2022 (9) TMI 283

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....er of Principal Commissioner in so far as it is against the appellant, is opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2) The Ld. Principal Commissioner of Income Tax (PCIT) has erred in passing order u/s 263 of the Act without satisfying the two conditions of section 263 of the Act i.e. Assessment order u/s 143(3) of the Act must be erroneous as well as prejudicial to the interest of the Revenue. 3) The Ld. PCIT has erred in passing order u/s 263 of the Act without considering the fact that the Assessment order has been passed after verification of relevant facts and legal position prevailing at the time of law. 4) The Ld. PCIT has failed to consider the fact tha....

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....private limited company and is engaged in the business of sugar manufacturing. The assessee filed the return of income for AY 2017-18 on 16.11.2017 declaring NIL income after setting off the current year net loss of Rs.37,80,30,431/-. The case was selected for scrutiny under CASS and a notice u/s. 143(2) of the Act was served upon the assessee. The AO called for various details and concluded the assessment u/s. 143(3) of the Act by disallowing a sum of Rs.55,700/- u/s. 14A of the Act r.w. Rule 7D. 4. The PCIT on verification of records noticed that the assessee has declared an income from long term capital gains amounting to Rs. 50,12,35,745/- in the computation of income and has set off the business loss against the same. The PCIT also ....

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....O has affected the reduction in book profits resulting in short income of Rs.50,10,70,670/- u/s. 115JB of the Act with a consequent short levy of tax of Rs.7,21,35,215/- which is prejudicial to the interest of Revenue. The PCIT set aside the order passed u/s. 143(3) of the Act by the AO with a direction to conduct detailed enquiry in this regard. 7. Aggrieved the assessee is in appeal before the Tribunal. The learned A.R. reiterated the submissions made before the lower authorities. The learned A.R. submitted that all the details pertaining to the property acquisition was submitted before the AO who after verification of the details submitted concluded the assessment accepting the long term capital gain returned by the assessee and also ....

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....sed by the AO as prejudicial to the interest of the Revenue. 10. We will examine first whether the AO during the course of assessment has examined the details relating to the capital gains. We notice that the AO has called for the details pertaining to the long term capital gain along with supporting documents and proof vide notice dated 08.10.2019 (pages 83 & 84 of PB) and the assessee vide letter dated 11.06.2019 had furnished the computation, copy of purchase deed, communication from BMRCL and ledger abstract showing cost including stamp paper, registration charges etc. (pages 85 to 89 of PB). The assessee has also furnished the details of tax deducted along with reconciliation as per P&L account and Form 26AS before the AO (page 82 o....

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....lanation to section 115J." 11. The contention of the PCIT that the above decision is not applicable in assessee's case as the accounts are not prepared as per Companies Act has no merits, since the accounts are audited and certified by the auditors in this regard. The Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. vs. CIT (2000) 243 ITR 83 (SC) had observed that phrase 'prejudicial to the interest of Revenue' has to be read in conjunction with an erroneous order passed by the AO. Every loss of Revenue as a consequence of an order by the AO cannot be treated as prejudicial to the interest of the Revenue. In the given case the AO has perused the materials and have come to the conclusion accepting the book profit computati....