2023 (8) TMI 1652

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....l, Rajkot (for short 'the Tribunal') in ITA No.117/RJT/2022 for the Assessment Year 2017-2018 :- "(i) "Whether the Hon'ble Tribunal was justified in quashing the order u/s. 263 of the Income Tax Act of Ld. PCIT contrary to Explanation 2 of Section 263 of the Act?" (ii) "Whether the Hon'ble Tribunal was justified in quashing the order u/e 263 of the Income Tax Act of Ld. PCIT especially when the Assessment Order passed by the A.O. te unsustainable in law?" (iii)"Whether the Hon'ble Tribunal was justified in quashing the order u/s. 263 of I.T. Act of Ld. PCIT despite the A.O. having erred in not charging tax u/s. 68 r.w.s. 115BBE of the Act on the additions of unexplained creditors and liabilities?" (iv)"Whether the Hon'ble Tribuna....

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....bilities, failed to apply provisions of Section 115BBE of the Act to tax the same at 60% with applicable surcharge of 25% of such tax by not making the addition under Section 68 of the Act. The CIT (Appeals) therefore passed an order under Section 263 of the Act dated 1st March, 2022 on the ground that the assessment order is erroneous and prejudicial to the interest of Revenue cancelling the same with a direction to make a fresh assessment. 3.4. Being aggrieved, the assessee preferred an appeal before the Tribunal who vide impugned order dated 21st April, 2023 set aside the order passed by the PCIT under Section 263 of the Act. 3.5. The Tribunal considered the records and submissions made by the assessee that the creditors represent the ....

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....ction 68 of the Act: (i) Manoj Aggarwal versus DCIT [2008] 113 ITD 377 (Delhi Special Bench). (ii) Ravindra Arunachala Nadar 129 taxmann.com 275 (Chennai-Trib.). (iii) CIT versus Pancham Dass Jain 156 Taxman 507 (Allahabad). (iv) PCIT versus Kulwinder Singh 99 taxmann.com 499 Punjab and Hariyana High Court. (v) Zazsons Exports Limited 88 taxmann.com 617 (Allahabad). 3.8. Considering the above decisions, the Tribunal held as under: "5.5 In the instant facts, in our considered view, the PCIT has not controverted the factual assertions made the assessee that the amount represented opening balances from earlier years/trade creditors of the assessee. Further, the assessee also placed on record substantial evidences in 263 proce....

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....icer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year: [Provided that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee company shall be deemed to be not satisfactory, unless (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found ....