9911796707
TMI Blog2022 (5) TMI 945X X X X Extracts X X X X X X X X Extracts X X X X ..... sment order dated 31.05.2017 passed u/s 143(3) was erroneous and also prejudicial to the interest of revenue - we find that the AO issued a questionnaire along with notice u/s 142(1) dated 19.12.2016. In response thereto, the assessee had filed his reply regarding the queries raised by the AO. It is also transpired from record that notices u/s 133(6) of the Act were issued. Thereafter, he framed the assessment. We find that the assessee in response to notice u/s 263, had duly explained the transaction related to M/s Maa Kalika Foundaries Pvt. Ltd., introduction fresh capital and also description CAS CHQ XFER WD . Looking to the material placed before us, the Pr.CIT has not made out a case of any prejudice caused to the Revenue. The law is well settled that for exercising power u/s 263 twin conditions are required to be satisfied (i) that the order should be erroneous and; and (ii) it should cause prejudice to the interests of Revenue. It is not the case where the assessee failed to substantiate his claim, rather the explanation along with supporting evidences were placed before the assessing officer and the learned Pr.CIT. In our considered view merely on the basis of susp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case. 5. That the Pr. CIT has failed to appreciate that the assessee appellant has filed the confirmations of advance from customer as requisite by the assessing officer, thereafter, the assessing officer has taken a view, which is a possible view. Hence, the Pr. CIT has erred in law and on facts in setting aside the assessment to be redone afresh. 6. That the observation of the Pr. CIT are based on surmises and conjectures and on the basis of the different view taken by the Assessing Officer after framing the Assessment Order Section 143(3) and do not afford any legal justification to the findings given. 7. That the proceedings under Section 263 are initiated at the instance of Assessing Officer and the order passed by the Pr. CIT is clearly without application of mind as it refer to many irrelevant issues hence the order under section 263 is liable to be quashed. 8. That the Pr. CIT has erred in not providing proper and adequate opportunity to Appellant to place the material on record and the impugned order passed is against the principle of natural of justice. 9. That all the facts and circumstances of the case and the material available on record ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was completed by the assessing officer and passed assessment order dated 31.05.2017 on Income of Rs. 17,82,584.00 against the Return Income of Rs. 13.45.220.00. The assessee has not filed any appeal against the said order. Subsequently, the Pr. CIT, Dehradun has issued notice U/s 263 dated 21.01.2020 and initiated the proceedings U/s 263 of the Income Tax Act, 1961 proposed to set-a-side the assessment proceeding on the following grounds: 1) Advance from Customer from M/s Maa Kaila Foundries Private Limited; 2) Introduction of fresh capital of Rs. 18,00,000.00 on 02.04.2014; 3) Entries reflected in the bank account as OWN CHQ XFER DP; In response to the alleged notice, the assessee filed a reply before the Pr. CIT, Dehradun and evidences. Thereafter, set aside the assessment order dated 31.05.2017 by passing the order dated 09.03.2021, after making following observation: 4. The assessee had simply submitted a verbal narration of his case without furnishing any documentary evidence in support of his claim as required vide show cause notice dated 21.01.2020. The assessee has not submitted copy of bank statement showing the repayment of liabilities due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act, in which part payment was made. ISSUE-2 1) That, the Ld. Pr. CIT has doubted the introduction of fresh capital of Rs. 18,00,000.00 on 02.04.2014 in the show cause notice, without appreciating that the assessing officer has verified the transaction and adequate inquiry was conducted during the assessment proceedings, such as, the assessing officer raised the specific query during the hearing and the assessee duly reply the same (Kindly Refer Page 31-32 Point No.4) vide reply filed before the assessing officer. Further the assessee explained the source of the fresh capital of Rs. 18,00,000.00 has been given out of the opening balance available at Rs. 19,05,053.00 with the assessee, in his bank account with UBI a/c no.513702010001423 as on 31.03.2014, copy of the bank account is enclosed for your ready reference(Page 13 of P/B), out of which the assessee has introduce the capital of Rs. 18,00,000.00 on 02.04.2014. The source of the balance available is as under :- Sr. No. Date Particular Amount Remarks 1) 