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TMI Blog2022 (12) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... e for the deduction claimed by the assessee in the revised return of income. Thus, in the absence of any inquiry by the AO, we are of the view that it is a case of nonapplication of mind. At the time of hearing, a query was also raised to the AR to justify whether any inquiry has been made by the AO with respect to the claim made by the assessee. AR failed to make any satisfactory reply. Thus it can be safely concluded that there was no enquiry made by the AO during the assessment proceedings despite the fact that all the necessary details were available before the AO. PCIT has made reference to the explanation 2 of section 263 of the Act in holding the assessment order as erroneous in so far prejudicial to the interest of revenue. In this regard we find that the PCIT has not made any reference to the explanation 2 of section 263 of the Act in the notice issued u/s 263 of the Act, thus we are of the view that no reference to the explanation 2 of section 263 of the Act cannot be made while holding the order of the assessment as erroneous in so far prejudicial to the interest of the Revenue. See M/S. SHREEJI PRINTS PVT. LTD. [ 2021 (9) TMI 108 - SUPREME COURT] Hon ble Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee in the revised return of income has claimed such loss as revenue in nature by virtue of the provision of section 43AA of the Act, which was brought by Finance Act, 2018 with retrospective effect from the Assessment Year 2017-18 i.e. the year under consideration. Thus the assessee has claimed such loss in the revised return of income. As per the Ld. PCIT, all the above stated facts were not verified by the AO during the assessment proceedings. As such, the AO without looking into all facts as discussed above and without making any inquiry has allowed such loss to the assessee in the assessment framed u/s 143 of the Act. Thus, the Ld. PCIT proposed to revise the assessment order passed u/s 263 of the Act on account of non-verification of the capital loss as discussed above. 5. The assessee in response to such show cause notice vide letter dated 21/03/2022 submitted that the impugned loss was treated as capital loss initially and therefore the same was mentioned by the Auditor in the Audit Report dated 30/11/2017. However, subsequently there was an amendment by Finance Act, 2018 and such loss was allowed as deduction under the provisions of section 43AA of the Act. Such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 15 of paper book. The reason for filing the revised return of income was also furnished by the assessee which can be verified from page 12 of paper book. The Ld. AR further drew our attention on the submission made to the AO during the assessment proceedings which are placed on pages 66 to 70 and 77 to 285 of the paper book. In view of the above the Ld. AR contended that all the necessary details were available with the AO and therefore it is incorrect to hold that the assessment has been framed by the AO without application of mind. On the other hand, the Ld. DR vehemently supported the order of the ld. PCIT. 9. We have heard the rival contentions of both the parties and perused the materials available on record. The facts of the case are not in dispute which have been elaborately discussed in the preceding paragraph. From the preceding discussion we note that all the necessary details with respect to the deduction claimed by the assessee under the provisions of section 43AA of the Act were available before the AO during the assessment proceedings. The revised return wherein the deduction was claimed was filed before the AO which was duly accepted by the AO in the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g made by CPC it is appearing that the above deduction of Rs.1,14,10,638/- as per revised return is not allowed to the assessee it is therefore again requested that the amount of Rs.1,14,10,638/- is allowable expense as claimed in revised return be allowed. 9.2 We also find that that the assessee has furnished necessary explanation for claiming deduction under the provisions of section 43AA of the Act on account of impugned loss claimed during the assessment proceedings. 9.3 However, we find that there was no question raised by the AO during the assessment proceedings with respect to deduction claimed by the assessee u/s 43AA of the Act. 9.4 Admittedly, the provisions of section 43AA of the Act were brought by the Finance Act 2018 with retrospective effect i.e. assessment year 2017-18. Moreover, there was a dispute between assessee and the income tax department as the deduction claimed by the assessee in the revised return of income was denied by the AO under the intimation generated u/s 143(1) of the Act. Now the situation before us is like this that the assessee has furnished the necessary details in support of his claim as discussed above but there was no whisper/ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is in this backdrop, Tribunal found the inquiryconducted by the Assessing Officer not to be in accordance with law (Pages 137 to 148) and the view taken by the Officer not to be a plausible one (Pages 148- 153), holding that since it was a case of no inquiry , Commissioner rightly remitted the case back to the Assessing Officer, for carrying out assessment in accordance with law (Pages 153-158). 117. At this juncture, it be also observed that by the very same order, the Tribunal also decided the appeals filed by the Agent (Pages 159 to 200), inter alia, observing as under, to which no challenge is laid: An overview of the above features indicates that the agricultural produce was not proved; transportation of the same to UAA was also not proved; bills issued by UAA were not genuine; cash received from UAA shown at Rs.1.00 crore did not appear in their books of account; the expenses claimed were not backed by any vouchers/bills; and all the expenses were claimed to have been incurred on one single day and that too in cash. We fail to comprehend as to how the assessment order accepting the genuineness of carrying out the agricultural operations and earning a huge inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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