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TMI Blog2024 (9) TMI 1190X X X X Extracts X X X X X X X X Extracts X X X X ..... cts, we observe that the principal CIT has not given any independent finding as to how the assessment order is erroneous and hence unsustainable in law. In our considered view, it is a well-settled principle that in order to hold that the assessment order is erroneous insofar as prejudicial to the interests of the revenue, the principal CIT has to give an independent finding as to how on the basis of information available on record, the assessing officer has taken a legally unsustainable view, which is liable to be set aside. However, in the instant facts, no such finding has been given by the principal CIT. We observe that the assessee had given a specific submission to the effect that during the impugned year under consideration, the assessee had not earned any exempt Long term capital gains, but in fact had earned short term capital gains on which due taxes had also been paid, and therefore, there is no basis of assuming that during the impugned year under consideration the assessee had earn any long term capital gains on which no tax had been paid. Appeal of the assessee is allowed. - Smt. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leged to be involved in providing accommodation entries; whereas in the case of the Appellant, the Appellant had dealt in listed equity share of Dhvanil Chemicals Ltd and offered whatever short term capital gain he had earned during the year under consideration in his return of income, and thus, there was neither any income escaping assessment nor the order passed by the learned Assessing Officer has caused prejudice to the interest of the revenue. It is submitted that in the facts and circumstances of the case, it be so held that the order passed by the learned Assessing Officer was neither erroneous nor prejudicial to the interest of the Department, and hence, the order passed by the learned PCIT u/s. 263 be quashed. Your Appellant reserves the right to add, alter, amend and / or withdraw any of the above Grounds of Appeal. 3. The brief facts of the case are that return of income for the Assessment Year (AY) 2013-14 was filed on 31st July 2013, declaring a total income of Rs. 2,07,760/-. Assessment order under Section 147 read with Section 144B of the Income-tax Act, 1961, was passed on 28th March 2022, assessing the income at Rs. 2,07,760/-, as declared in the return of income f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the issues, leading to an error in the assessment order that resulted in a loss of Revenue. Consequently, the order passed by the A.O. was deemed erroneous and prejudicial to the interests of the revenue and Principal CIT directed a fresh assessment on the assessee in light of these facts. 4. The assessee is in appeal before us against the aforesaid order passed by principal CIT. The contention of the counsel for the assessee before us are three-fold: firstly, the assessing officer, during the course of assessment proceedings had duly enquired into this aspect and therefore, there is no lack of enquiry on part of the assessing officer, during the course of assessment proceedings. This is also evident from the fact that the case of the assessee was reopened under section 147 of the Act, only on the basis of information that the assessee had obtained accommodation entries from the entry operator Jignesh Shah and group. Therefore, it is evident that since the very basis of reopening the case of the assessee under section 147 of the Act was examination of accommodation entries obtained by the assessee from Jignesh Shah and group, this issue was examined during the course of reass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de the following observations while passing the order on this aspect: 47. As we have seen above, one of the allegations that the learned Commissioner has made is against the Assessing Officer's not using the material available with him to take the matter to the logical conclusion, and it is also observed by the learned Commissioner that this note itself makes the order of Assessing Officer on this issue erroneous and prejudicial to the interests of the assessee. What is being done now is to send the matter back to the Assessing Officer for examination de novo so as to inquire into the allegations so made by Cyrus Mistry. What this approach overlooks is that it is only elementary that what can not be done directly cannot be done indirectly either. If receipt of some inputs at the last minute from a third party cannot result in an extension of time for completion of assessment under section 143(3) directly, it cannot be done by way of invoking Section 263 either. 7. Secondly, in the instant facts, we observe that the principal CIT has not given any independent finding as to how the assessment order is erroneous and hence unsustainable in law. In our considered view, it is a well- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee confirming the order of the Tribunal observing as follows:- 19. In the present case, the findings recorded by the Tribunal are correct as the CIT has not gone into and has not given any reason for observing that the order passed by the Assessing Officer was erroneous. The finding recorded by the CIT is that order passed by the Assessing Officer may be erroneous . The CIT had doubts about the valuation and sale consideration received but the CIT should have examined the said aspect himself and given a finding that the order passed by the Assessing Officer was erroneous. He came to the conclusion and finding that the Assessing Officer had examined the said aspect and accepted the respondent's computation figures but he had reservations. The CIT in the order has recorded that the consideration receivable was examined by the Assessing Officer but was not properly examined and therefore the assessment order is erroneous . The said finding will be correct, if the CIT had examined and verified the said transaction himself and given a finding on merits . As held above, a distinction must be drawn in the cases where the Assessing Officer does not conduct an enquiry; as lack ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y also inform that during the year under consideration I had purchased and sold shares through one SEBI registered broker, M/s. B.P. Equities Pvt. Ltd. of Mumbai, whose copy of account from my books as well as the contra account given by the said broker from his books are attached herewith at Annexure-C-coll. (Pages 6 to 8) to show that whatever transaction I had undertaken with them were through bank accounts and were in respect of shares and securities on which I earned short term capital gain, which has been offered for taxation. Under the circumstances, even the factual basis mentioned by you in your reasons that I had claimed bogus long term capital gain or contrived loss is absolutely against facts of records and has no legs to stand. 9. Accordingly, from the facts placed on record, it is evident that during the course of 147 proceedings, the assessing officer had duly enquired into this aspect regarding the claim of accommodation entry. Further, from the facts placed on record before us, the principal CIT has not given any specific finding as to how the assessment order was erroneous and it is evident that the principal CIT had taken recourse to 263 proceedings only with a v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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