31.03.2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing officer. The amount is self explanatory, that, the assessee has received unsecured loans from his wife, therefore, the transaction is identifiable, genuine and creditworthy The same is also appreciated by the Pr.CIT during the hearing and no adverse comment was made in the impugned order by the Pr.CIT. In view of the facts and circumstances, the Pr.CIT has erred in initiating the proceedings U/s 263 and also in passing the impugned order and set-a-siding the assessment order being erroneous and prejudicial to the interest of revenue, is itself illegal, bad in law and without jurisdiction, on the following grounds: a) No Material on record that the assessment order passed is erroneous and prejudicial to the interest of revenue. That, the Pr.CIT failed to bring anything on record that how the assessment order passed is erroneous and prejudicial to the interest of revenue, when the judicial court has categorically observed that the Pr.CIT has to demonstrate in the notice and in the order passed that assessment order passed by assessing officer is erroneous and prejudicial to the interest of revenue, in the present case the Pr. CIT has failed to do so, merely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order under the facts and circumstances of the present case that the Assessing officer grossly failed to examine the issues and verify the correctness of the claim of the assessee. He submitted that the Assessing Officer accepted the claim of the assessee in a mechanical manner. 5. We have heard rival submissions, perused the material on record and gone through the impugned order. The assessee is aggrieved by the action of the learned Pr.CIT for revising the assessment order passed u/s 143(3) of the Act dated 31.05.2017. It is the contention of the assessee that the action of initiation of proceedings u/s 263 is contrary to the settled principle of law. It is submitted on behalf of the assessee that the relevant explanations/ evidences were called by the Assessing Officer and virtually filed before the Assessing Authority, who had verified and accepted the same. The assessee has placed reliance on the judgment of the Hon ble Delhi High Court rendered in the case of CIT vs. Anil Kumar Sharma 335 ITR 83 and the decision of the Hon ble Allahabad High Court in the case of CIT Vs. Rashid Exports 66 Taxmann.com 38. We find that in the present case the Pr.CIT has decided the issue r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he liability of 3,12,286/- remained. This amount was subsequently paid through account payee cheques for Rs. 1,31,350/- on 23.10.2015 and 1,80,936/- on 14.03.2017. The account copy from out books from subsequent years is filed herewith. There is no discrepancy in the account and the confirmed account copy from the party is again filed. That the fresh capital introduced to the tune of Rs. 18,00,000/- on 02.04.2014 transferred from savings account with Union Bank number 513702010001423 to the business account was from the opening balance of Rs. 19,05,053/- in the assessed saving account. In this opening balance of Rs. 19,05,053/- as on 01.042014 the assessee had received transfer of Rs. 4,12,980/- from his salary account with m/s Durga Ispat Pvt. Ltd. and Rs. 1,00,000/- from his loan account with M/s Durga Ispat on 31.03.2014. Rs. 13,00,000/- were transferred by the bank out of the Cash Credit account on 31.03.2014. The bank usually transfer some amount from unused CC limit and to show enhanced deposits in saving account. The saving Bank and a/c copies from M/s Durga Ispat of last year are attached herewith. That the transaction made between the assessee and family memb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken one of the possible views. Merely because the learned Pr.CIT has a different view that should not be the basis of initiation of proceedings u/s 263 of the Act. 8. There is no dispute with regard to the fact that learned Pr.CIT is empowered to exercise power under Section 263 of the Act, if twin conditions envisaged under the aforesaid provision are satisfied i.e. the order sought to be revised is erroneous and prejudicial to the interest of the Revenue. Therefore, it is to be examined whether the aforementioned requirement of law is satisfied in the present case. Section 263 of the Act has further undergone amendment vide Finance Act, 2015 whereby Explanation 2 is inserted. For the sake of clarity Explanation 2 is reproduced as under: Explanation 2. For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner, - (a) the order is passed without making inquiries or verification which should have been made; (b) the order is passed allowing any relief without inq ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
