2)(viia) of I.T. Act for basis of determination of Fair Market Value ["FMV"]. Similarly, the other reason for scrutiny was investment in unlisted equity shares during the year. However, although the A.O. has examined with r....
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....marising the enquiries conducted and the findings therein. However, from perusal of the Assessment Order dated 15.12.2017, it is seen that all such required elements are missing therein and it is not reflected if any enquiry relevant to the issue under consideration in the present proceedings has been conducted. The Ld. PCIT relying on various decisions held that since there was no enquires conducted by the A.O. on the issue of valuation of shares in terms of Section 56(2)(viia) read with Rules 11U/11UA of the Income Tax Rules the order passed by the A.O. without making any enquiry or verification which should have been done has made the order erroneous in so far as it is prejudicial to the interests of Revenue. He, therefore, set aside the order passed by the A.O. under section 143(3) of the I.T. Act, 1961 and directed him to pass necessary consequential order, after giving due opportunity of being heard to the assessee. 3. Aggrieved with such order of the Ld. PCIT the assessee is in appeal before the Tribunal by raising the following grounds : GROUNDS OF APPEAL 1. That in the given facts order of Ld PCIT passed u/s 263 of the Act is passed without authority of law ....
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....thout authority of law and is ultra vires to the provisions of the Act including section 263 of the Act as Ld AO) has clearly mentioned in assessment order sought to be revised at paragraph 3 of the assessment order that all requisite /necessary details relevant to issue of limited scrutiny selection were called for and duly examined which jurisdictional aspect has not been objectively appreciated by worthy Ld PCIT in impugned order passed u/s 263 thus impugned order passed u/s 263 is jurisdictionally defective and void ab initio. 5. That in the given facts order of Ld PCI T passed u/s 263 of the Act is passed without authority of law and is ultra vires to the provisions of the Act including section 263 of the Act as Ld PCI T has simply directed Ld AO to verify the share valuation aspect u/s 56(2)(viia) which verification on basis of available details could have been done at end of Ld PCIT ( with end result that no prejudice is caused to revenue) , thus impugned order passed u/s 263 without necessary verification made by Ld P CIT in face of available details on case records (these details showing no prejudice to revenue), is fundamentally flawed and defective. 6. ....
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....urt in the case of PCIT vs., M/s. Brahma Centre Development Pvt. Ltd., vide ITA.No.116 & 118/2021 Dated 05.07.2021, the Learned Counsel for the Assessee drew the attention of the Bench to Page Numbers 7 to 16 of the order and submitted that the Hon'ble Delhi High Court in the said decision has held that the standard to be adopted while dealing with the issue as to whether or not an A.O. has carried out an enquiry or verification, all that the Court is required to ascertain is as to whether the A.O. applied his mind. The fact that the A.O. has not given reasons in the assessment order is not indicative, always, of whether or not he has applied his mind. He submitted that it has been held that inadequacy in conduct of enquiry cannot be the reason based on which powers under Section 263 of the I.T. Act can be invoked to interdict an assessment order. He submitted that it has further been held that the error should be one that is not debatable or a plausible view. Section 263 of the Act invests a power of revision in a superior officer and, therefore, by the very nature of the power, does not allow for supplanting or substituting the view of the A.O. The appreciation of material placed....
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....9 ITR 374 (Del.) 17. Order of ITAT, Delhi Bench in the case of Perfetti Van Melle India Pvt. Ltd., vide ITA.No.3046/Del./ 2016 dated 11.01.2019. 18. Order of ITAT, Delhi Bench in the case of Ramesh Kumar vide ITA.No.1982/Del./2018 dated 25.01.2019. 19. Order of ITAT, Delhi Bench in the case of Shanker Tradex Pvt. Ltd., vs., PCIT vide ITA.No.2999/Del./ 2017 dated 16.04.2018. 20. Order of ITAT, Delhi Bench in the case of Surya Financial Services Ltd., vs., PCIT [2018-TIOL-74- ITAT-DEL] Order Dated 08.01.2018. 21. CIT vs., Ashok Logani [2011] 347 ITR 22 (Del.). 22. Order of ITAT, Delhi Bench in the case of Pooja Gupta in ITA.No.4057/Del./2018 Dated 31.01.2019. 23. Shree Manjunathesware Packing Products & Camphor Works vs., CIT [1998] 231 ITR 53 [SC]. 24. Order of ITAT, Delhi Bench in the case of PTC Impex (India) Pvt. Ltd., vs., CIT vide ITA.,No.2860/ Del./2010 dated 03.04.2018. 5. We have considered the rival arguments made by both the sides, perused the orders of the A.O. and the Ld. PCIT and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before me. We find....
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.... Submission containing detailed List and valuation of Investments submitted. 11 Reply u/s 142(1), letter dated 04/12/2017 06-12-2017 Explaining source of Investment and ledgers A/c of loan received accompanied the submission 12 Reply u/s 142(1), letter dated 08/12/2017 08-12-2017 List of loan & advances received and their ledger accounts annexed with submission 13 Reply u/s 142(1), letter dated 13/12/2017 14-12-2017 Details of sale of share and copy of share certificate attached with submission 14 Assessment Order u/s 143(3) passed 15-12-2017 This is the order sought to be brought under revisional jurisdiction 5.4. Further the submission of the Learned Counsel for the Assessee that limited scrutiny was never converted to full scrutiny could not be contradicted by the Ld. D.R. 5.5. We find a somewhat identical issue had come-up before the Hon'ble Delhi High Court in the case of PCIT vs., M/s. Brahma Centre Development Pvt. Ltd., (supra). In that case the order under section 143(3) was passed on 31.01.2017 and 27.09.2017 for the A.Ys. 2012-13 and 2013- 14 wherein the A.O. accepted the interest earned by the assessee against the fi....
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....ion is about the exercise of power by the Commissioner of Income - tax under section 263 of the Income-tax Act. As noted above, the submission of learned counsel for the revenue was that while passing the assessment order, the Assessing Officer did not consider this aspect specifically whether the expenditure in question was revenue or capital expenditure. This argument predicates on the assessment order which apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However, that by itself would not be indicative of the fact that the Assessing Officer had not applied his mind on the issue. There are judgments galore laying down the principle that the Assessing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between "lack of inquiry" and "inadequate inquiry". If there was any inquiry, even inadequate, that would....
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....ed the order unless the decision is held to be erroneous. Cases may be visualised where the Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at conclusion and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion. . . . There must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incom....
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....indeed made enquiries as per the reasons for which the case was selected for limited scrutiny and the case was not converted to full scrutiny, therefore, respectfully following the decision of the Hon'ble Delhi High court in the case of PCIT vs., M/s. Brahma Centre Development Pvt. Ltd., (supra), we hold that the Ld. PCIT was not justified in assuming the jurisdiction under section 263 of the I.T. Act, 1961. We, therefore, set aside the Order of the Ld. PCIT and allow the grounds raised by the assessee on this issue. 5.7. So far as various decisions relied on by the Ld. D.R. are concerned, we are of the considered opinion that these are distinguishable and not applicable to the facts of the present case especially when the case of the assessee which was selected for limited scrutiny was never converted to full scrutiny and the assessee had submitted all the details as called for by the A.O. from time to time for the reasons for which the case was selected for limited scrutiny. The grounds raised by the assessee are accordingly allowed. 6. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on 14.10.2021. ============= Document 1 Pawans....