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TMI Blog2016 (12) TMI 1605X X X X Extracts X X X X X X X X Extracts X X X X ..... when the estate of late Shri V.C. Mehta, in whose case the additions have been made on protective basis, have owned up the amount lying in the bank account and have also given an undertaking to the Commissioner of Income Tax (Appeals) that they stand by the disclosure made by them in relation to the above said bank account and will not be claiming any refund of the taxes already paid except the inter-se adjustment of taxes paid amongst various assessment years, no useful purpose will be served in making a fresh assessment on protective basis in the hands of the assessee merely because that some of the income was to be added in assessment year 2006-07 instead of the entire addition made in assessment year 2007-08 on protective basis. Thus ustification in invoking the provisions of section 263 of the Act for passing the above said revision order by Ld. PCIT - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... A search action under section 132(1) of the Act was carried out in the case of M/s. Mohit Diamonds Pvt. Ltd. along with other group concerns. Further information had been received from Additional DIT (Inv) that the said account in HSBC Bank, Switzerland belonged to late Shri V.C. Mehta, father in law of the assessee. The assessment, thus, in the case of late Shri V.C. Mehta was reopened under section 147 of the Act. During the assessment proceedings of late Shri V.C. Mehta it was intimated that all the property was lying with the executors of the estate of late Shri V.C. Mehta. After considering the evidences and submissions, the AO concluded that the executors of the estate of late Shri V.C. Mehta had filed a revised return of income for assessment year 2007-08 on 26.03.15 declaring the income of ₹ 1,57,86,368/-. The AO, however, concluded that the said return was invalid. The AO, thus, added an amount of ₹ 1,57,86,368/- being the peak balance for the assessment year 2007-08 in the hands of estate of late Shri V.C. Mehta on substantive basis. However, protective additions were made in the hands of the beneficiaries of the estate of late Shri V.C. Mehta including the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the estate of late Shri V.C. Mehta against the assessment order in the case of late Shri V.C. Mehta, the Ld. A.R. accordingly submitted the copy of grounds of appeal in the case of late Shri V.C. Mehta which for the sake of convenience is reproduced as under: "Ground No.1: On the facts and in the circumstances of the case and in law, the learned AO erred in passing the assessment order arbitrarily. The appellant submits that the order of Assessment is bad in law and needs to be struck down. Ground No. 2: On the facts and in the circumstances of the case and in law, the learned AO erred in observing that the legal heir claimed the beneficial owner-ship of the HSBC Bank Account. The appellant submits that the said observations of ld. A.O. is arbitrary and without appreciating the correct facts and circumstances of the case. Ground No. 3: On the facts and in the circumstances of the case and in law, the learned AO erred in observing that the appellant did not co-operate by not providing the copy of HSBC Bank statement. The appellant submits that the said observations of Id. A.O. is arbitrary and without appreciating the correct facts and circumstances of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will not be claiming any refund of the amount of taxes already paid except for inter-se adjustment of the taxes paid amongst various assessment years. The said copy of the letter dated 17.10.2016 submitted by the executors of estate of late Shri V.C. Mehta to the Commissioner of Income Tax (Appeals) for the sake of convenience is reproduced as under: "Estate of the Late Mr. VraiIal C. Mehta October 17th, 2016 To, Commissioner of Income Tax (Appeals) - 51, Room No. 619, Aayakar Bhavan, M.K. Road, Mumbai - 400004. Respected Sir, Re: Estate of Late Mr Vrajlal C. Mehta AY: 2006-2007 PAN: AADPM5837E Sub: Letter of Undertaking This is in reference to the appeal filed by us for A.Y. 2006-07 on 11.12.2015 before Your Honour. In the above referred appeal, we have taken various grounds including the general ground challenging validity of the assessment order passed by the Assessing Officer. We would like to clarify that we have filed our returns of income for the above assessment year, i.e. for A.Y. 2006-07 as well as for A.Y. 2007-08 and 2012-13 in which income in the form of peak balance in the bank account with HSBC Bank, Geneva being account No. 5091334050 has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se the additions have been made on protective basis, have owned up the amount lying in the bank account and have also given an undertaking to the Commissioner of Income Tax (Appeals) that they stand by the disclosure made by them in relation to the above said bank account and will not be claiming any refund of the taxes already paid except the inter-se adjustment of taxes paid amongst various assessment years, no useful purpose will be served in making a fresh assessment on protective basis in the hands of the assessee merely because that some of the income was to be added in assessment year 2006-07 instead of the entire addition made in assessment year 2007-08 on protective basis. It is a settled position in law that powers under Section 263 of the Act can be exercised by the CIT on satisfaction of twin conditions viz. the Assessment Order should be erroneous and prejudicial to the Revenue. Thus, this power cannot be exercised unless the CIT is able to establish that the order of the Assessing Officer is erroneous and prejudicial to the Revenue. The order of the AO under the circumstances cannot be held to be prejudicial to the interest of the Revenue. We, therefore, do not find a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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