9911796707
TMI Blog2003 (10) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... y because he feels that a particular line of investigation which could have been effective and useful for the Revenue had not been adopted by the AO. We observe that the above cases of Delhi Bench of Tribunal also squarely apply to the case before us as the AO before completing assessment called for details of share transactions and had discussed with the representative of the assessee. The only fact is that the AO has not specifically stated the discussion he had with the assessee. This fact does not empower the learned CIT to invoke jurisdiction of s. 263 of the Act. Thus, the order of the learned CIT in the circumstances, is not justifiable and has to be cancelled. Thus, we are of the considered view that the order passed by the learned CIT in setting aside the assessment with the direction to the AO to complete the assessment de novo after making the relevant enquiries and investigation by calling for contract notes, challans, etc., from the books of brokers and making enquiries from stock exchanges is not sustainable and the same is liable to be quashed. Therefore, in our considered opinion, condition precedent for assuming jurisdiction u/s 263 did not exist in the case before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has stated that the genuineness or otherwise of share transaction could have been easily probed by calling for contract notes from the broker, the challan regarding delivery of shares, obtaining details of date and mode of payments, examining the books of brokers and making enquiries from the stock exchange if necessary. But no such details were called or enquiries were made and huge loss accepted. Learned CIT has stated that the assessments have been completed without conducting any worthwhile enquiry and, therefore, the said assessment is erroneous in so far as it is prejudicial to the interest of Revenue. 4. The assessee filed the reply of the said notice by letter dt. 12th March, 2002, a copy of which is placed at pp. 5 to 7 of the paper book. In the said reply, the assessee stated that the AO while making the assessment duly called for, examined, verified and scrutinised all relevant materials, details, particulars, books and documents in respect of, inter alia, the transactions relating to purchase and sale of shares of various quoted companies. The assessee further stated that it duly filed the relevant details and also produced the purchase and sale bills. All the transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal by the assessee before the Tribunal. 6. During the course of hearing of the appeal, the learned authorised representative of the assessee vehemently submitted that the AO made detailed examination of the books and documents, inter alia, in respect of the transaction relating to purchase and sale of shares and referred p. 29 of the paper book which is a copy of the AO's requisition under s. 142(1) of the Act dt. 31st May, 1999, and referred item Nos. 11 and 12 thereof that the AO called for the details of business receipts/sales, details of purchases and called for books of accounts, bills/vouchers, bank statement along with bank reconciliation, etc. The learned authorised representative of the assessee referred pp. 22 and 23 of the paper book and submitted that the assessee furnished the details of purchase and sale of shares. The learned authorised representative of the assessee further referred to p. 16 of the paper book and submitted that the assessee also furnished by its letter dt. 24th Feb., 2000, copies of bills in addition to details of purchase and sale of shares earlier submitted by the assessee. The learned authorised representative of the assessee submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned authorised representative of the assessee further relied on the decisions of the Tribunal, Delhi Benches in the case of Triveni Engineering Works Ltd. vs. Dy. CIT (2003) 131 Taxman 32 (Del)(Mag) and the case of Sunil Lamba vs. Dy. CIT (2003) 131 Taxman 35 (Del)(Mag) and submitted that it has been held that CIT could not invoke s. 263 for upsetting a concluding assessment framed by the AO merely because he feels that a particular line of investigation which would have been effective and useful for Revenue had not been adopted by the AO. The learned authorised representative of the assessee further submitted that the CIT cannot dispute the finality of the assessment merely on presumptions and assumptions or for the reasons that the assessment order is small and does not explain the reasons for allowing the expenses claimed by the assessee. He submitted that mere lack of discussion of the issue by the AO in the assessment order would not render the order to be erroneous as the learned CIT before exercising his jurisdiction under s. 263 of the Act has to establish that the order of the AO sought to be revised is erroneous and prejudicial to the interest of the Revenue. The lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f their submissions. 9. We do agree with the learned Departmental Representative that the assessment order passed by the AO under s. 143(3) of the Act is a brief assessment order and the AO has not discussed in the said order the details of the discussions and details of examinations made by him, inter alia, in respect of the share transactions in respect of which the assessee incurred the loss of Rs. 47.88 lakhs. In order to ascertain as to whether the AO had stated the crux of the discussion in the order sheet, we requested the learned Departmental Representative to furnish a copy of the order sheet but till date the learned Departmental Representative has not furnished the copy of the order sheet in spite of the fact that it was specifically stated at the time of hearing of the appeal that if the copy of the order sheet was not furnished on or before 23rd Sept., 2003, it would be presumed that the AO had made necessary enquiries and were stated in the order sheet. Be that as it may, we observe that the AO before completing the assessment vide letter dt. 31st May, 1999, and letter dt. 11th Feb., 2000, the copies of which are placed at pp. 29 and 21 respectively of the paper book, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O, who passed the order, unless the decision is held to be erroneous. Cases may be visualised where the ITO while making an assessment examines the accounts, makes enquiries, applies his mind to the fact and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The CIT, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the CIT he would have estimated the income at a higher figure than the one determined by the ITO. But that would not vest the CIT with power to re-examine the accounts and determine the income himself at a higher figure. It is because the ITO has exercised the quasi-judicial power vested in him in accordance with law and arrived at a conclusion and such a conclusion cannot be termed to be erroneous simply because the CIT does not feel satisfied with the conclusion. It may be said in such a case that in the opinion of the CIT the order in question is prejudicial to the interest of the Revenue. But that by itself will not be enough to vest the CIT with the power of suo motu revision because the first requirement, namely, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubstance in the submission of the learned authorised representative of the assessee that even if the brokers do not respond to the summons issued by the AO, the transactions still will have to be treated as genuine as held by the Calcutta High Court in the case of Korley Trading Co. Ltd. and in the case of Carbo Industrial Holdings Ltd. 11. During the course of hearing of the appeal, the learned Departmental Representative placed reliance on the decision of the Madhya Pradesh High Court in the case of Kohinoor Tobacco Products (P) Ltd. We observe that the AO in the said case completed the assessment without making any enquiry at all to ascertain as to whether the income received from letting out of the properties was assessable as income from business or as income from house property. The AO completed the assessment merely by accepting the assessee's claim that such income was assessable as income from business and thereby allowed excessive deduction towards repairs and also depreciation. However, the facts of the said case do not apply to the case before us. We have already observed that the AO before completing the assessment asked for details and discussed the case with the auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffective and useful for the Revenue had not been adopted by the AO. We observe that the above cases of Delhi Bench of Tribunal also squarely apply to the case before us as the AO before completing assessment called for details of share transactions and had discussed with the representative of the assessee. The only fact is that the AO has not specifically stated the discussion he had with the assessee. This fact does not empower the learned CIT to invoke jurisdiction of s. 263 of the Act. Thus, the order of the learned CIT in the circumstances, is not justifiable and has to be cancelled. 13. In view of the above, we are of the considered view that the order passed by the learned CIT in setting aside the assessment with the direction to the AO to complete the assessment de novo after making the relevant enquiries and investigation by calling for contract notes, challans, etc., from the books of brokers and making enquiries from stock exchanges is not sustainable and the same is liable to be quashed. Therefore, in our considered opinion, condition precedent for assuming jurisdiction under s. 263 did not exist in the case before us. Accordingly, we quash the impugned order of CIT pass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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