TaxTMI 
TaxTMI 
2024 (1) TMI 753
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....claring the total income of Rs. 7,93,940/- for the Assessment Year 2016-2017. The case was selected for scrutiny through CASS and accordingly the assessment under section 143(3) of the Income Tax Act, 1961 was completed on 28.12.2018. The Revenue Department initiated the revision proceeding against the order passed by the Assessing Officer on the ground that it is erroneous and prejudicial to the interest of Revenue. It was alleged that certain properties were sold by the assessee by showing lesser value than the value, which was assessed for the purpose of payment of stamp duty and it was contended that short levy of tax was made of Rs. 3,66,049/-. The revenue contended that the assessee has paid Rs. 9 lakhs on account of commission or brokerage which is deductible under TDS was not deducted. Therefore, wrong assessment of income was made and the disallowance of Rs. 2,70,000/- i.e., 30% of Rs. 9,00,000/- should have been ordered as per section 40(a)(ia) of the I.T. Act. It is stated that the enquiry to ascertain the facts about the issue having not been done by the Assessing Officer and since no addition was made during the course of assessment proceeding, the order of the assessi....
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.... both stamp papers with the competent authority who issued those stamp papers; (3) To invoke the doctrine of substance over form in respect of transaction with M/s Gangotri Tracon P. Ltd after due verification. (4) To verify the repayment and interest payment of sum of Rs. 6,11,26,848/- & Rs. 47,36,052/- respectively ; (5) To verify applicability of Section 56(2) (vii-b) in respect of shares issued ; (6) To verify the applicability of 43CA in respect of sale deed executed below stamp duty value; (7) To verify the applicability of Section 40A(3) in respect of payment for purchase of land ; 4) Being aggrieved by the Revisional Order passed by the PCIT under Section 263 of the Act in both the revisions, the assessee preferred appeals before the Income Tax Appellate Tribunal. The Tribunal vide its Orders dated 25.10.2021 and 22.10.2021 (challenged in Appeal Nos. 5/2022 & 7/2022 respectively) set aside the order of the PCIT on the ground that the PCIT travelled beyond its statutory mandate and quashed the order passed u/s 263 of the IT Act, 1961. Being aggrieved by such orders, Revenue filed these appeals before this Court. 5) This Cour....
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....irtue of it, prejudice has been caused to the interest of Revenue. b) he made a reference to the decision of this Court rendered in Tax Case No.69 of 2016 - M/s, Natural Ores Pvt. Ltd. Raipur Versus Principal Commissioner of Income Tax-1, Raipur decided on 25.10.2016 and would submit that when the order is erroneous on the face of it, the view taken by the Assessing Officer is unsustainable. Therefore, the order of Assessing Officer is not only erroneous but would be deemed to be prejudicial to the interest of revenue. c) he would submit that in any case, the order of reassessment will not prejudice to the interest of the assessee/respondent as he would get complete opportunity to defend them. He would further submit that the assessee has received a sum of Rs. 5,59,31,494/- against the sale of land and unsecured loan and made a repayment to some extent with interest but failed to furnish any document with respect to such transaction made with the above company and the above company was found to be a shell company and the genuineness of the Company having not been established, the sum received should have been disallowed. d) he would next submit that cash ....
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....al proposition as pointed out by the appellant/respondent is not much in dispute. The power of suo-motu revision under sub-section (1) of section 263 of the Act is in nature of supervisory jurisdiction and the same can be exercised only if the two circumstances specified therein exist. To appreciate the rival contention of the parties, it would be apposite to refer to Section 263 of the Act, relevant portion of which reads as follows: "263. Revision of Orders prejudicial to revenue.-- (1) The Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous insofar as it is prejudicial to the interests of the Revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment." 10) The Bombay High Court in Commissioner of Incom....
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....ed always to have included all records relating to any proceeding under the Act available at the time of examination by the Commissioner." (Emphasis supplied) 12) Further, the Apex Court in Commissioner of Income Tax Vs. Greenworld Corporation {(2009) 314 ITR 81 (SC)} while dealing with Section 263 held as follows: "Jurisdiction under Section 263: The scope of the provisions of Section 263 of the Act is no longer res integra. The power to exercise suo motu power of revision in terms of section 263(1) is in the nature of supervisory jurisdiction and same can be exercised only if the circumstances specified therein, viz., (1) the order is erroneous; (2) by virtue of the order being erroneous prejudice has been caused to the interest of the Revenue, exist." (Emphasis supplied) 13) A reading of the aforesaid principle laid down by the Supreme Court would show that the power conferred to the Commissioner under Section 263 wherein the order is sought to be reviewed is in the nature of supervisory jurisdiction, can be exercised if two circumstances exist viz., (i) the order is erroneous and (ii) by virtue of order being erroneous, prejudice has been caused to....
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....reading of Section 68 of the Act which has been invoked by the PCIT would show that the sum credited in the books of an assessee maintained for any previous year can be accounted for income-tax as the income of the assessee of "that previous year". The finding has been recorded by the appellate Tribunal that Rs. 18.12 crores lent from GTPL was not received in the assessment year in question but was received in earlier assessment year and was duly assessed and most importantly the finding has been recorded that the amount represents opening balance of carried forward credit of an earlier year. Therefore, according to Section 68 of the I.T. Act which operates in the limited field , any sum found credited in the books of assessee maintained for "that previous year" may be charged to income tax as income of the assessee of that previous year, if - (i) the assessee offers no explanation about the nature of source of such sum or (ii) the explanation offered by him in the opinion of the Assessing Officer is not satisfactory. Therefore, the very genesis to invoke the provisions of Section 68 of the Act apparently appears beyond the scope of PCIT as the amount was received from the Company ....
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.... by the assessee. With respect to investment which is made in the property, there can be only two methods to find out the correct position - (i) When proper books of account are maintained, and (ii) valuation report. The finding of the Tribunal shows that proper books of account were maintained and no defects are pointed out about enormous gap of any valuation and consequently the books were not rejected. Therefore the figures shown therein have to be followed. The valuation report can be taken into consideration when the books of account are not reliable or are not supported by proper vouchers. The assessment year in this case has not doubted such entry and it has not been stated that the books of account maintained by the assessee are defective or not reliable. It may have marginal difference with the valuation but that may be for various reasons but primarily aforesaid two conditions are required to be satisfied, which having not been present, the appellate Tribunal has rightly held the issue in favour of the assessee. 17) The Tribunal also recorded the fact that the so called incriminating information that the lender company being classified by the SEBI as shell Company coup....