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TMI Blog2014 (1) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... is clearly shows that not only the AO has applied his mind on the facts of the case but also it has been approved by his immediate superior authority, who himself must have applied his mind before according approval to the assessment order - The order of AO was not erroneous and prejudicial to the interest of Revenue - The conditions for invoking power u/s 263 was not fulfilled - Decided in favour of assessee. - ITA Nos.4148 to 4152/Mum/2013, ITA Nos.3966 to 3969/Mum/2013 - - - Dated:- 31-10-2013 - SHRI H.L.KARWA SHRI N.K.BILLAIYA, JJ. For the Appellant : Shri Rakesh Joshi For the Respondent : Shri Girija Dayal ORDER Per Bench : This common order shall govern the disposal of nine appeals, which have been preferred by two separate assessees against two separate orders of the learned CIT, Mumbai passed under Section 263 of the Act, pertaining to A.Y. 2004-05, 2005-06,2006-07, 2007-08 2008-09, respectively. 2. Since both the parties agreed that the facts and issues involved in all these appeals are identical, therefore, all the cases have been heard and disposed of by this common order for the sake of convenience and brevity. 3. First we will take up ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nity to show cause as to why such order should not be passed u/s.263, setting aside the aforesaid assessment order dated 27-12-2010, with a direction to the AO to frame the assessment de novo, after conducting necessary verification/enquiry." 6. The assessee filed a detailed reply to this notice of the CIT explaining that during the course of the assessment proceedings, the assessee has filed complete details in respect of share application money received from various companies. It was also explained that the assessee has also furnished the Income Tax PAN number and all related information to the AO which has been thoroughly examined by the AO. Therefore, it cannot be said that the AO has completed the assessment proceedings without applying his mind which would render the assessment order erroneous and prejudicial to the interest of the revenue. The detail submissions made by the assessee before the CIT did not find any favour from the CIT, who was of the firm belief that the AO did not make detailed investigation in respect of the companies who have given share application money to the assessee. The CIT was also of the firm belief that in the case of some of the applicant compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e revenue. 8. Per Contra, learned DR strongly relied upon the findings of the CIT. 9. We have carefully perused the assessment order and the order of the CIT passed under Section 263 of the Act. A bare reading of Section 263(1) makes it clear that the prerequisite to the exercise of jurisdiction by the Commissioner suo motu under it, is that the order of the AO is erroneous in so far as it is prejudicial to the interests of the Revenue. The Commissioner has to be satisfied with twin conditions, namely, (i) the order of the AO sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent, recourse cannot be had to Section 263(1) of the Act. For these observations, we draw support from the decision of the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. Vs. CIT, reported in (2000) 243 ITR 83 (SC). Further, the error envisaged by Section 263 is not one which depends on possibility or guesswork, it should be actually an error of either of fact or of law. Let us now consider the enquiries made by the AO during the course of the assessment proceedings in respect of share application money. Vide notice dated 19- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. Copies of these summons are exhibited from pages 134 to 148 of the Paper Book. The gist of these summons show that the AO asked for the details of share application money and loans invested/given to the four companies during A.Y.2003-04 to 2009-10. Among these, two companies, namely, M/s Turakhia Ferromet Pvt. Ltd. and M/s Standard Conduits Pvt. Ltd., are assessees under consideration. The AO had further asked to produce the books of accounts and copy of the bank statement for the above relevant period in which loans/share application money has been given to the above concerns. We further find in the Paper Book from pages 149 to 176, replies filed by these companies. Thus, it is clear that the AO has made specific enquiries in relation to the trading loss as well as share application money to which the assessee has given specific reply with supporting documentary evidences during the course of the assessment proceedings. 11. Our view is further fortified by the order sheet entries dated 27- 10-2010, 19-11-2010, 23-11-2010 and 6-12-2010, which have been exhibited at pages 26 27 of the Paper Book. The AO made the following two observations in respect of the two issues unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 27/12/2010.". This clearly shows that not only the AO has applied his mind on the facts of the case but also it has been approved by his immediate superior authority, who himself must have applied his mind before according approval to the assessment order. 12. After considering the entire facts and the material evidences brought on record, reproduced elsewhere in the order by us, in our view, the order of the CIT under Section 263 of the Act, does not stand on its own leg. We, accordingly, set aside the order of the CIT u/s 263, dated 28-3-2013 and restore that of the AO. Assessee succeeds. Appeals are allowed . 13. Now, we will take up appeals (ITA Nos. 3966 to 3969/M/2013) filed by the assessee, M/s Standard Conduits Pvt. Ltd., for assessment years 2004-05 to 2007-08. 14. The impugned order in the aforesaid appeals is dated 30-3-2013, which has been passed by the CIT under Section 263, wherein the CIT has invoked his jurisdiction for assessment years 2004-05, 2005- 06,2006-07 2007-08, respectively. 15. Similar issue was also involved in appeals of assessee i.e. M/s Turakhia Ferromet Pvt. Ltd, (ITA Nos. 4148 to 4152/M/2013), wherein we have already given our thoughtf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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