TaxTMI 
TaxTMI 
2025 (12) TMI 273
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....in any view of the matter, action of Ld. PCIT in passing the impugned order u/s 263 is bad in law and against the facts and circumstances of the case and is in violation of principles of natural justice. 3. That having regard to facts & circumstances of the case, Ld. PCIT has erred in law and on facts in holding as under: - * That AO should have brought the entire sale consideration of Rs. 1,65,03,478/- to tax in the year under consideration instead of net LTCG. * That AO should have also calculated alleged commission @2% on the total sale consideration of Rs. 1,65,03,478/-. 4. Without prejudice to the above grounds, that in any case and in any view of the matter, Ld. PCIT has erred in law and on facts in assuming jurisdiction u/s 263 which is bad in law inter alia for this reason that the reassessment order passed u/s 147/144B dated 28.03.2022 which is sought to be revised u/s 263 itself was invalid on various legal and factual grounds and thus proceeding initiated u/s 263 against the invalid reassessment order is clearly bad in law." 3. Representatives of both the sides were heard at length. Case records carefully perused. Relevant documenta....
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....act note of M/s Life Line Securities Ltd. 11. The investigations carried out by the investigation unit revealed the modus operandi in the case of this assessee that the shares were purchased through the stock market, by entry-operator controlled entity M/s Life Line Securities Ltd., in the same F.Y. itself, transferred to the assessee demat account within a few days of purchase by way of off market transfers, using accounts controlled and managed by entry providers, from where it was sold within a few days. For the evidence for purchase of shares in 2009, a contract note from the same M/s Life Line Securities Ltd is fabricated. In the manner, the assessee's own unaccounted money was camouflaged as exempt long-term capital gain and no tax was paid on the transaction. 12. The investigation and enquiry showed that the assessee has actually purchased these shares during the F.Y.2014-15 and has obtained the bogus contract notes reflecting that the shares were purchased in 2009 to claim the benefit of LTCG. Accordingly, the AO reduced the cost of acquisition of Rs. 7,78,156/- from the sale consideration of Rs. 1,65,03,478/- on sale of shares of and taxed the entire income amounting....
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....Act on the same issue. The ld. counsel for the assessee also relied on the decision in the case of Jaishree Ravi Sancheti vs PCIT ITA No. 2269/Mum/2024 27.09.2024 18. It is the say of the ld. counsel for the assessee that the issue of purchase and sale of shares of IndusInd Bank and resultant capital gain is pending for adjudication before the ld. CIT(A) and on the same issue, and therefore the PCIT cannot pass an order u/s 263 of the Act considering the sale consideration as unexplained u/s 68 of the Act. In effect, the ld. counsel for the assessee challenged the assumption of jurisdiction by the PCIT u/s 263 of the Act. 19. Per contra, the ld. DR relied upon the orders of the authorities below. The ld. DR vehemently opposed the contentions of the ld. counsel for the assessee and stated that the PCIT is well within its power to assume jurisdiction u/s 263 of the Act even when the issue is under consideration in appeal before the ld. CIT(A). For this proposition, the ld. DR relied upon the decision of the Hon'ble Kerala High Court in the case of Prestige Marketing Division vs PCIT 155 taxmann.com 410 wherein their Lordships had held that the PCIT can interfere with the or....
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....ferring to the decision of the Hon'ble Kerala High Court in the case of Kelpunj Enterprises, (1977)108 ITR 294 (Ker) has reiterated the legal proposition that the Commissioner can interfere with the order of the Income Tax Officer on a point which was directly in appeal before the ld. CIT(A) under Sec.263 of the Act. The Hon'ble Kerala High Court in the case of Prestige Marketing [supra] while discussing the history of the decisions taken on the instant issue, has followed the decisions of the hon'ble Supreme Court in the aforesaid cases. 23. The Hon'ble Kerala High Court has referred to the earliest decision of the Hon'ble Supreme Court in the case in Commissioner of Income Tax vs. Shri Arbuda Mills Ltd 231 ITR 50 wherein the hon'ble Supreme Court interpreted the explanation (c) of section 263(1) as under: "The consequence of the said amendment made with retrospective effect is that the powers under Section 263 of the Commissioner shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in an appeal. Accordingly, even in respect of the aforesaid three items, the powers of the Commissioner under Sect....