TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 816
X X X X Extracts X X X X
X X X X Extracts X X X X
....e on the ground that the assessee Smt. Anjani Agarwal had purchased 1,95,500 equity shares of M/s Ankit Polyfabs Pvt. Ltd. for a consideration of Rs.1,86,76,115/-, whereas the market value of the shares in terms of Provision of Section 56(2)(x)(c) of the Act, was Rs.4,78,54,490/- and thereby the ld. AO has under assessed the income to the extent of Rs.2,91,78,375/- in the assessment framed u/s 143(3) of the Act. Accordingly, the notice u/s 263 of the Act was issued to the assessee to show cause as to why the assessment framed by the ld. AO u/s 143(3) of the Act should not revised, which was replied by the assessee vide submission dated 26.11.2024, as well as on 04.12.2024, wherein it was submitted that the issue was raised by the AO and verified during the assessment proceedings and only after taking into account the submissions/ explanations of the assessee no addition was made in the assessment framed. However, the reply of the assessee did not find favour with the ld. PCIT and he accordingly revised the assessment with a direction to frame the same denovo after affording reasonable opportunity of hearing to the assessee. 04. The ld. AR vehemently submitted before us that the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion was made u/s 56(2)(x)(c) of the Act. The ld AR argued that the ld. AO had made a detailed enquiry during the course of assessment proceedings and therefore, the assessment order is neither erroneous nor prejudicial to the interest of the Revenue. The ld AR argued that the jurisdiction u/s 263 is only available if the twin conditions are satisfied. The ld. AR in defense of his argument relied on the decision of Malabar Industrial Co. Ltd. Vs. CIT (2000) 243 ITR 83 (SC). The ld. AR further submitted where the ld. AO has taken a plausible view then it cannot be said that view taken by the ld. AO is erroneous as the ld. PCIT does not agree with the view taken by the ld. AO and according to ld. PCIT another view should be taken by the ld. AO. In other words, the ld. PCIT by invoking the provisions of Section 263 of the Act cannot substitute his own view in place of the view taken by the ld. AO. The ld. AR in defense of his argument relied on the decision of JL Morison (India) Ltd. Vs. ACIT in ITA No.786/Kol/2010, which has been upheld by the Hon'ble Jurisdiction High Court as reported in Commissioner of Income-tax, Central - I, KolKata vs. J. L. Morrison (India) Ltd. [2014] 366 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ls of share purchases during the year specifically in point no.26, the issue was raised by the ld. AO. The said question was replied by the assessee during the assessment proceedings by furnishing all the details and the ld. AO framed the assessment accepting the submissions of the assessee and no addition was made u/s 56(2)(x)(c) of the Act qua the purchase of shares by the assessee. However, the ld. PCIT on perusal of the assessment record noted that the fair market value of the shares should have been Rs.244.78. The ld. PCIT determined the market value of shares on the basis of total assets as per the consolidated balance sheet which were Rs.12,17,18,199/- and not on the basis of standalone balance sheet. The ld. PCIT included in the total assets for the purpose of valuation, the assets belonging to associates and subsidiary companies which in our opinion is wrong and can not be accepted. In our opinion, the order passed by the ld. AO after calling for the information from the ld. AO and taking them into account and accepting the explanation given by the assessee appears to be correct and as per the provisions of the Act. In our opinion, the order passed by the ld. AO is neither....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ition then it can be presumed that he has accepted the plea and stand of the assessee. The PCIT has to prove that the assessment framed by the AO is wrong as there was failure to investigate. In our opinion the PCIT has to record the abject failure and lapse on the part of the assessee which rendered the assessment as erroneous and prejudicial to the interest of the revenue and not otherwise. The case of the assessee is squarely covered by the decision of Hon'ble Apex Court in the case of M/s V-Con Integrated Solutions Pvt. Ltd(supra), wherein it has been held as under:- "2. The assessee does not have control over the pen of the Assessing Officer. Once the Assessing Officer carries out the investigation but does not make any addition, it can be taken that he accepts the plea and stand of the assessee. 3.In such cases, it would be wrong to say that the Revenue is remediless. The power under Section 263 of the Income Tax Act, 1961, can be exercised by the Commissioner of Income Tax, but by going into the merits and making an addition, and not by way of a remand, recording that there was failure to investigate. There is a distinction between the failure or absenc....