9911796707
TMI Blog2024 (8) TMI 1509X X X X Extracts X X X X X X X X Extracts X X X X ..... 21 is not erroneous as well as prejudicial to the interest of the Revenue within the meaning of Section 263 of the Act." 3. The facts of the case in brief are that assessee filed his return of income for the AY. 2018-19 on 16.01.2019, declaring total income of Rs. 1,61,48,000/-. The assessee's case was selected for complete scrutiny on the issue of "share capital/other capital." The AO had issued notices u/s 143(2) on 22.09.2019 and u/s 142(1) dated 08.03.2021. In compliance to the said notices, assessee filed relevant details / documents through e-portal. After examining the submission of the assessee, the assessment order was passed by the AO u/s 143(3) r.w.s. 143(3A) & 143(3B) of the Act on 15.01.2021, determining total income of Rs. 2,15,02,840/- after making addition of Rs. 1,24,039/- on account of disallowance of expenditure u/s 14A and Rs. 52,30,000/- on account of unexplained credit (capital account). Subsequently, the Ld. PCIT called for the record and examined the same. On verification of the assessment records, the Ld. PCIT found that the AO issued a notice u/s 142(1) dated 08.03.2021 calling for the details about the gift of Rs. 30,00,000/- received by the assessee fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice u/s 142(1) dated 08.03.2021 was issued by AO with a specific query with regard to gift of Rs. 30,00,000/- from Smt. Chandaben G.Parmar. The AO had also issued final show cause notice dated 07.04.2021 wherein at para (v), the gift Rs. 30,00,000/- was sought to be taxed as unexplained gift. The assessee submitted reply dated 12.04.2021 which included copy of gift deed, copy Aadhar, copy of bank statement, copy of sogondnama in Gujarathi and copy of death certificate. After considering these details, AO has finalized the assessment order u/s 143(3) of the Act. Therefore, AO had duly considered and applied his mind in the matter of gift from grandmother. Regarding deposit of cheques of Rs. 29,69,585/- on 20.05.2017 in the donor's account it was stated that the said amount was the maturity sum received from Muthoot Finance Ltd. Bond. In view of the above, the assessee submitted that the order was neither erroneous nor prejudicial to the interest of revenue. 3.2 The Ld. PCIT was, however not satisfied with the reply of the assessee. He observed that there was no cash deposited in her bank account since 2011. Further, the bank account has a credit of Rs. 29,69,585/- on 22.05.2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank account of assessee and his grandmother, verify the trail of gift as to how the maturity of Muthooth Bond is the source of gift in the bank account of Smt. Chandaben G. Parmar and finally to verify the genuineness and creditworthiness of the alleged gift with proper supporting evidences. With this direction, the Ld. PCIT set aside the order passed u/s 143(3) dated 15.04.2021. Aggrieved by the order of Ld. PCIT, the assessee has filed present appeal before the Tribunal. 4. The Ld. AR of the assessee strongly objected the order of Ld. PCIT and submitted paper book containing pages 1 to 33. During the argument, he has relied on the decisions of the Hon'ble Supreme Court in case of Malabar Industries Ltd. (supra) and the decision of Bombay High Court in the case of CIT vs. Nirav Modi, 241 Taxman 255 (Bom). He submitted that assessment order is neither erroneous nor prejudicial to the interests of revenue because the AO has taken a possible view with respect to the alleged gift of Rs. 30,00,000/- which the Ld. PCIT seeks to tax u/s 68 of the Act. The Ld. AR of the assessee submitted that the AO has made inquiries during assessment proceedings by issue of notice u/s 143(2) dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide notices u/s 142(1) of the Act and final show cause notice dated 07.04.2021. The assessee filed reply to the show cause notice vide letter dated 12.04.2021 along with supporting evidences. Being satisfied with the reply, the AO decided not to make addition of the impugned gift though he had made two other additions in the assessment order. Hence, AO has applied his mind and taken a considered decision. 6. We have heard rival submissions and perused materials on record. We have also deliberated upon the decisions relied upon by both parties. We have also gone through the provisions of Section 263 of the Act. We find that impugned order was passed by the AO u/s 143(3) r.w.s. 143(3A) and 143(3B) of the Act. 7. Let us now discuss the scope and ambit of Section 263 of the Act. A bare reading of the section reveals that the Ld. PCIT can call for and examine the record of any proceedings under the Act and if he considers that any order passed by the AO is erroneous in so far as it is prejudicial to the interests of the revenue, he may after giving opportunity of hearing and after making or causing to be made such inquiry as he deems necessary, pass such order as the circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made additions of Rs. 52,30,000/- and Rs. 1,24,039/- on account of unexplained credit (capital account) and disallowance u/s 14A respectively. Thus, the AO has duly considered the issue, applied his mind and taken a considered view. 9. In the instant case, the Assessing Officer had called for the explanation on item in question (gift) from the assessee and assessee had furnished his explanation, which clearly shows that the AO had undertaken the exercise of examining as to whether the gift from Smt. Chandaben G. Parmar is duly explained. It is clear that the AO was satisfied with the assessee's explanation and therefore he accepted same. The grievance of the Ld. PCIT is that the AO should have made further inquiry in respect of the impugned gift in the light of provisions of section 68 of the Act, rather than accepting the assessee's explanation. Therefore, it could not be said that it was the case of "lack of inquiry". There is a distinction between "lack of inquiry" and "inadequate inquiry". If there was any inquiry, even inadequate, that could not, by itself, give occasion to the Ld. PCIT to pass order u/s 263 of the Act merely because he has different opinion in the matter. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is at pages 24 to 26 of the paper book. The question regarding unexplained gift of Rs. 30,00,000/- is at para 2(iv) of the show cause notice and the reply is at para (iv) vide paper book page 25. We also find that the grandmother of the assessee had given Rs. 25,00,000/- and Rs. 5,00,000/- which is reflected in the bank statement maintained with Indusind Bank (page 15 of the paper book). The said amount is reflected in assessee's account with Indusind Bank at page 11 and 13 of the paper book. Bond ledger statement from Muthooth Finance Ltd. with their cheque dated 20.03.2017 is at page 16 and 17 of the paper book. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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