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TMI Blog2024 (2) TMI 1229X X X X Extracts X X X X X X X X Extracts X X X X ..... ower u/s 263 of the Act would be invoked or not. The above said question is no longer res-integra and the said issue is well settled in several decisions. Further, the Hon ble Supreme Court in the case of Pr. CIT vs. Canara Bank Securities Ltd [ 2019 (10) TMI 1512 - SC ORDER] dismissed the Department s appeal affirming the view taken by the Bombay High Court [ 2019 (2) TMI 2020 - BOMBAY HIGH COURT] wherein the High Court held that the question whether the income should be taxed as business income or has arisen from other source was a debatable issue and the Assessing Officer had taken the plausible view that it was a business income after due enquiries and therefore not open for the Commissioner to take such an order in revision. . Therefore, following the ratio laid down in Malabar Industrial Co. Ltd. [ 2000 (2) TMI 10 - SUPREME COURT] we are of the considered opinion that the impugned order of the Ld. PCIT is found to be erroneous, accordingly, order impugned of the Ld. PCIT is hereby quashed.Appeal filed by the Assessee is allowed. - Shri M. Balaganesh, Accountant Member And Shri Yogesh Kumar U.S., Judicial Member For the Assessee : Sh. Lalit Mohan, CA For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s noted in the show cause notice. As per the valuation report of the M/s Ozone Overseas (P) Ltd. the FMV value of these shares is Rs.2,392/-. Thus, the FMV purchases exceeds the price of shares by Rs.97 per shares is not based on correct appreciation of facts and in law and thus unsustainable. 7. That the learned Pr. Commissioner of Income Tax has also failed to appreciate that, u/s 263 of the Act, an order of assessment cannot be set-aside to simply to make further enquiries and thereafter pass fresh order of assessment and as such, impugned order is contrary to law and hence, unsustainable. Prayer- It is therefore prayed that, impugned order dated 31.3.2023 under section 263 of the Act be held to be without jurisdiction and, therefore be quashed and appeal of the appellant company be allowed. 2. The brief facts of the case are that, Assessee filed its return of loss of Rs.1,30,78,091/-. The case was selected for scrutiny assessment. Assessment was completed u/s 143(3) r.w.s 143(3A) and 143(3B) of the Income Tax act, 1961 ( Act for short) by the National E-assessment Center, Delhi under E-assessment scheme vide order dated 16/03/2021 and current loss of Rs.1,30,78 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... much as prejudicial to the interest of Revenue merely because the Ld. PCIT had a different opinion. Further submitted that the entire observations of the Ld. PCIT is without supporting any evidence, therefore, the same deserves to be set aside. 5. The Ld. DR relying on the order of the PCIT submitted that the assessment order is erroneous and is prejudicial to the interest of the Revenue, therefore, the Ld. PCIT has rightly invoked the jurisdiction which requires no interference at the hands of the Tribunal. 6. We have heard the parties and perused the materials on record. It is evident from the record that the case of the assessee was originally selected for Complete Scrutiny under the E-Assessment Scheme, 2019 on following issues:- (i) Investment/Advances/Loans (ii) Business Loss (iii) Expenses Incurred for Earning Exempt Income (iv) Share Capital/Other Capital 7. A notice u/s 143(2) of the Act has been issued by the A.O. on 22.09.2019 to the assessee to submit the response with supporting documents on the issues for which the case was selected for scrutiny which includes the issue of investments which was the subject matter of impugned order pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of dividend declared during the year and three earlier years. 1. With respect to investments appearing in balance sheet during the year, kindly provide the following details: a) Nature of the asset b) Purchase consideration c) Date of purchase d) Mode of acquisition e) Source of funds for investment 2. Please furnish the detail of income received on the investment during the year. 3. Please furnish the detail of assets sold during the year along with calculation of capital gain thereon, if any. Annexure Kindly provide following details with respect to the investments during the year under consideration:- 1. Kindly provide following details with respect to the investments: a) Nature of investment. b) Amount of investment. c) Source of investment. d) Interest paid on the fund utilized. 