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TMI Blog2022 (4) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... : "1) The Principal Commissioner of Income-tax was not justified in assuming jurisdiction/s.263 without satisfying conditions. 2) The appellant submits that the Principal Commissioner of Income-tax ought not to have invoked provisions of section 263 on the very same point on which the Assessing Officer had made inquiry and taken position. 3) The appellant further submits that the Principal Commissioner of Income-tax did not appreciate the settled position of law where proceedings u/s.263 do not stand to sustain if Principal Commissioner of Income-tax opts to take different view in the same matter. 4) The appellant submits that the Statutory Auditor's sole disclaimer that "In absence of details of foreign exchange gain/loss, we are n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serious doubts on the correctness of foreign exchange loss by Assessee Company was ascertainable and same was required to be disallowed. On the bases of aforesaid observation, the ld. Pr. CIT issued show cause notice to assessee on 05.03.2018 in fixing the date on 12.03.20163 as to why the assessment order should not be set-aside as it is erroneous and prejudicial to the interest of the Revenue. 3. In response to the show cause notice, the assessee filed its reply on 14.03.2018. The reply of the assessee is extracted in para 4 of order of ld. Pr. CIT. In reply to the assessee contended that remarks of auditor's "absence of details" does not make the assessment order erroneous in so far as prejudicial to the interest of the Revenue. It is o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s nothing but demonstrably emanating out export transaction and was a legitimate claim allowed by the AO. The assessee prayed for dropping the revision proceedings. 4. The reply of assessee was not accepted by the ld.Pr.CIT. The ld.Pr.CIT recorded that he has gone through the submission of assessee carefully and the same is not acceptable to him. The financial cost of Rs. 2.05 crore includes foreign exchange loss. The auditor's qualified the foreign exchange loss in absence of details. The above qualification made by the auditor raised serious doubt about the correctness of claim of foreign exchange loss and that Clause- (a) of Explanation-2 of section 263 is applicable in the case. The AO passed the assessment order without making enquiri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der consideration, the assessee suffered foreign exchange loss Rs. 64,55,764/- and foreign exchange gain of Rs. 29,24,350/-, thus, the net foreign exchange loss was of Rs. 35,31,404/-. 6. The corresponding ledger of overseas importer were also filed before the ld. Pr. CIT. The ld.AR of the assessee submits that the AO passed assessment order after making sufficient enquiry up to his satisfaction. The observation of ld.Pr.CIT in the show cause notice is incorrect. The assessee furnished complete details for verification of the loss before the ld.Pr.CIT. None of the details was examined by him. The ld.Pr.CIT simply concluded that assessment order was passed without making enquiry or verification which should not have been made. The ld.Pr.CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO while passing the assessment order. Since the assessment order is silent on the issue and was passed without making proper enquiry, the order is erroneous and in so far as prejudicial to the interest of the Revenue. The auditor has not examined the details of such foreign exchange fluctuation as no details were provided to him. 9. We have considered the rival submission of both the parties and perused the material available on record. We have also deliberated on various case laws relied by the ld AR for the assessee. There is no dispute that in the assessment order there is no reference about the examination of foreign exchange fluctuation loss. However, we find that during the assessment proceeding the AO issued notice first notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding on the reply so furnished by the assessee repeated his observation that assessment order was passed without making enquiries or verification. The Hon'ble Jurisdictional High Court in Aryan Arcade Ltd., Vs PCIT (2019) 412 ITR 277 (Gujarat) held that merely because Commissioner held a different belief that would not permit him to take the order in revision, it if further held that when Assessing Officer made full enquiry, he made up his mind, the notice of revision is not valid. 11. In CIT Vs Nirma Chemical Works (P) Ltd (2009) 309 ITR 67, the Hon'ble High Court also held that when assessing officer after making due inquiries had adopted one of the view and granted partial relief, merely because Commissioner took a different view o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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