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TMI Blog2015 (3) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... The AO has not examined the squared up transaction of loan of Rs. 2 lacs from Shri Vikash Choudhury and iv) The AO has not obtained the cash flow statement to verify the cash investments made by assessee. To challenge this, assessee has raised following eleven grounds: "1. For that in the facts and circumstances of the case the order passed by the Learned Commissioner of Income Tax u/s 263 of the Income Tax Act 1961 failed to consider that in the assessment proceedings the assessing officer had examined the issue relating to sale of shares and long term capital gains and hence the order passed by the CIT deserves to be quashed. 2. For that in the facts and circumstances of the case the order passed by the Learned Commissioner of Income Tax u/s. 263 of the Income Tax Act 1961 failed to consider that in the assessment proceedings the assessing officer had examined the issue relating to loan from Daymark & Sons HUF and hence the order passed by the CIT deserves to be quashed. 3. For that in the facts and circumstances of the case the order passed by the Learned Commissioner of Income Tax u/s. 263 of the Income Tax Act 1961 failed to consider that in the assessment proceedings th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 11. For that in the facts and circumstances of the case the order passed by the Learned Commissioner of Income Tax u/s 263 of the Income Tax Act 1961 is without any basis and hence the same be quashed." 3. Briefly stated facts are that the assessee for the relevant AY 2009-10 filed her return of income on 01.07.2009 and the same was processed u/s. 143(1) of the Act on 22.02.2011. Subsequently, assessee's case was picked up for scrutiny assessment by CASS. Accordingly, notices u/s. 143(2) and 142(1) of the Act were issued, served and responded. Assessment was framed u/s. 143(3) of the act by ITO, Ward-25(1), Kolkata vide order dated 16.05.2011. Subsequently, CIT-IX, Kolkata issued show cause notice vide No. Proceeding U/s. 263/2013-14/1197 dated 30.08.2013(which is given at page 30 of assessee's paper book) raising following four issues for that the assessment framed by AO u/s. 143(3) of the Act dated 16.05.2011 is erroneous and prejudicial to the interest of revenue: "1. During the relevant accounting year you had made an investment of Rs. 25,00,000/- in REC Bonds. It was sourced from the proceeds of Rs. 24,68,655/- arising from sale of 71,400 shares of a private Limited compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sale of shares and claimed exemption u/s. 54EC of the act as the same was invested in REC bonds. He further drew our attention to pages 3 and 4 of assessee's paper book wherein Income & Expenditure Account and copy of account of assessee are enclosed and the details of profit on sale of shares, details of no. of shares, year of acquisition and sale, cost and sale price are disclosed. According to Ld. Counsel, these documents were filed along with the return of income. He further took us to pages 17 & 18 of assessee's paper book, which is copy of notice u/s. 142(1) of the Act and particulars/details asked by the AO for completing the assessment. He particularly drew our attention to item nos. 3, 8 and 13 of the questionnaire issued by AO, which reads as under: "3. Details of Investment in Share, Mutual Fund, Bonds if any in the following Performa Opening Balance Purchased During FY 2007- 08 Interest Earned during 07-08 Whether exempted From tax Maturity During FY 2007-08 Closing Balance 8. Cash flow statement. 13. Details of Capital Gain - if any." Ld. Counsel further took us to pages 19 and 20 of assessee's paper book wherein copies of order sheet of assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he subject matter of revision proceeding u/s. 263 of the Act. As regards to the third issue in respect to squared up transaction of Rs. 2 lacs from one Shri Vikash Chowdhury, Ld. Counsel drew our attention to copy of Canara Bank Account statement maintained with, College Street Branch, Saving A/c. No. 13183 from where this amount of Rs. 2 lac is received on 05.05.2008 and repaid on 27.06.2008. He explained that the source of this credit is explained and even otherwise this is returned by account payee cheque in this very year after two months. According to him, even this entry on merits is explained and also this information was available with AO. In respect to fourth point, ld. Counsel stated that as far investments are concerned, only investment made by assessee is deposit in PPF A/c sum of Rs. 70,000/- during the year and that also by making withdrawal from Canara Bank on 02.04.2008 amounting to Rs. 70,000/- vide cheque no. 237156. The relevant copy of bank account is enclosed in assessee's paper book at page 37 and this was available before the AO during assessment proceedings. 6. In views of these arguments, Ld. Counsel for the assessee stated that this is not a fit case for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in section 56(2) of the Act in acquisition of shares and securities at below the fair market value is brought in w.e.f. 01.10.2009 by the Finance (No.2) Act, 2009. The transaction of the assessee is prior to 01.10.2009 and there is no scope for the AO to go into FMV of sale of shares. As regards the acquisition of shares of SBT Consultants Pvt. Ltd., these were acquired in FY 2004-05 relevant to AY 2005-06 and for that the enquiry is to be conducted in AY 2005-06, which is beyond the scope of revision proceedings under consideration. Even the very basis of selection for scrutiny under CASS was to enquire into investment in REC Bonds as demonstrated by the Ld. counsel before us from the very first notice issued for scrutiny assessment the source of investment of Rs. 25,00,000/- in REC Bonds u/s. 54EC of the Act by the assessee is out of the sale proceeds of shares of SBT Consultants Pvt. Ltd. at entire long term capital gains of Rs. 24,68,655/- was invested. The AO has examined the sale value of the above shares with reference to the bank statement produced before him and the transactions are through account payee cheques to prove the genuineness of the transactions. In respect to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by him did not require application of mind. Without application of mind the questions raised by him in the annexure to notice under Section 142 (1) of the Act could not have been formulated. The Assessing Officer was required to examine the return filed by the assessee in order to ascertain his income and to levy appropriate tax on that basis. When the Assessing Officer was satisfied that the return, filed by the assessee, was in accordance with law, he was under no obligation to justify as to why was he satisfied. On the top of that the Assessing Officer by his order dated 28th March, 2008 did not adversely affect any right of the assessee nor was any civil right of the assessee prejudiced. He was as such under no obligation in law to give reasons. The fact, that all requisite papers were summoned and thereafter the matter was heard from time to time coupled with the fact that the view taken by him is not shown by the revenue to be erroneous and was also considered both by the Tribunal as also by us to be a possible view, strengthens the presumption under Clause (e) of Section 114 of the Evidence Act. A prima facie evidence, on the basis of the aforesaid presumption, is thus conv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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