TaxTMI 
TaxTMI 
TaxTMI 
2023 (6) TMI 919
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....ly on 27.07.2010 declaring total income of Rs. 41,93,390/- which was processed u/s 143(1) of the Act. Later on, the case of the assessee was reopened u/s 147 of the Act. Reasons for reopening the assessment read as under: " ... The case was reopened U/s 147 as A.D.LT. (Itw.), Unit 2(l), New Delhi has shared information of beneficiaries of accommodation entries received from Sh. Pardeep Kumar Jindal, (Entry Provider). During the post search in the case of Sh. Pardeep Kumar Jindal, New Delhi the entry provider, it has been found that the assessee is among the beneficiaries of the accommodation entries. The assessee has received the following accommodation entries:- S. No. Amount Date of Entry Entry provided by 1 35,00,000 26.09.09 Lord Shiva: Investment Trading & Co. Pvt. Ltd. 2 30,00,000 27.09.2009 Euphoria Capital Pvt. Ltd. 3. 30,00, 25.09.2009 At All Times Securities Pvt. Ltd. 4. 30,00,000 29.09.2009 At All Times Securities Pvt. Ltd. Thus assessee has got accommodation entries amounting to Rs. 1,25,00,000/- and also paid commission @2.5% upon these entries i.e. Rs.3,12,500/- during the F.Y 2009-10 relevant to A.Y. 2010-11. In view of these facts....
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....ly. [Addition: 57,11,481]" 6. Vide notice dated 31.08.2018, the PCIT assumed jurisdiction conferred upon him by provisions of section 263 of the Act and issued the following notice: "To Sh. Jagdeep Bhargava, M/s Argentum Fashion Pvt. Ltd. Anand Bhawan, Hisar Sub : Notice u/s 263(1) of the Income Tax Act, 1961 for the A.Y 2010-11 Regarding Return for the A.Y. 2010-11 was filed by you electronically on 27.07.2010 declaring an income of 41,93,390/-. Subsequently, the case was reopened on the basis of information that you got accommodation entries amounting to Rs. 1,25,00,000/- at commission of 2.5% during the F.Y. 2009-10 relevant to A.Y. 2010-11. The assessment for the year under consideration was completed by the Dy. Commissioner of Income-tax, Circle- Hisar vide order dated 29.12.2017 passed u/s 143(3) of the I.T. Act, 1961 at total income of Rs. 1,00,37,176/-by making an addition of Rs.57,11,418/- u/s 56(2)(vii)(c) of the Act on a/c of LTCG from sale of shares being higher than the Fair Market Value. Another addition of Rs. 1,32,305/- has also been made by negating the benefit of indexation claimed in respect of short term capital loss. 2. The assessment r....
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.... undersigned personally or through duly authorized representative on the above said date and time. In case of no reply / non-attendance as per above, it shall be assumed that you do not wish to say anything in the matter and the matter would be decided as per material on record without any further notice / intimation to you &....
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.... Rs.35 lakhs and 30 lakhs on 26.09.2009 and 29.09.2009 respectively from M/s Lord Shiv Investment & Trading Co. Pvt. Ltd. and At All Time Your Security Pvt. Ltd., yet it was explained to be sale proceeds of the shares of Quality Stainless Pvt. Ltd. and Quality Foils (India) Ltd. However, the assessee negated to have taken the balance amount of Rs.60 lakhs (out of the aforementioned Rs.1.25 Crore) contending that the assessee has not taken any sum of Rs.30 lakhs on 25.09.2009 from At All Time Your Security Pvt. Ltd. and Rs.30 lakhs from Euphoria Capital Pvt. Ltd. on 27.09.2009 and also requested that the 'position may he got rechecked/verified. During the assessment proceedings, the AO enquired the position from the ADIT (Inv.)-2(l), New Delhi vide letter No.8012 dated 07.12.2017 and ADIT (Inv.), New Delhi, vide his letter dated 12.12.2017 provided the evidence in respect of the entries of Rs.30 lakhs from M/s Euphoria Capital Pvt. Ltd. on 27.09.2009. However, the AO did not confront the same to the assessee and finalized the assessment proceedings without verification of the issue. The AO should also have obtained the Vijaya Bank A/c statement of M/s Euphoria Capital Pvt. Lt....
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....Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent--if the order of the Income-tax Officer is erroneous but is not prejudicial to the Revenue or if it is not erroneous but is prejudicial to the Revenue-- recourse cannot be had to section 263(1) of the Act. The provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer, it is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous ". 12. The Hon'ble Bombay High Court in the case of Gabriel India Ltd 203 ITR 108 has held as under: "The power of suo motu revision under subsection (1) is in the nature of supervisory jurisdiction and the same can be exercised only if the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to exercise power of revision under this sub-section, viz., (i) the order is erroneous; (ii) by virtue of the order being erroneous prejudice has been caused to the interests of the Revenue. It has, ther....
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.... the Revenue. But that by itself will not be enough to vest the Commissioner with the power of suo motu revision because the first requirement, viz., that the order is erroneous, is absent. Similarly, if an order is erroneous but not prejudicial to the interests of the Revenue, then also the power of suo motu revision cannot be exercised. Any and every erroneous order cannot be the subject-matter of revision because the second requirement also must be fulfilled. 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 incomplete interpretation a lesser tax than what was just has been imposed. We, therefore, hold that in order to exercise power under sub-section (1) of section 263 of the Act there must be material before the Commissioner to consider that the order passed by the Income-tax Officer was erroneous in so far as it is prejudicial to the interests of the Revenue. We have already held what is erroneous. It must be an order which is not in accordance with the law or which has been passed by the Income tax Officer without making any enquiry in undue....
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....f the Revenue. By 'erroneous' is meant contrary to law. Thus, this power cannot be exercised unless the Commissioner is able to establish that the order of the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. Thus, where there are two possible views and the Assessing Officer has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry. Our view is fortified by the decision of Hon'ble High Court of Bombay in the case of CIT vs. Nirav Modi, [2016] 71 Taxmann.com 272 (Bombay). 14. The Hon'ble High Court of Gujarat in the case of CIT vs. Nirma Chemical Works Ltd. 309 ITR 67 has observed as under: "if assessment order were to incorporate the reasons for upholding the claim made by an assessee, the result would be an epitome and not an assessment order. In this case, during the assessment proceedings for both the Assessment Years, the Assessing. A.Y....