AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (7) TMI 1354
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.... for the following reasons:- "(i) A loan of Rs. 80,00,000/- is shown to be obtained from M/s Sanwaria Trade Link Pvt. Ltd., Kolkata. From the bank a/c of M/s Sanwaria Trade Link Pvt. Ltd., It is further found that there is chain transaction system to give loan to assessee firm. The credit/transfer entries are of same amount in the creditors/transfer bank account, they/it have transferred to the assessee firm, which seems unusual/non-genuine. It has also been found that M/s Sanwaria Trade Link Pvt. Ltd., does not have funds in its bank account but when it transfers loan to the assessee firm, suddenly it manages fund from other companies and transfer to the assessee firm on the same day or next day. During the course of asst. proceed....
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....d and no independent enquiries were carried out regarding the company had the financial capability to advance such substantial amounts and whether it is a genuine corporate entity. Further, the Ld. CIT referred to the decision of the Hon'ble Supreme Court in the case of Sumati Dayal vs CIT (214 ITR 801) and CIT vs Durga Prasad More (82 ITR 540). He further referred to Explanation 2(a) inserted w.e.f. 01.06.2015 to section 263 and finally held that the assessment order is erroneous and prejudicial to the interest of the Revenue and directed the AO to pass an order afresh. 4. Against this order, the assessee is in appeal before us. 5. We have heard both the parties and perused the records. The ld. Counsel for the assessee submitted that....
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....a disclosure of details was called for by AO and made by assessee. Court was of view that Tribunal was justified in coming to conclusion that recourse to powers under section 263 by CIT was not warranted in facts and circumstances of case". 2- Delhi High Court in the case of ITO vs DG Housing Projects Ltd ITA 179/2011 "17. This distinction must be kept in mind by the CIT while exercising jurisdiction under Section 263 of the Act and in the absence of the finding that the order is erroneous and prejudicial to the interest of Revenue, exercise of jurisdiction under the said section is not sustainable. In most cases of alleged "inadequate investigation", it will be difficult to hold that the order of the Assessing Officer, wh....
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....ial to the interest of Revenue" has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of Revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of Revenue. Thus, when the Assessing Officer had adopted one of the courses permissible and available to him, and this has resulted in loss to Revenue; or two views were possible and the Assessing Officer has taken one view with which the CIT may not agree; the said orders cannot be treated as an erroneous order prejudicial to the interest of Revenue unless the view taken by the Assessing Officer is unsustainable in law. In such matters, the CIT must give a finding that the view taken by the Assessing....
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....prejudicial to the interest of the Revenue. In latter cases, the CIT has to examine the order of the Assessing Officer on merits or the decision taken by the Assessing Officer on merits and then hold and form an opinion on merits that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. In the second set of cases, CIT cannot direct the Assessing Officer to conduct further enquiry to verify and find out whether the order passed is erroneous or not. 3-The Commissioner of Income Tax vs Ashish Raipal Delhi High Court ITA 485/2008 "16- The fact that a query was raised during the course of scrutiny which was satisfactorily answered by the assessee but did not get reflected in the....
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.... of some more enquiries. The Assessing Officer, in the instant case, has made enquiries albeit not probably in the manner in which the CIT would have liked but this cannot be the sacrosanct ground for assumption of jurisdiction under Section 263 of the Act. 9. Under these circumstances, one cannot possibly say that the Assessing Officer had sleepwalked on the issues involved. Noticeably, the Ld. CIT himself has not entered into any minimal inquiry on the issues himself, if so considered expedient and there is not even prima facie demonstration of fallacy in the action of the Assessing Officer which rendered the order erroneous and which also simultaneously caused prejudice to the revenue. Merely because the expectations of the Revisional....