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TMI Blog2016 (10) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Pri. CIT further erred of stating reasons in the order that Learned Assessing Officer has passed order without making ,proper inquiry and verification of various financial and documentary evidence furnished during assessment assessment proceedings by the appellant. 3 ] PRAYERS (i) On the facts and circumstances of the case the appellant submits that the order passed by the Learned Pri. CIT is bad in law as the said order is passed against the principles of natural justice." 2. The brief background in this case is that original assessment order was passed by the Assessing Officer u/s 143(3) dt 28-03-2014 making few disallowances / additions and assessing the income at Rs. 35,50,14,339/- as against return of income declaring loss of Rs. 11,29,98,987/-. Subsequently, the Ld. PCIT issued a show cause notice to the assessee u/s 263. The assessee filed detailed reply to the show cause notice, but the Ld. PCIT was not satisfied and he held the assessment as erroneous and prejudicial to the interest of the revenue and directed the Assessing Officer to pass a fresh assessment order in terms of the directions given in the order passed u/s 263. Being aggrieved, assessee file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. PCIT as well as details and documentary evidences shown to us by both parties. It is noted that show cause notice u/s 263 was issued on two grounds, one of the grounds was with regard to allowing the interest expenses of Rs. 3.96 crores debited in the P&L Account on the ground that the same was allowed by the Assessing Officer without any verification of the loans / funds on which interest was paid was whether utilized entirely for the purposes of business of the assessee or not. The assessee submitted detailed reply which was examined by the Ld. PCIT and he accepted the arguments of the assessee and dropped this ground. But with respect to the other ground, i.e. challenging the allowability of operational loss of Rs. 8.79 crores by the Assessing Officer without making proper verification, though the assessee made exhaustive reply before the Ld. PCIT demonstrating that overwhelming details and evidences were furnished before the Assessing Officer and Assessing Officer had duly examined the same and applied his mind before allowing the same while framing the assessment order, but the Ld. PCIT was not satisfied and he held the assessment order as erroneous and prejudicial to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roneous and prejudicial to the interest of revenue within the meaning of the provisions of section 263 of the Act. ii) It is further noticed that you have claimed interest or financial expenses of Rs. 3,96,78,563/- as per sch.8 of the profit and loss account which is also accordingly allowed by the Assessing Officer without any verification so as to ascertain whether the loan / funds raised on which interest paid is utilized entirely for the purpose of business or not. 3. Therefore, in view of the above, the assessment order passed by the Assessing Officer u/s. 143(3) of the Act dated 28.03.2014 is found to be erroneous and prejudicial to the interest of revenue, and therefore you are hereby given an opportunity to attend before the undersigned on 04.03.2015 at 3.30 P.M. either in person or through a representative duly authorized in writing in this behalf. If you do not wish to avail of this oppor tuni ty of being heard in person or through authorized representative, you may show cause in writing on or before the said date which will be considered before any such order u/s. 263 of the Act is passed." (Emphasis supplied in bold letters) 6. Thus, from the above, it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e just two days back after much representation and on the Assurance of same payment we have attached all he contract notes, tallied and numbered with broker's ledger account but due to lack of time (i.e. only 2 days). We could not earmarked and highlight every transactions to be matched with AIR details. (Although all details are furnished and the record considering of 3500 plus pages in total 7 sets). We therefore request you to give us opportunity to marked and matched with AIR details in person before your goodself or otherwise give reasonable time to reconcile all AIR details at the earliest opportunity. We hope you will consider our above request by affording one more opportunity before finalizing the said Assessment." 8. Further, vide its reply dated 24-1-2014, the assessee again enclosed details of purchases of shares including all opening split shares with sources of funds, borrowed funds, equity shares and DEMAT position of shares during the year. The assessee also submitted detailed break up of all the shares and co-relating the same with the respective source of funding. Further, vide its reply dated 24-1-2014 submitted to the Assessing Officer, the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and demat statement with detail explaining the ownership of shares, source of funds along with complete supporting documents were submitted to your goodself on 24-1-2014 personally with value of Ras.54=26 crore in value along with the documentary evidence. With reference to your point no.10 as per your Questionnaire dt.18-11-2013 is already explain and relevant documents are submitted on 11-11-2013. Point No.8 already explained by our letter dt.11-11-2013. According to us we have to comply your requirement of Point No.9 & Point No.11 which is under verification and preparation stage therefore we require 15 days by which time we are hopeful to complete and comply all your requirements of your Questionnaire dt. 27-12-2013." A perusal of the aforesaid letter clearly brings out a fact before us that the assessee had submitted exhaustive details and documentary evidences to the AO with a view to justify its operational loss from share trading. All the documentary evidences and details were also in the knowledge of Addl.CIT and thus, these were examined not only by the AO but also by the Addl.CIT. Under these circumstances, we fail to understand as to on what basis the Ld. PCI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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