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TMI Blog2012 (3) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee by : Shri K Gopi Respondent by: Ms. Vijayaprabha O R D E R Per N.R.S. Ganesan (JM) This appeal of the assessee is directed against the order of the Administrative Commissioner u/s 263 of the Income-tax Act dated 11-06-2009 for the assessment year 2005-06. 2. Shri K Gopi, the ld.representative for the assessee submitted that the Administrative Commissioner on the basis of the internal audit objection exercised his power u/s 263 of the Income-tax Act. Referring to the judgment of the Punjab Haryana High Court in Commissioner of Income-tax vs Sohana Woollen Mills 296 ITR 238 (P H), the ld.representative submitted that a mere audit objection and the fact that a different view can be taken should not be enoug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. In this case, according to the ld.representative, the order is neither erroneous nor prejudicial to the interest of the revenue. 3. On the contrary, Ms. Vijayaprabha, the ld.DR submitted that audit objection can be a basis for reopening the assessment u/s 147 of the Act. On the same line, the audit report can be a basis for revising the order of the assessing officer u/s 263 of the Act if it is found that the assessment order is erroneous and prejudicial to the interest of the revenue. Referring to the order of the Administrative commissioner, the ld.representative submitted that the Commissioner only remanded back the matter to the file of the assessing officer for reconsideration in the light of the judgment of the Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of section 263 of the Act shows that jurisdiction thereunder can be exercised if the Commissioner of Income-tax finds that the order of the Assessing Officer was erroneous and prejudicial to the interests of the Revenue. Mere audit objection and because a different view could be taken, are not enough to say that the order of the Assessing Officer was erroneous or prejudicial to the interest of the Revenue. The jurisdiction could be exercised if the Commissioner of Income-tax was satisfied that the basis for exercise of jurisdiction existed. No rigid rule could be laid down about the situation when the jurisdiction can be exercised. Whether satisfaction of the Commissioner of Income-tax for exercising jurisdiction was called for or n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the assessee. The Collector of Customs imposed penalty of Rs.25 lakhs on the assessee u/s 112 of the Customs Act. The Income-tax Officer found that the value of the gold confiscated by the Customs Authorities was liable to be added in the hand of the assessee u/s 69A of the Act. Accordingly an addition was made. In those circumstances, the Gujarat High Court held that when the assessee has no explanation about the nature and source of investment or acquisition of the gold value of such gold was deemed to be the income of the assessee and there was no question of treating the value as a deductible trading loss on its confiscation because such income did not fall under the head Income from profit gains of business or profession . In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble as trading loss. 7. In the case before us, the issue is entirely on a different footing. The assessee, admittedly running a hospital. The assessee raised funds by issuing shares and debentures. The investment in the shares and debentures by respective person was doubted and the addition was made u/s 68 of the Incometax . The question arises for consideration is when the addition was made u/s 68 of the Act, in the absence of satisfactory explanation regarding the source of the creditor in the shares and debentures, can we say that the credit is not a business income. Admittedly, the assessee is a registered company. It has no other source of income. It is not the case of the revenue that the directors or other shareholders invested the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not represent the particulars of the family jewelleries sold but it was concealed business profit. On further appeal before the High Court, the finding of the Tribunal was confirmed. The assessee took the matter before the Apex Court. the apex court, after considering the facts of the case found that there was no evidence to show that the finding of the Tribunal was not supported by any evidence or it was perverse. Accordingly, the finding of the Tribunal was confirmed by the Apex court. the Apex court summarized its findings on page 424 of the ITR as follows: The position may thus be summed up : In the business accounts of the appellant we find certain sums credited. The explanation given by the appellant as to how the amounts came t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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