TaxTMI 
TaxTMI 
2018 (5) TMI 2109
X X X X Extracts X X X X
X X X X Extracts X X X X
....ld also apply to other two cases and three appeals. 3. The Ground No's.1 to 9 of the appeal states that the Principal Commissioner of Income Tax (Pr.CIT) has erred in passing ex-parte order under section 263 of the Act prematurely not granting adjournment and cancelling the assessment by holding it as erroneous and prejudicial to the interest of Revenue as the Assessing Officer(AO) had not made addition of cash deposits of Rs. 10,93,460/- in IDBI Bank and Rs. 12,99,800/- in Axis Bank and not made any enquiry regarding acquisition of shares of Rs. 50,63,754/- without appreciating the facts that the Assessing Officer(AO) had passed assessment order after obtaining clarification of cash deposits in bank account and other details, therefore, the assessment could not be termed as erroneous. 4. Succinctly, facts as culled out from the orders of lower authorities are that the assessee has filed return of income on 11.08.2008 declaring total income of Rs. 60,534/-. The case was reopened u/s.147 and assessment was made under section 143(3) read with section 147 of the Act on 29.03.2016 accepting the returned income of Rs. 60,534. The AO and Range Head of Navsari have proposed that the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2003] 183 CTR 228 (SC) : [2003] 131 Taxman 535 (SC) and other as discussed in his order passed under section 263 of the Act. 5. Being aggrieved, the assessee filed this appeal before the Tribunal. The learned counsel for the assessee submitted that the assessment was reopened on the ground that cash deposits of Rs. 10,93,460/- with IDBI Bank, Rs. 12,99,800/- with Axis Bank and Rs. 50,63,754/- invested on different dates for acquiring shares. During the course of reassessment proceedings, the AO has conducted inquiries and found that cash deposits with IDBI Bank are on account of sale proceeds and said bank account has been shown in the balance sheet with regarding cash deposit of Rs. 12,99,800/- with Axis Bank the AO has made addition of Rs. 6,41,280/- estimating 8% profit on including and bank deposits the amount of Rs. 80,16,000/- in the case of Ankit V. Parekh, son of the assessee, being joint account holder of Axis Bank with the assessee wherein, the cash deposits of Rs. 12,99,800/- has been considered. With regard shares of Rs. 50,63,754/- o such shares are held by the assessee, therefore, the observation made by the Pr.CIT in the show cause under section 263 that no addition....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o conduct such enquiry. Further, relying on the decision in the case of Pr.CIT v. Modicare Limited [I.T.A. No. 759/2017] of Hon'ble Delhi High Court wherein following its own decision in the case of ITO v. DG Housing Projects Limited 343 ITR 32(Del), DIT Jyoti Foundation [357 ITR 388 ] and Pr. CIT v. Airport Metro Express Pvt. Ltd. [I.T.A. No. 705/2017] held that the exercise of jurisdiction cannot be outsourced by the Commissioner of Income Tax(CIT) to the AO and therefore, the CIT cannot direct the AO to provide details of the factors on the basis of which proceedings under section 263 of the Act could have been initiated. The ld.Authorised Representative(AR) further placed reliance in the case of CIT v. Sunbeam Auto Ltd.[2010] 332 ITR 167 (Delhi) /189 Taxman 436 (Del) wherein it was held that if there was any inquiry, even inadequate, that would not by itself, give occasion to the Commissioner to pass order u/s. 263 of the Act , merely because the Commissioner has a different opinion in the matter and that only in cases where there is no enquiry, the powers u/s.263 of the Act can be exercised. The Pr.CIT cannot pass an order that further / through enquiry should have been made b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....prejudicial to the interests of the Revenue" as used in section 263(1) of the Act must be read in conjunction with the expression "erroneous" and unless the view taken by the Assessing Officer is found to be unsustainable in law, the powers under section 263 of the Act cannot be invoked. 8. The Pr.CIT in this case even though stated that the AO failed to examine during the course of assessment proceedings the source of cash deposits in bank account with IDBI and Axis Bank and investment in shares but did not point out what type of inquiry or verification should have been carried out in this regard by the AO. However, We find that the AO did make enquiry regarding cash deposits of Rs. 12,99,800/- and same were considered as unexplained in the case of Shri Ankit V. Parekh, son of the assessee of whom this joint account belonged and made addition @ 8% of cash deposits in his hand . Therefore, the version of the Pr.CIT that no addition has been made on this account is based on wrong foundation. Similarly, we find that the assessee has disclosed bank account with IDBI in her balance sheet filed along with return of income, and same are claimed as cash sales, which have been accepted by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ck to Assessing Officer to re-examine issue - Whether when facts clearly showed that Assessing Officer had undertaken exercise of examining as to whether expenditure incurred by assessee in replacement of dyes and tools was to be treated as revenue expenditure or not and on being satisfied with assessee's explanation, he accepted same, it could be said to be a case of lack of inquiry - Held, no - Whether further, on facts and law, view taken by Assessing Officer was one of possible views and, therefore, assessment order passed by Assessing Officer could not be held to be prejudicial to interest of revenue - Held, yes - Whether, therefore, Tribunal was justified in setting aside order of Commissioner - Held, yes. 10. In the case of CIT v. Vodafone Essar South Ltd. [2013] 1 ITROL526( Delhi): [2012] 212 Taxman 184(Delhi) in which the Hon`ble High Court relied on its earlier judgement in the case of CIT v. Sunbeam Auto Ltd. [2011] 332 ITR 167 (Delhi) [2010] 189 Taxman 436 (Delhi) in which it held that if there is some enquiry by the Assessing Officer in the original proceedings, even if inadequate, that cannot clothe the Commissioner with jurisdiction under section 263 merely beca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be held to the "erroneous" simply because in his order he did not make an elaborate discussion in that regard. Moreover, in the instant case, the Commissioner himself, even after initiating proceedings for revision and hearing the assessee, could not say that the allowance of the claim of the assessee was erroneous and that the expenditure was not revenue expenditure but an expenditure of capital nature. He simply asked the Income Tax Officer to re-examine the matter. That was not permissible. The Tribunal was justified in setting aside the order passed by the Commissioner of Income Tax under Section 263". 13. The learned counsel for the assessee relying on the decision in the case of Pr. CIT v. Modicare Limited [I.T.A. No. 759/2017] of Delhi High Court wherein following its own decision in the case of ITO v. DG Housing Projects Limited 343 ITR 32(Del), DIT Jyoti Foundation [357 ITR 388 ] and Pr. CIT v. Airport Metro Express Pvt. Ltd. [I.T.A. No. 705/2017] held that the exercise of jurisdiction cannot be outsourced by the CIT to the AO and therefore, , the CIT cannot direct the AO to provide details of the factors on the basis of which proceedings under section 263 of the Act coul....