9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (2) TMI 816 - AT - Income TaxRevision u/s 263 - CIT on examination of records noted that during the assessment proceedings the Assessee had not proved Genuineness of Loans and Creditworthiness of the Lenders - HELD THAT - When we apply the provisions of the Section 263 to the Assessment Order it is observed that admittedly the AO during assessment proceedings had not carried out necessary inquiries to prove Creditworthiness of the Lenders Genuineness of the transaction. Also admittedly during the Assessment Proceedings the assessee had not filed any Loan confirmation from Lenders admittedly one of the Lender had not filed any Return of Income for A.Y.2018-19 and another Lender had shown meager Income in the Return. Admittedly the Lenders had no sufficient resources to lend such huge amounts to the assessee without any Interest. During the hearing before this Tribunal we asked the Ld.AR has the Loan been Repaid? The Ld.AR submitted that the Loan has not yet been repaid. Thus admittedly even after so many years the so called Loan is outstanding and the Lender has not received any Interest. This itself is outside the human probability and explains that the entire transaction is non-genuine. Thus we are of the opinion that the Assessment Order was erroneous and prejudicial to the interest of revenue hence we uphold the Order u/s 263. CIT was right in holding that the assessment order is erroneous and prejudicial as at the time of Assessment AO had not carried out inquiries to prove Genuineness of loan and creditworthiness of lender. Also we have perused the so called details filed by the Assessee after the Assessment Proceedings we are of the opinion that even after the Assessment Proceedings during 263 proceedings the Assessee has failed to prove the genuineness of the transaction. - Decided against assessee.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS Validity of the Order under Section 263 The legal framework under section 263 allows the Pr. CIT to revise an assessment order if it is erroneous and prejudicial to the interests of the revenue. The Tribunal noted that the Assessing Officer had not conducted necessary inquiries to establish the creditworthiness of the lenders and the genuineness of the transactions. The failure to conduct such inquiries rendered the assessment order erroneous and prejudicial to the revenue, thus justifying the invocation of section 263. Adequacy of Inquiries by the Assessing Officer The Tribunal observed that the Assessing Officer had not obtained essential documents such as loan confirmations and returns of income from the lenders during the assessment proceedings. The onus was on the assessee to prove the genuineness of the loans and the creditworthiness of the lenders, which was not fulfilled. The Tribunal found that the lack of proper inquiry by the Assessing Officer justified the Pr. CIT's decision to invoke section 263. Justification for Setting Aside the Assessment Order The Tribunal upheld the Pr. CIT's decision to set aside the assessment order for further verification, as the initial assessment lacked sufficient inquiry into the unsecured loans. The Tribunal emphasized that section 263 empowers the Pr. CIT to direct further inquiry if the initial assessment is found lacking, and there was no requirement for the Pr. CIT to record specific findings before setting aside the order. Genuineness of Transactions and Creditworthiness of Lenders The Tribunal found that the assessee failed to demonstrate the genuineness of the transactions and the creditworthiness of the lenders. The lenders, Mr. Prakash Loharkar and Ms. Mayura Mirajkar, did not have sufficient income or resources to justify the loans given to the assessee. The Tribunal noted inconsistencies, such as interest-free loans being provided by individuals who had borrowed at an interest rate, which was beyond human probability and indicative of non-genuine transactions. Procedural Requirements under Section 263 The Tribunal dismissed the assessee's argument that the Pr. CIT had not provided specific findings before setting aside the assessment order. It clarified that section 263 does not mandate specific findings before directing further inquiry and that the Pr. CIT had provided the assessee with sufficient opportunity to present its case. The Tribunal cited the Supreme Court's decision in CIT Vs. Amitabh Bachchan, which held that a detailed notice is not a statutory requirement under section 263. SIGNIFICANT HOLDINGS The Tribunal upheld the order under section 263, affirming that the assessment order was erroneous and prejudicial to the interests of the revenue due to inadequate inquiries. It reiterated the principle that the Pr. CIT has the authority to revise an assessment order lacking necessary inquiries, as per Explanation 2 to section 263. The Tribunal dismissed all grounds of appeal raised by the assessee, emphasizing that the procedural and substantive requirements under section 263 were met. In conclusion, the Tribunal found no merit in the assessee's arguments and upheld the Pr. CIT's order under section 263, dismissing the appeal.
|
