TaxTMI 
TaxTMI 
2025 (12) TMI 263
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.... assessment order is neither erroneous nor prejudicial to the interest of revenue. The order passed u/s 263 is contrary to law, illegal, and unsustainable. 2. The appellant reserves the right to add, amend or modify any of the ground/s of appeal. 3. Brief facts of the case are that the assessee had filed its Return of Income on 30.10.2018, declaring total income of Rs. 1,13,20,340/- and the assessment u/s 143(3) was completed on 28.12.2019 determined total assessed income of assessee was Rs. 1,42,49,710/-. Subsequently, the case of assessee was reopened u/s 147 on the basis of information received on insight portal of the department which was flagged in accordance with the risk management formulated by CBDT, thereby it is surfaced that the assessee has made bogus sale and purchase transaction from certain parties. After deliberations regarding queries raised by the Ld. AO and response furnished by the assessee, an estimated addition @ 5% amounting to Rs. 22,88,971/- was made on bogus purchase of Rs. 4,57,79,434/- transacted with M/s Abhishek Enterprises and M/s Pratyush Steels. The case of assessee was subsequently, examined by the Ld. Pr. CIT, Central, Bhopal, thereby ....
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....has not properly inquired and verified the creditworthiness of the lender company to establish the genuineness of the loan transaction, and, furthermore did not verify / examine, whether the amount of Rs. 55,00,000/- meets the criteria of section 115BBE r.w.s. 68- 69D of the Act, and whether it should have been taxed accordingly u/s 115BBE. 4. Based on aforesaid issues, it was the observation of Ld. Pr. CIT that while framing the assessment, Ld. AO failed to examine the aforesaid 4 issues, as there was no evidence of enquiry, verification or examination of such issues by Ld. AO on the assessment records. Accordingly, the aforesaid issues are well within the meaning of Explanation 2(a) and (b) to Section 263(1) of the I T Act to be taken up for verification through revisionary proceedings, consequently, the order of Ld. AO passed u/s 147 dated 24.03.2023 has been termed to be erroneous, so far as prejudicial to the interest of revenue. 5. As emanating from the order of Pr. CIT u/s 263, the assessee neither attended the hearing nor submitted any reply to the first notice dated 08.03.2025, therefore, a final show cause was issued on 12.03.2025, in response to which the assessee ....
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.... the matter being evident from the record (such amounts have not been paid within the 'due date'), the AO has failed to inquire and verify whether these amounts / payments comply with the terms of provision of sec. 36(1)(va) r.w.s. 2(24)(x) of the Act and whether a disallowance is called for in view of abundant clarity brought by the SC Judgement in Checkmate Services (P.) Ltd. [2022] 143 taxmann.com 178 (SC). Therefore, the AO did not inquire and verify and passed the assessment order without proper consideration of law and application of mind on this issue. 6. Further, as regards the objection of assessee that donation details were duly reported in the books of accounts and were available with the AO during assessment proceedings, is not tenable. It is observed that the assessee has debited its P&L account by sum of Rs. 1,69,676/- under the head Donation. However as per ITR, relevant column of 80G the details of donation qualifying for 100% deduction or 50% deduction has been left blank. The crux of the matter is, in view of the debit to the P&L account and the relevant column (pertaining to s.80G) in ITR being left blank, the AO should....
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....ake of clarity: Bharat Benefication & Power Pvt. Ltd., Raigarh AY 2018/19 ITA no. 336/RPR/2025 (Assessee) Submission of assessee 1. Rs. 70 lakh Sky Alloys & Power Pvt. Ltd. i) Impugned assessment reopened on the issue of alleged bogus purchases from two parties. ii) In the reopened assessment, as per the settled law, AO could not have made roving enquires in respect of other issues not covered by subject matter of reopening. iii) Scope of reassessment proceedings was thus limited. Within limited scope, if AO did not make other enquiries, order of reassessment could not be termed to be erroneous or prejudicial to the interest of revenue. iv) Material not provided to assessee Material in respect of alleged transactions with Sky Alloys not provided to assessee. It is on the basis of such alleged material only that the reassessment order is being branded as erroneous. Without providing material, such allegation of reassessment order being erroneous and prejudicial could not have been leveled. v) In view of material not provided, opportunity of hearing itself denied. Against the basic requirement of sec. 263. Ord....