2. Kindly provide monthly opening and closing balance during the year with respect to investments. 3. Kindly provide details of exempt income earned during the year under consideration. 4. Provide following details for the expenses incurred for earning exempt income. a) Direct expenses. b) Indirect exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ozone Overseas Private Limited, H-40, Bali New Delhi-110015. b. PAN :- AAACO3093J c. Face Value of each share :- Rs. 10 each share d. Number of shares allotted:- 9,00,00,000 shares e. Total value of the shares:- 9,00,00,000/- f. Payment received during Financial Year:- 9,00,00,000/- received in F.Y 2017-18 The balance details are under compilation and we seek time till the 15th February, 2021 for submission. 11. Further the assessee has submitted a reply dated 24/02/2021 by producing the copy of the IETR, computation of income of Ozone Overseas Pvt. Ltd. for last three years and also produced the audited financial statement of the said company. The assessee has also provided the valuation of the shares. The reply dated 24/02/2021 filed by the assessee are reproduced as under:- Date: 24.02.2021 The Assessing Officer National e-Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S. No. Nature of Asset Purchase Consideration (Rs.) Date of Purchase Mode of Acquisition Source of funds for Investment 1 607067 Equity Shares 1,39,35,04,086/- 17.11.2017 By Bank Transfer Issue of Preference Shares and Loan from Axis Finance Limited /Sale proceeds 2. 2667 Equity Shares 61,22,018/- 15.12.2017 By Bank Transfer Issue of Preference Shares and Loan from Axis Finance Limited /Sale proceeds 3. 342 Equity Shares 7,85,051/- 20.12.2017 By Bank Transfer Issue of Preference Shares and Loan from Axis Finance Limited /Sale proceeds 4. 244 Equity shares 5,60,095/- 20.12.2017 By Bank Transfer Issue of Preference Shares and Loan from Axis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25.03.2018 By Bank Transfer Issue of Preference Shares and Loan from Axis Finance Limited/Sale proceeds 15. 531 Equity Shares 12,18,895/- 25.03.2018 By Bank Transfer Issue of Preference Shares and Loan from Axis Finance Limited/Sale proceeds Copy of Ledger account of Investment is enclosed for records. The Shares were purchased at an average rate of Rs. 2295.47 per share. Valuation report of Ozone Overseas Shares is enclosed for records and approval. The Assessee Company has also sold part of the shares purchased on 7.12.2017 and 14.12.2017 at the purchase price to the following persons:- i. Dinesh Kumar Jhunjhunwela 8713 Shares 2,00,00,430/- ii. Gaurav Kumar Jhunjhunwela 13069 Shares 2,99,99,497/- iii. S Chand Properties (P) Ltd. 13069 Shares 2,99,99,497/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pening Balance Closing Balance April May - - June - - July - - August - - September - - October November 1,393,504,086 1,393,504,086 December 1,393,504,086 1,320,971,826 January 1,320,971,826 1,320,971,826 February 1,320,971,826 1,320,971,826 March 1,320,971,826 1,341,658,603 3. No exempt income was earned during the year from the Investments made. In fact, all the interest paid on the loan taken to fund the investment stands capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be invoked or not. The above said question is no longer res-integra and the said issue is well settled in several decisions. In the case of Malabar Industrial Co. Ltd. vs. Commissioner of Income Tax, (2000) 243 ITR 83 (SC). The Hon ble Supreme Court held as follows :- The phrase prejudicial to the interests of the Revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue. For example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of Revenue ; or where two views are possible and the Income-tax Officer has taken one view which the Commissioner does not 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. 14. Further, the Hon ble Supreme Court in the case of Pr. CIT vs. Canara Bank Securities Ltd., S.L.P.(C) No. 25651 of 2019, vide order dated 14th October, 2019 dismissed the Department s appeal affirming the view taken by the Bomb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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