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TMI Blog2018 (6) TMI 1052X X X X Extracts X X X X X X X X Extracts X X X X ..... n for the Commissioner to thereafter reopen the issues on mere apprehension and surmises - Without any material without any basis, the CIT could not have remanded the proceedings to the AO to carry out further inquiries in order to ascertain whether the remittances were genuine or were in the nature of hawala transactions - His principle thrust was to the effect that assessee did not produce the precise bank details of the foreign remittances even before him. There is nothing on the record to suggest that he called upon the assessee to do so and the assessee failed or refused to do so - thus we find no error in the view of the Tribunal reversing view of the Commissioner - Decided in favor of assessee. - R/TAX APPEAL NO. 1376 of 2007 - - - Dated:- 11-6-2018 - MR. AKIL KURESHI AND MR. B.N. KARIA, JJ. For The Petitioner : Mr Manish Bhatt For Ms Mauna M Bhatt(174) For The Respondent : Mr Bandish Soparkar For Mrs Swati Soparkar(870) ORAL JUDGMENT ( PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. This appeal was admitted for consideration of following substantial question of law: Whether on facts and in the circumstances of the case, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was of the opinion that the Assessing Officer had not carried out proper inquiries with respect to both the issues. The assessee had not placed before the Assessing Officer or before the Commissioner, the accounts from which such transactions were made. He did not dispute either the identity of the donor or his creditworthiness. He, however, doubted the very genuineness of the transaction. He, therefore, remitted the matter back to the Assessing Officer for carrying out further inquiries by his order dated 24.03.2006. 5. The assessee carried the matter in appeal before the Tribunal. The Tribunal, by the impugned judgement, set aside the order of the Commissioner holding that the case did not warrant exercise of powers under section 263 of the Act and the Commissioner had wrongly invoked such powers. The Tribunal was of the opinion that necessary material was on record. Assessing Officer had considered the material and a particular view was taken. CIT (A) could not have exercised revisional powers for taking a different view. 6. In this background, the present appeal at the hands of the Revenue arises. Learned counsel Mr. Manish Bhatt for the department supported the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of Indusind Bank will be filed in due course of time. The assessee produced supporting documents along with the said reply. 9. In another reply dated 14.06.2004, the assessee further averred as under: b) The other part of the capital comprises of amounts remitted from abroad during the period when the Assessee was NRI. The funds remitted were out of his personal capital generated over the period of years during his residence abroad. The remittance has been as follows: Financial Year Amount 1996-1997 ₹ 34,16,200 1997-1998 ₹ 48,00,000 Further, we would also like to mention that these funds have been directly remitted to M/s. West Inn Limited through Demand Draft being send directly from abroad. This is evidenced from the Balance Sheet of the Assessee as on 31.03.1997 and 31.03.1998. The necessary approvals from the Reserve Bank of India for the acquisition of Shares in M/s. West Inn Limited from funds remitted from abroad was duly obtained by the Assessee and the same has been filed earlier. The e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r from approved banking channels. f) He is a high net worth person having accumulated capital abroad to lend the loan to the Assessee. g) He is assessed to tax and covered in the Block Assessment. Therefore, we submit that the entire source of the funds as per the statement of affairs filed before your honour are fully explainable and consequently the application thereof in form of the various assets are also explained. 10. In a further reply dated 25.06.2004, the assessee, pointed out that his brother Suresh Galani is also assessed by the same Assessing Officer and further stated as under: Sir, as already stated earlier Shri Suresh Galani has been residing in Dubai since 1976 and over the period of years, he has established himself with good reputation in the business and social circles. He is reputed businessman and commands goodwill with the bankers. Copy of letters of bankers is enclosed. He is also a member of India Club, Dubai since 1990 and one of the trustee of Shri Gurudwara (Sindhi Temple), being a very old and active religious organization in Dubai. He is also the trustee with Indian High School in Dubai. He is an active member in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not explained. In fact, you in your explanation dated 25.06.2004 clearly expressed your inability to furnish any evidence in this regard stating that since the remittances from Shri Suresh Galani, either to hi NRE Account or otherwise from abroad were at different intervals and therefore, the exact nature/source of the funds from where these remittances were effected could not be identified on one to one basis. As you failed to establish the genuineness of these transactions, the amounts which aggregated to ₹ 3,78,06,337/- credited in the name of Shri Suresh Galani should not have been accepted as genuine. From the records, it is seen that no details of sources from where these amounts were transferred were filed. As Shri Suresh Galani is your read elder brother, there could be no excuse for not furnishing such details by you in the course of block assessment proceedings. You could have asked your brother to clearly disclose the mode and manner in which these amounts were brought to India and which later found place in your books by filing the copies of his bank accounts from where such payments were made to you. From a perusal of records, it clearly emerges that you did sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There are judgements galore laying down the principle that the Assessing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between lack of inquiry and inadequate inquiry . If there was any inquiry, even inadequate, that would not be itself, give occasion to the Commissioner to pass orders under section 263 of the Act, merely because he has different opinion in the matter. It is only in cases of lack of inquiry . that such a course of action would be open. In Gabriel India Ltd's case (supra), law on this aspect was discussed in the following manner:... . ] 16. In case of Income Tax Officer vs. DG Housing Projects Ltd. reported in 343 ITR 329, Delhi High Court observed that a finding that the order is erroneous is a condition or requirement which must be satisfied for exercise of jurisdiction under section 263 of the Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 19. In the context of present case, applying the ratio of the above noted decision, the scope of the Commissioner's power of revision u/s. 263 of the Act would be, when the Assessing Officer conducts no inquiry or proper inquiries or does not apply his mind to the legal issues arising out of the material on record, the revisional powers would be available. On the other hand, if the Assessing Officer has conducted proper inquiries and come to legal conclusions which are plausible, the Commissioner would not be justified in invoking revisional jurisdiction directing further inquiries or taking a different view. 20. In this context, we may recall, the Assessing Officer had examined two issues. With respect to introduction of the capital, the assessee had pointed out that he was an NRI for over two years and he had made foreign remittances over a period of time. With respect to the unsecured loan of ₹ 3.87 crores received from his brother also, the assessee had provided necessary details which were cal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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