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TMI Blog2016 (1) TMI 1255X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Various Observations and directions made by the Ld. CIT in his section 263 order are either incorrect or are untenable in law and various case laws relied upon by the Ld. CIT are not applicable to the appellant's case being distinguishable on facts. (e) The order under appeal is ambiguous on the issues of share capital and depreciation as findings made are riot clear and no directions &' are issued. 2. That without prejudice to ground n01 above, the Ld. CIT has grossly erred in law by making an addition of Rs. 37,14,820/- u/s 68 of the I.T Act,1961 holding that the total unsecured loans accepted by the appellant during the year remained unexplained and unproved and the action of Ld CIT is perverse and has caused gross & great injustice to the appellant and that proper opportunity of being heard on the issue has not been allowed and the order under appeal cannot be termed as a speaking order and is based on incomplete and inadequate appreciation of facts of the case and various case laws relied upon by the Ld. CIT are not applicable to the appellant's case 'being distinguishable on facts: 3. That the Ld. CIT had no jurisdiction to invoke section 263 of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,640/- has been made. So, the assessee's total income has been assessed at Rs. 8,57,500/-. 5. The Ld. CIT reviewed the assessment made by the Assessing Officer u/s 263 with the direction to pass a fresh order. Feeling aggrieved, assessee has come up before the Tribunal by filing the present appeal. 6. Ld. A.R. for the assessee challenging the impugned order contended inter alia that Ld. CIT has erred in invoking the provision contained U/S 263 of the Act as the order passed by the Assessing Officer was not erroneous and prejudicial to the interest of revenue; that Ld. CIT has failed to appreciate brought forward balance of previous year which could not have been considered in the Assessment Year under consideration thus passed an ambiguous order and relied on the judgement cited as CIT Vs Parmeshwar Bohra 301 ITR 404 (Raj.). 7. On the other hand, Ld. D.R. to repel the arguments addressed by Ld. A.R. by contended inter alia that sequence of simultaneous and contemporaneous deposits are having direct correlation in deposit and withdrawal of amounts; that there is fresh introduction of share capital for which Ld. CIT has directed the Assessing Officer to make addition of Rs. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er enhancing or modifying the assessment and may direct for fresh assessment. 12. Ld. A.R. contended that the order passed by Assessing Officer after applying his mind was neither erroneous nor prejudicial to the interest of revenue and as such, impugned order is not tenable. 13. So far as the question of unsecured loan ofRs.12,00,000/-- raised by the assessee from Sunita Garg is concerned, the Assessing Officer has made discrete inquiry and finding the explanation furnished by the assessee untenable, made an addition of Rs. 9,00,000/-. However, during the inquiry conducted by Ld. CIT u/s 263 of the Act, he came to the conclusion that during the year under consideration, assessee has raised unsecured loan of Rs. 46,14,820/- and this fact has lost sight from the scrutiny of the Assessing Officer. 14. Ld. CIT on the basis of material provided by the assessee during proceedings u/s 263 of the Act, came to the conclusion that the parties in whose names loans were allegedly raised, were having no capacity or creditworthiness of advancing such loans and returned the following findings: "As regards the details of fresh unsecured loans furnished by the assessee as above were examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies on the assessee to prove the same establishing all the three ingredients relevant for section 68 of the Income tax Act viz. establishing the identity, creditworthiness of the alleged parties and genuineness of the transaction whereas in case of the assessee by furnishing their copies of one ITR and extract from bank account merely at best the identity of the parties could be proved whereas the other two ingredients viz. genuineness of transaction and creditworthiness of the parties remained totally unexplained and unproved. Rather, the facts of the case as briefly discussed above in a few cases establish that the creditworthiness of the parties remained not only unproved but rather disproved on the basis of their petty income shown in the ITRs and looking at their bank accounts showing no significant balances except for the entries relating to alleged loans to the assessee which were also just after depositing the same amount in their bank accounts. The sums were clearly, therefore, liable for addition under Section 68 of the Income-tax Act and the same are hereby added u/s 68 of the IT Act as follows:- Total unsecured loans taken during the year Rs.46.14.820/- Less: added ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have raised the loan of Rs. 1,50,000/- from Satyawati Gupta whose gross total income is Rs. 1,50,152/- having taxable income 'nil'. Amount of Rs. 1,50,000/- was deposited in the account of lender on 11.03.2008 and withdrawal was made in the name of assessee on 13.03.2008; vii) that assessee shown to have raised loan of Rs. 12,55,000/- from Sunder Swarup Gupta having gross income as per return at Rs. 1,04,310/-, taxable income 'nil'. Amount of Rs. 11,37,720/- was deposited in the account of the lender on 25.09.2007 and withdrew Rs. 11,35,000/- in the name of assessee on 25.09.2007, viii) that an amount of Rs. 70,000/- was deposited in the name of lender on 16.11.2007 and withdrawal was made in the name of assessee on 19.11.2007 and ix) similarly an amount of Rs. 50,000/- was deposited in the name of lender on 20.11.2007 and withdrew in the name of assessee on 20.1.2007 itself. 16.1 The credits in the bank accounts of lenders appear just prior to or on the date of transfer of money in the assessee's name. It is also evident that though the copies of ITRs are filed, the parties are virtually and actually non- taxpayers in real sense as no or almost negligible tax ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not prejudicial to the Revenue or if it is not erroneous but it is prejudicial to the Revenue- recourse cannot be had to section 263(1) of the Act. (b) Every loss of revenue as a consequence of an order of the A.O. cannot be treated as prejudicial to the interests of the Revenue. For example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue: or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income-tax Officer is unsustainable in law. (c) To invoke the suo motu revisional powers to reopen a concluded assessment under section 263, the Commissioner must give reasons; that a bare reiteration by him that the order of the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, will not suffice; that the reasons must be such as to show that the enhancement or modification of the assessment or cancellation of the assessment or directions issued for a fresh assessment were called for, and must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able at the time of examination by him and to take into consideration even those events which arose subsequent to the order of assessment." 16.4 In view of what has been discussed in the preceding paras, we are of the considered view that Ld. CIT in the instant case was not having limited powers only to scrutinize the material which was available before the A.O. rather he was entitled to examine any other material available at the time of examination by him to protect the interest of the Revenue. So, the judgement (supra) is of no support to the appellant. 17. In case of DIT Vs Jyoti Foundation in T.A. 267/2013 the Hon'ble Jurisdictional High Court held that that the Commissioner has no power to go into the estimate made by the Assessing Officer by reexamination of accounts and determining the figures himself at higher figure. But judgement (supra) is not applicable to the facts and circumstances of the case because this is not a case of estimation made by the Assessing Officer on lower side rather it is a case where the Assessing Officer has erroneously lost sight of the unsecured loans raised by the assessee during the year under consideration which is prejudicial to the i ..... 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