TaxTMI 
TaxTMI 
2024 (8) TMI 1115
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....ccepted. Subsequently, the assessment record was called for by the Pr. CIT, wherein it was noticed that the source of the investment in the property was not properly examined by the AO. The Ld. PCIT, therefore, held that the order of the AO was erroneous and prejudicial to the interest of revenue. Accordingly, a notice under Section 263 of the Act was issued by the Pr. CIT on 16.03.2022 and, thereafter, on various other dates. No compliance made before the Ld. Pr. CIT in response to the notices under Section 263 of the Act. Thereafter, the Ld. Pr. CIT passed the impugned order under Section 263 of the Act and the assessment order was set aside with a direction to the AO to make requisite enquiries and proper verification and, thereafter, to complete the assessment de novo. 3. Aggrieved with the order of the Ld. Pr. CIT, the assessee is in appeal before us. 4. The assessee has taken following grounds in this appeal: "1. On the facts and in the circumstances of the case, the learned Principal CIT erred in assuming his jurisdiction u/s 263 of the IT. Act, whereas the mandatory conditions for assuming such jurisdiction are totally absent, with the result that the impugne....
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....he Ld. Senior Counsel contended that when the matter was examined by the AO in detail in the course of assessment proceeding, it was not correct on the part of the Ld. Pr. CIT to hold that the order of the AO was erroneous and prejudicial to the interest of the revenue. He further submitted that a detailed reply dated 24th March, 2021 was also filed before the Ld. Pr. CIT, which was not taken into account in his order. He placed reliance on the following decisions in support of his contention that the order of the AO was not erroneous and prejudicial to the interest of the revenue and, therefore, the order under Section 263 of the Act passed by the Ld. Pr. CIT should be quashed: i. CIT vs. Kamal Galani, [2018] 95 taxmann.com 262 (Gujarat) ii. CIT vs. Kamal Galani, [2019] 110 taxmann.com 213 (SC) iii. CIT vs. Ranchhod Jivabhai Nakhava [2012] 21 taxmann.com 159 (Guj.) iv. ACIT vs. Jas Infra Space Pvt. Ltd. in ITA No. 2130/Ahd/2017 & Ors. v. Mastek Limited vs. PCIT in ITA No.375/Ahd/2023 vi. HBC Lifsciences Private Limited vs. PCIT in ITA No.328/Ahd/2023 6. Per Contra, Shri Sudhendu Das, the Ld. CIT.DR submitted that the AO had ....
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....cting a fresh assessment; or (ii) an order modifying the order under section 92CA; or (iii) an order cancelling the order under section 92CA and directing a fresh order under the said section]. As per provision of this section the PCIT is empowered to call far and examine the record of any proceeding under the Act. Accordingly, he had called for the record of this case, examined the assessment order and after such examination he formed an opinion that the order of the AO was erroneous and prejudicial to the interest of revenue. 8. The circumstances under which an order can be held as erroneous and prejudicial to the interest of revenue is specified in Explanation 2 to section 263 of the Act, which is found as under: Explanation 2.-For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer 3[or the Transfer Pricing Officer, as the case may be,] shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner,- (a) the order is passed without making inq....
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..../- By purchaser to Confirming Party No.1 by Ch. No.000076 dated 13.02.2015 drawn on A'bad Mercantile Co.Op. Bank 8 1,00,00,000/- By purchaser to Confirming Party No.1 by Ch. No.000078 dated 13.02.2015 drawn on A'bad Mercantile Co.Op. Bank 9 85,00,000/- By purchaser to Confirming Party No.1 by Ch. No.000079 dated 13.02.2015 drawn on A'bad Mercantile Co.Op. Bank 10 1,00,00,000/- By purchaser to Confirming Party No.2 by Ch. No.000080 dated 13.02.2015 drawn on A'bad Mercantile Co.Op. Bank 11 1,00,00,000/- By purchaser to Confirming Party No.2 by Ch. No.000081 dated 13.02.2015 drawn on A'bad Mercantile Co. Op. Bank 12 85,00,000/- By purchaser to Confirming Party No.2 by Ch. No.000082 dated 13.02.2015 drawn on A'bad Mercantile Co. Op. Bank 13 1,00,00,000/- By purchaser to Confirming Party No.3 by Ch. No.000083 dated 13.02.2015 drawn on A'bad Mercantile Co.Op. Bank 14 1,00,00,000/- By purchaser to Confirming Party No.3 by Ch. No.000084 dated 13.02.2015 drawn on A'bad Mercantile Co. Op. Bank 15 85,00,000/- By purchaser to Confirming Party No.3 by Ch. No.000085 dated 13.02.2015 drawn o....
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....preceding para, in the course of assessment proceeding. Thus, the AO had failed to make enquires and verifications which were required to be made in order to examine the issue for which the case was selected for scrutiny. The bank statement also revealed that the assessee had no funds of his own to make these payments. It was explained that the payments towards sale consideration were made on the strength of loans taken from "Infinity International" and "Horizon Finvest" and a copy of confirmation in respect of the loans taken from these parties along with their ITR and accounts were brought on record. The evidences filed by the assessee were accepted by the AO without any verification. The AO should have examined whether any interest was paid on these loans obtained and whether TDS was deducted thereon. No such enquiry was made in the course of assessment and the documents and the evidences furnished in the course of assessment proceeding were accepted by the AO on their face value without any verification. It is, thus, evident from the above facts that the AO had not conducted proper enquiries in respect of the investment in the properties and, therefore, the order of the AO was ....