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TMI Blog2010 (11) TMI 531X X X X Extracts X X X X X X X X Extracts X X X X ..... 06. 2. Brief facts of the case are that, the assessee, an individual and proprietor of M/s. Energy Fabrics, in the relevant assessment year, was engaged in the manufacturing of cloth. He had filed his return of income declaring total income of Rs.2,14,609 accompanied with tax audit report under section 44AB in the specified Forms no.3CB and 3CD. The assessment was completed under section 143(3) on 13th July 2007, after making the additions of Rs.2,07,605 under section 40A(2)(b) and Rs.90,000 on account of low house hold withdrawals. 3. The learned CIT examined the assessment records and issued show cause notice to the assessee on 4th September 2008, pointing out that the assessment order was prima-facie prejudicial to the interests of Revenue on account of the reasons that - (i) the claim of gifts of Rs.8,83,700 was not true and, therefore, required further scrutiny and disallowance; (ii) the Assessing Officer, with regard to unsecured loans to the extent of Rs.45,66,000, could not verify this aspect and made necessary additions in respect of unproved sundry creditors and certain consequential cash credit to the extent of Rs.21,41,000. The learned CIT, after considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is contained, showing credit of demand draft in the bank account. He referred to Page-48 of the paper book, wherein, notice issued under section 133(6) by the Assessing Officer to various donors is contained in which the Assessing Officer had required the declaration regarding modes of transactions. Thereafter, learned Counsel referred to Pages-48A to 50 of the paper book to demonstrate that the donor Mrs. Mehrunissa Mohd,. Abbas Muqri, was a lady of means and could gift the impugned amounts. Learned Counsel submitted that the donor's husband Shri Mohd,. Abbas Muqri, died long back and she has no child. He referred to declaration of gift contained at Page-47 of the paper book which was filed before the Assessing Officer also. As regards other three gifts, learned Counsel referred to Pages-43 and 43A of the paper book, wherein, the photocopy of three demand drafts received from Shri Mufti Barkatulla, s/o Shri Abdul Qadir, are detailed as under:- Demand Draft No. Date Amount (Rs.) 317514 10.5.2004 1,59,500 317472 5.5.2004 1,60,000 317586 26.5.2004 1,64,200 7. Learned Counsel refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2006) 286 ITR 470, the Hon'ble Calcutta High Court has held that the provisions of section 263 cannot be invoked to correct each and every type of mistake or errors committed by the Assessing Officer. It is only when an order is erroneous that the section will apply and incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. Learned Counsel pointed out that there is no incorrect assumption of fact or incorrect assumption of law because the Assessing Officer has adopted one possible view. Further, it was held in this case that the phrase "prejudicial to the interests of the Revenue" has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of Revenue as a consequence of an order passed by the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue. 10. The Hon'ble Rajasthan High Court in CIT v/s Ganpat Ram Bishnoi, (2008) 296 ITR 292 (Raj.), has, inter-alia, observed jurisdiction under section 263 cannot be invoked for making short enquiries or to go into the process of assessment again and again merely on the basis that more enquiry ought to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... J (Mum.) 177, the Tribunal, inter-alia, held that the jurisdiction under section 263 cannot be assumed by the Commissioner of Income Tax in a casual and arbitrary manner if there is no material on record to satisfy prima-facie that the order of the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. Merely stating that no further enquiries were made by the Assessing Officer, would not suffice invocation of jurisdiction under section 263 and there must be some material which must be pointed out to show as to how lack of enquiry has caused prejudice to the Revenue. 15. In Triveni Engineering Works Ltd. v/s DCIT, (2004) 87 TTJ (Del.) 93, the Tribunal held that the Commissioner of Income Tax does not have unrestricted and unflattered powers to set aside the order modifying an assessment merely on the basis of difference of opinion. Commissioner of Income Tax cannot invoke jurisdiction under section 263 merely because he feels that a particular line of investigation which would have been effective and useful for the Revenue had not been adopted by the Assessing Officer. 16. Learned Counsel further submitted that in the tax audit report of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch demonstrate the complete non application of mind by the Assessing Officer to certain issues fundamental to passing of a reasoned order. Before invoking the jurisdiction under section 263, it is well settled law that the twin conditions of the assessment order being erroneous insofar as it is prejudicial to the interests of the revenue have to be satisfied. Merely because the Assessing Officer after making enquiries does not make a reference to the same in the assessment order, that would not make the assessment order erroneous. In the present case, the learned CIT invoked jurisdiction under section 263 for the reason that the gifts aggregating to Rs.8,83,700 received by the assessee and credited to his capital account, were not duly enquired by the Assessing Officer. In this regard, he had issued a detailed questionnaire to the assessee which was replied by the assessee explaining all the queries raised by the Commissioner of Income Tax. Further, as regard gift of Rs.4,00,000 received from Mrs. Mehrunissa Mohd,. Abbas Muqri, the main objection of the learned CIT was that the said gift could not be said to be a gift from relative as contemplated under section 56(2)(v). On this as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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