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2020 (9) TMI 197 - AT - Income TaxRevision u/s 263 - Reopening of assessment - nexus between the particular property acquired and the loan amount obtained for such purpose - HELD THAT - We do not agree with the contention of the Ld. AR since taking a view should be backed by reasons and that reasons should be demonstrated in the order itself with evidences brought on record and independent enquiry conducted. In this case AO has not at all gone into the area of examination of facts concerning the said nexus which is the subject matter of order u/s.263 by the Ld. Pr. Commissioner of Income Tax and therefore, on this issue, the AO has not formed any view. When no view has been taken, no enquiry has been conducted, when no reasons on facts has been placed on record, the order of assessment is bound to be erroneous in so far as prejudicial to the interest of the revenue. In the case of Rampyari Devi Sarogi vs. CIT 1967 (5) TMI 10 - SUPREME COURT and Tara Devi Aggarwal v. CIT 1972 (11) TMI 2 - SUPREME COURT has held that where Assessing Officer has accepted a particular contention/issue without any enquiry or evidence whatsoever, the order is erroneous and prejudicial to the interest of the Revenue. In the case of Malabar Industrial Co. Ltd. 2000 (2) TMI 10 - SUPREME COURT while upholding the judgment of the Hon‟ble High Court observed that Indeed, the High Court recorded the finding that the ITO failed to apply his mind to the case in all perspective and the order passed by him was erroneous. Therefore, the Hon ble High Court has rightly held exercise of the jurisdiction by the Commissioner u/s.263 was justified. Taking the totality of facts and circumstances and judicial pronouncements into consideration, we uphold the order passed u/s.263 of the Act by the Ld. Pr. Commissioner of Income Tax.- Decided against assessee.
Issues:
Appeals against revisionary jurisdiction u/s.263 of the Income Tax Act, 1961 for assessment year 2011-12. Detailed Analysis: 1. Revisionary Jurisdiction u/s.263 of the IT Act: The appeals arose from separate orders of the Principal Commissioner of Income Tax-2, Nashik, dated 29.01.2019, concerning revisionary jurisdiction under section 263 of the Income Tax Act. The Assessee contended that the revisionary jurisdiction undertaken by the Principal Commissioner was erroneous and prejudicial to their interests. The facts and issues in both appeals were deemed identical, leading to a consolidated hearing and disposal of both cases. 2. Assessment Proceedings and Reopening: In the case of ITA No.422/PUN/2019, the Assessing Officer had completed the assessment under section 143(3) r.w.s.147 of the Act. Subsequently, the Principal Commissioner found that the assessment order was erroneous as the nexus between the property acquired and the loan amount obtained was not proven. The Assessing Officer's acceptance of the interest on the loan as a cost of capital asset without factual verification was a key concern. 3. Arguments and Counter-Arguments: The Assessee argued that the assessment order was based on detailed verification and reasoning, citing relevant case law. However, the Department contended that the Assessing Officer failed to conduct an independent enquiry into the crucial nexus between the property acquisition and the loan, rendering the assessment order erroneous and prejudicial to revenue interests. 4. Judicial Pronouncements and Decision: The Tribunal analyzed various judicial pronouncements, including the Supreme Court's decisions in Rampyari Devi Sarogi v. CIT and Tara Devi Aggarwal v. CIT, emphasizing the need for proper enquiry and evidence in accepting contentions. Referring to the case of Malabar Industrial Co. Ltd. v. CIT, the Tribunal upheld the Principal Commissioner's order under section 263, considering the lack of factual examination by the Assessing Officer. 5. Final Decision and Dismissal of Appeals: After thorough consideration of facts, arguments, and legal precedents, the Tribunal upheld the Principal Commissioner's order under section 263 of the Act in both cases, leading to the dismissal of the appeals in ITA No.421/PUN/2019 and ITA No.422/PUN/2019 for the assessment year 2011-12. The combined result saw both appeals being dismissed on 03rd September 2020.
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