TaxTMI 
TaxTMI 
2026 (5) TMI 294
X X X X Extracts X X X X
X X X X Extracts X X X X
....tation & Disclosure Standards. ii. Assessee has claimed Large "any other amount allowable as deduction" claimed in Schedule BP of return. iii. Dept has been written off and the debtor has not shown deemed income u/s 41." 3. Thereupon assessment was completed u/s 143(3) r.w.s 144B of the Act on 22.09.2022 accepting the income computed by CPC. However, Ld. Revisional Authority was not satisfied and on the basis of assessment record observed that assessee had claimed long term capital loss amounting to Rs. 2,30,83,333/- on account of sale of unquoted shares and ld. Revisional Authority was of view that assessing officer had not raised any query in respect of the same. 4. Further, the ld. Revisional Authority observed that assessee has claimed balance written off of Rs. 125.04 lakhs and ld. Revisional Authority having examined the notices issued by the assessing officer observed that although assessee company has filed reply but assessing officer failed to verify the genuineness of the sale transaction to the parties in respect of which the assessee had claimed balance written off and if the same are put to tax by the assessee in previous years. 5. The assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d V/s CIT in 243 ITR 83(SC) has held that a bare reading of section 263 of the Act, makes it clear that the prerequisite to exercise of jurisdiction by the CIT suo-moto under it is that the order of the ITO is erroneous in so far as it is prejudicial to the interest of revenue. The CIT has to be satisfied of twin conditions, namely, (i) the order of AO sought to be revised is erroneous and (ii) it is prejudicial to the interest of revenue. It has also held that the phrase "prejudicial to the interest of revenue" is not an expression of art and is not defined in the Act. Understood in its ordinary meaning it is of wide import and is not confined to loss of tax. The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the revenue. If due to an erroneous order of the ITO, the revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the revenue. The phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. 8.1 Further, it has been held in the case of Venkatakrishna Rice Co. V. CIT (1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2015. Accordingly, by exercise of power conferred u/s 263 of the Income Tax Act 1961, the assessment order passed by the AO on 22.09.2022 u/s 143(3) r.w.s. 144B of the Act for the A.Y. 2020-21 is set-aside to the above extent, with the direction to pass an order afresh after conducting required enquires and]verification in accordance with law, keeping in view the observation made above and after affording reasonable opportunity of being heard to the assessee. With these directions, the proceedings u/s 263 are disposed off." 6. The assessee has come up in appeal raising following grounds: "1. That the PCIT has erred in law & facts of the case in passing order u/s 263 of the Income Tax Act holding that the assessment order dated 22.09.2022 is erroneous and prejudicial to the interest of revenue which is highly unjustified, uncalled for and needs to be set aside. 2. That the PCIT has erred in law & facts of the case in invoking the powers u/s 263 and passing the order directing the Assessing Officer to pass the assessment order afresh on the issue of disallowance of bad debt amounting to Rs. 1,25,04,820 which islaw and uncalled for. 3. That the P....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ties against whom the amounts were written off. Again at page No. 41-44 assessee has provided copy of notice in regard to the issue and for convenience we reproduce relevant query: "2. Kindly refer to the query on "Balance written off Rs. 1,25,04,820/- and your reply vide response dated 08.04.2022. In this regard, it is noticed that you have not furnished details in Col.No.47 in Schedule A-P& Profit and Loss Account (which is meant for the bad debts written off) for the financial year 2019-20 of ITR as to PAN, Aadhaar, amount etc. On examination of the ledger folios submitted it is seen that in the cases of Gurugram Wines, Great Wine and Lake Forest Wines that: 1. The sales were made in the FY 2018-19 2. You had allowed discounts even though there were no receipts from business 3. Even without a single payment by the party, you had made sales further also. Therefore you are requested to furnish reasons why the amount of Rs. 1,25,04,820/- should not be disallowed." 10. This was also responded by the assessee and the copy of the reply available at page 45 -46 of the paper book. Assessee had specially responded to the query of the assess....