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TMI Blog2024 (7) TMI 1479X X X X Extracts X X X X X X X X Extracts X X X X ..... d he received profit on sale of share of SMS Infrastructure Ltd. He received interest also. The Assessing Officer has not examined any of the issues and not called for any details from the assessee. The assessee filed some details about borrowed funds which were given to certain parties out of which the assessee himself has disallowed @ 12%, and for the remaining parties, the Assessing Officer has added. The assessee himself has claimed huge interest and also filed loss return of income. It was the duty of the Assessing Officer to call for the details such as what is the reason for borrowing such huge amount; what is the amount of money utilised for the purpose of business; why he has given loans to various parties; what is the receipt of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re duly made by the assessing officer and duly explained by the assessee. 3. That on facts and circumstances of the case, the Order u/s 263 of the Act dated 11.03.2022 setting aside the original Assessment Order dated 19.12.2019 and directing fresh assessment to examine issue on which the then Ld. AO has already applied it mind during the original assessment proceedings makes the present revision a mere change opinion, not being permissible under the Income Tax Act, 1961. 3. Brief facts are, the assessee filed its return of income for the year under consideration on 15/10/2017, declaring loss of ₹ ( ) 11,50,98,180. The Assessing Officer issued notice and called for various details from the assessee. The assessee filed submissions befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the proposed disallowance of ₹ 13,45,752. 4. Subsequently, the learned PCIT, by exercising power under section 263 of the Act issued show cause notice and called for explanation from the assessee why the order passed by the Assessing Officer dated 19/12/2019, should not be set aside. In response, the assessee submitted that the Assessing Officer has examined the details and, therefore, invoking power under section 263 by the learned PCIT is invalid and the same should be quashed. 5. On the other hand, the learned Departmental Representative submitted that the main issues involved in this appeal are (i) loans and advances; and (ii) sale of shares and profit on sale of share of SMS Infrastructure Ltd. and (iii) receipt of interest an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt of interest; the quantum of shares have been sold by the assessee and what is the ratio of profit he received whether long term capital gain / short term capital gain. All such details have were required to be examined by the Assessing Officer and he has examined nothing. For the reasons stated above, we are of the opinion that it is a fit case for invoking the provisions of section 263 of the Act. We find that the order passed by the Assessing Officer is erroneous inasmuch as it is prejudicial to the interests of Revenue and thus we find no infirmity in the order passed by the learned PCIT hence decline to interfere and uphold the same. For the sake of convenience, the order passed by the learned PCIT is reproduced below: 7. I hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 263 of the Act. Similarly, the AO has failed to verify the taxability of multiple transaction relating to authenticity and investment sale of share which further makes the order of the AO amenable to Section 263. 8. In this case, the assessment order has been passed without making inquiries or verification which should have been made by the AO. Accordingly, the order passed by the Assessing Officer is erroneous and prejudicial to the interest of revenue in view of Explanation 2 to Section 263 of the I.T. Act. The above Explanation 2 to Section 263 of the Income Tax Act find favour in the various court decisions, which are enumerated below:- 8.1 The Hon'ble Apex Court in The Malabar Industrial Co. Ltd. Vs. CIT (243 ITR 83) had on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal jurisdiction. It was for non inquiry, the validity of action under Section 263 was held justified in a case of non verification of share capital contribution when there was evidence to suggest that the transaction could not be genuine. 8.4 The Hon'bleITAT Ahmedabad Bench in the case of M/s. Sonalank Investment Trading Pvt. Ltd. Vs. CIT, (ITA No. 1343/AM/2011) had relied on following observations: An assessment order can be erroneous either in law or in fact. An assessment order can be an erroneous one when prima facie a claim is allowed which according to the learned CIT was against the provisions of law. An assessment order can be held as prejudicial to the interest of the revenue if in the opinion of the learned CIT the inquiry w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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