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TMI Blog2024 (8) TMI 1509X X X X Extracts X X X X X X X X Extracts X X X X ..... has supplied affidavit, gift deed, bank statement of both donor and donee, ledger statement of Muthooth Finance etc. The assessee had also given a reply dated 12.04.2021 to the specific show cause notice issued by the AO The said amount is reflected in assessee s account with Indusind Bank . Bond ledger statement from Muthooth Finance Ltd. with their cheque dated 20.03.2017 also given. The account payee cheque has been signed by the authorized signatory for Muthooth Finance Ltd. These facts clearly established that the grandmother of the assessee has given Rs. 30,00,000/- through banking channel which has been duly reflected in the bank statement of the assessee. Therefore, the explanation of the assessee was found acceptable by AO and he made no addition. He has taken a possible view which cannot be considered as perverse. Even the Ld. PCIT has not given any reason as to why the explanation of assessee is not acceptable. The facts of the present case are similar to the case of Nirav Modi [ 2016 (6) TMI 1004 - BOMBAY HIGH COURT] and we find no reasons to deviate from the finding of Hon ble Bombay High Court. Order of the Ld. PCIT is not sustainable - Decided in favour of assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received, a confirmation letter from the donor, details such as her PAN, sources of income, ITR copy, bank statements or any other details to prove her creditworthiness and also to substantiate the claim of exemption for this amount from income tax. However, the AO has not made any addition in this regard. Thereafter, the Ld. PCIT issued show cause notice u/s 263 on 07.02.2024 wherein it was observed that amount of Rs. 30,00,000/- received was credited to the capital account of his proprietorship firm named as M/s Shree Sai Petroleum during the financial year 2017-18. 3.1 In response to the query in this regard, the assessee has stated that the donor Smt. Chandaben G. Parmar is his grandmother who is very old. The above-mentioned gift amount was credited through bank cheques only. The assessee had also filed an affidavit of Smt. Chandaben G. Parmar where it was stated that her husband had left cash which she deposited in her bank account and the gift was given out of the said money. However, on verification of the bank statement of Smt. Chandaben G. Parmar, it was noticed that no cash was deposited in her account since 2011. Further, the same account had a credit of Rs. 29,69,585/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. Therefore, creditworthiness and genuineness of the transaction could not be established by the assessee. The Ld. PCIT further observed that AO failed to examine the credits in the bank account and source of investment of such amount by Smt. Chandaben G. Parmar in 2011. Thereafter, the Ld. PCIT extracted section 263 of the Act and referred to the decision of Hon ble Supreme Court in case of Malabar Industries Ltd. vs. CIT, 243 ITR 83 (SC) where it was held that twin conditions viz., (i) the order of the AO must be erroneous and (ii) it should be prejudicial to the interest of revenue should be satisfied cumulatively to revise the order of AO u/s 263 of the Act. The Hon ble Supreme Court held that the order can be said to be erroneous if (i) AO passed the order on incorrect assumption of facts or incorrect application of law or (ii) AO s order is in violation of principles of natural justice or (iii) order is passed without application of mind or (iv) the AO has not investigated the issue before him. In the present case, assessee was recipient of gift of Rs. 30,00,000/- from Smt. Chandaben G. Parmar, grandmother, but AO accepted the explanation of the assessee as genuine wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee is at pages 24 to 26 of the paper book. The assessee had also filed deed of gift which is at page 27 to 29 of the paper book. The assessee also filed affidavit of Smt. Chandaben G. Parmar which is at page 31 and 32 of the paper book. The assessee has stated that his is not a case of 'no inquiry' or 'lack of inquiry.' The Ld.AR of the assessee submitted that Ld. PCIT as well as Ld. CIT-DR, have emphasized that it is a case of assessment without proper inquiries/verification. But, the Ld.AR stated that AO has, in fact, applied his mind to the issue of gift and the order u/s 263 is not valid. Ld. AR of the assessee further submitted that Ld. PCIT has not made any inquiry during the proceedings u/s 263. He submitted that the Ld. PCIT, before holding an order to be erroneous, should have conducted necessary enquiries or verification in order to show that the finding given by the AO is erroneous. The AO considered the detailed reply of assessee vide letter dated 12.04.2021 and being satisfied, did not make any addition on account of the impugned gift of Rs. 30,00,000/-. Hence, the order of the AO is neither erroneous nor prejudicial to the interest of reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord of any proceeding under this Act, and if he considers that any order passed therein by the [Assessing] Officer [or the Transfer Pricing Officer, as the case may be,] is erroneous in so far as it is prejudicial to the interest of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, [including,- (i) An order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment; or (ii) An order modifying the order under section 92CA; or (iii) An order cancelling the order under section 92CA and directing a fresh order under the said section]. 8. The Hon ble Apex Court in case of CIT vs. Greenworld Corporation, 314 ITR 81 (SC) held that the jurisdiction u/s 263 can be exercised only when both the following conditions are satisfied i.e., (i) the order of the Assessing Officer should be erroneous and (ii) it should be prejudicial to the interests of revenue. These conditions are conjunctive. An order of assessment passed by the Assessing Officer should not be interfered with only because an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee on the subject-issue. Therefore, the decision of Ld. PCIT that the order passed by AO was erroneous and prejudicial to the interest of revenue is not correct. Reliance for this view is based on the decision of Hon ble Delhi High Court in case of CIT vs. Sunbean Auto Ltd. [20110] 189 Taxman 436 (Del) and Nirav Modi (supra). 10. The Ld.AR has relied on the decision of Hon ble Bombay High Court in the case of Nirav Modi (supra). In the said decision, the Hon ble Court observed that it is settled position in law that powers u/s 263 of the Act can be exercised by the CIT on satisfaction of twin conditions viz. the assessment order should be erroneous and prejudicial to the revenue. By erroneous is meant contrary to law. Thus, this power cannot be exercised unless the CIT is able to establish that the order of the AO is erroneous and prejudicial to the revenue. Thus where there are two possible views and the AO has taken one of the possible views, no occasion to exercise powers of revision, can arise. Nor can revisional power be exercised for directing a fuller inquiry to find out if the view taken is erroneous, when a view has already been taken after inquiry. This power of revis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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