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TMI Blog2016 (5) TMI 1187X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of Infosys Technologies Ltd.(2012 (1) TMI 76 - KARNATAKA HIGH COURT ) is squarely applicable to the facts of the case. Where the issue was not examined by the AO the ld.CIT was justified to remand the issue to the file of the AO for de novo verification. Assessee-company could not demonstrate before us that this issue was examined by the AO during the course of assessment proceedings. Hence, we are of the considered opinion that the order passed by the ld.CIT , in exercise of his power vested under the provisions of sec.263 of the Act, is proper and valid in law and the ld.CIT is justified in assuming jurisdiction u/s 263 of the Act. - Decided against assessee. - ITA No.748/Bang/2014 - - - Dated:- 22-4-2016 - SHRI VIJ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s order has stated that in the absence of complete evidence as to whether the income has already being offered to tax in the earlier years, has erred in setting aside the issue to the file of Assessing Officer, without appreciating the facts that details/documents were already filed with the CIT as well as before the learned assessing officer ill to audit objection note. 4. Without prejudice, the learned CIT erred in setting aside the issue back to the Assessing Officer, without appreciating the fact that the tax effect because of an order passed by the Assessing Officer is NIL since the sum of ₹ 853.859/-(net) was offered to tax is three different Assessment Year and also assessed to tax by the learned assessing officer in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... insurance company and ₹ 1,07,32,170/- received from clients i.e. Citibank, were not reflected in the financial statements of the assessee-company. The ld.CIT was of the opinion that the amount of ₹ 76,50,877/- received from the insurance companies was not offered to tax. In response to show cause notice, assessee-company had filed a detailed note vide its letters dated 26/2/2014 and 28/3/2014. The assessee-company s submissions were extracted by the ld.CIT at pages 3 4 of his order passed u/s 263. The sum and substance of the submissions of the assessee-company is that the net effect of the transactions were reflected in the Profit Loss account over a period of 3 years i.e. in the financial year 2005-06, 2006-07 and 2007-08 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny. The net effect of the transactions on account of this is reflected through P L Account. Hence, there was no loss of revenue to the department. As a result, twin conditions for assuming jurisdiction u/s 263 of the ld.CIT that the order being erroneous and prejudicial to the interest of the revenue are not satisfied. In the result, the ld.CIT ought not to have exercised jurisdiction u/s 263 of the Act. He further submitted that the receipt of money from insurance company as well as from clients is very much clear and obvious from the notes to accounts filed before the AO. Merely because the AO had chosen not to mention any thing in the assessment order on this issue does not mean that the issue was not examined by the AO. Finally he submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: The assessee-company is 100% subsidiary of M/s.Msource Corporation; US based company, hereinafter referred to as parent company . The parent company obtained some work from Citibank. In India, the assessee-company was executing work on behalf of its parent company in India. In the year 2004-05, some employees of the assessee-company had fraudulently transferred funds of Citibank to their personal account. On coming to know of this fraudulent activity and involvement of the employees of the assessee-company, parent company paid money to the Citibank a sum of ₹ 1,75,29,186/- on behalf of assesseecompany on 26/8/2005. Further the liquid assets and properties of the alleged offenders were frozen and legal actions were initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, it is a case of total non-application of mind by the AO on this issue. As held by the Hon ble Supreme Court in the case of Malabar Industrial Co. (supra), non application of mind by the AO confers jurisdiction u/s 263 of the Act. The submission of the assessee-company that in absence of loss of revenue, jurisdiction u/s 263 cannot be exercised, though it is settled principle of law that absence of loss of revenue does not confer jurisdiction u/s 263. The crux of the issue is that the fact that there was no loss of revenue has to be conclusively demonstrated. In the present case, one cannot come to a conclusion that there was no loss of revenue without verification of the assessment records for the assessment years 2006-07, 2007-08 and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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