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....s, which stands met by the facts & figures mentioned above. vi) All these documents, facts & figures are on record. Nothing else was required to be looked into. After considering these, AO did not draw adverse inference. vii) Matter already looked into. Outside the scope of sec. 263. Reliance on: - - CIT vs Gabrial India Ltd. 203 ITR 108 (Born.). - Hill Queen Investment (P.) Ltd. Vs Pr. CIT (2021) 62 CCH 70 (Kol. Trib.). - Colour Publications P. Ltd. vs Pr. CIT (2018) 196 TTJ 257 (Born.), para 17. - Magic Landcon LLP & Anr. Vs Pr. CIT (2020) 204 TTJ 785 (Del.). viii) Ld. Pr. CIT only looked at returned income, that too of this year. Total resources available in the hands of lender (of about Rs. 12.18 crore) considered by AO and thereafter credit worthiness accepted. Income only is not relevant. Reliance on: - - Anjani Associates vs ITO, ITA no. 27/RPR/2018 dt. 10.08.2018, relevant findings at para no. 16, last 6 lines. - Pr. CIT vs AMI Industries (India) P. Ltd. (2020) 424 ITR 219 (Born.), relevant observations at para no. 20. -BST Infratech Ltd. Vs DCIT (2023) 199 ITD 6 (Kol.). - Del....
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....pleteness: 4. That in period under consideration the assessee has received unsecured loan from M/s TPS Fininvest Leasing Pvt. Ltd., having its Regd. Office at Room No. 42-P, 2nd Floor, Sarvamangal Building, 5 Clive Road,, Kolkata- (WB) 700001,. MOBILE NO. 9893233141 AND EMAIL- DRGSAGRA [email protected] M. The PAN of the Lender is AAACT3827B. All the loan has been accepted through banking channel and the loan is duly Confirmed by the lender. The transactions are verifiable from the bank statements and confirmation letter, copies thereof are also being enclosed herewith. However, for ready reference summary of the transactions is being reproduced below: Particulars Opening Balance Loan taken Repayment of loan Closing Balance Unsecured loan 0 55,00,000.00 2,22,750.00 52,77,250.00 Interest accrued 0 360693.00 36,069.00 3,24,624.00 Total 0 58,60,693.00 2,58,919.00 56,01,874.00 i. The Purpose to procure Un-secured loan is to cover the Working capital requirement. ii. Rate of Interest :- 9% on Reducing balance, Total Interest paid :- Rs. 3,60,693/- and TDS on Interest deducted :- Rs. 36,069/- iii. C....
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....PR/2020 dt. 18.03.2024, relevant findings on para 27. 11. In backdrop of aforesaid submission, it was the prayer by the Ld. AR that the invocation of provisions of section 263 and setting aside the impugned order of Ld. AO by passing an order u/s 263 is unsustainable as the same is passed without appreciating the facts and evidence on record properly, therefore, the reopening assessment order passed by the Ld. AO should not be treated as erroneous so far as it is prejudicial to the interest of revenue, the order u/s 263 therefore, is contrary to the mandate of law, illegal and liable to be struck down. 12. Per contra, Ld. CIT-DR representing the revenue vehemently supported the order of Ld. PCIT. 13. We have considered rival submissions, perused the material available on record and case laws relied upon by the assessee. As the present appeal of the assessee has come up to challenge the validity of revisionary proceedings initiated by the Ld. PCIT u/s 263 of the Act and to adjudicate as to whether the impugned order u/s 263 can sustain on account of certain errors in the reopening assessment order u/s 147 due to which the interest of revenue has been prejudiced. To answer t....
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..... AO and had not doubted about the requisite ingredients to invoke the provisions of section 68 of the Act. In view of such facts and circumstances, Ld. PCIT exceeded the revisionary jurisdiction conferred upon him under the provisions of section 263, so far as the issue of unsecured loans is concerned as the same was settled after necessary enquiries by the Ld. AO. No disallowance by Ld. AO cannot be construed as an error in the assessment, so as to be revisited under the revisionary jurisdiction by the Ld. PCIT. 16. In terms of aforesaid observations, facts and circumstances, we are of the considered view that the order of Ld. PCIT would sustain to the extent of first 3 issues i.e., (i) unsecured loan, (ii) employee's contributions of PF & ESI and (iii) the expense claimed under the head "donation", but regarding Fourth issue qua the unsecured loan of Rs. 55,00,000/-, received by the assessee from TPS Finvest Leasing Pvt. Ltd., the order of Ld. PCIT found to be not in accordance with the mandate of law, as the same has been considered extraneously exceeding the jurisdiction deliberated upon him under the provisions of section 263 of the Act. 17. Consequently, the impugned o....