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2020 (1) TMI 129 - ITAT MUMBAIRevision u/s 263 - addition u/s 68 - Unverified unsecured loans taken - HELD THAT:- An Explanation-2 has been inserted by Finance Act 2015 in Section 263 with effect from 01/06/2015 to declare that order shall be deemed to be erroneous in so far as it is prejudicial to the interest of the revenue, if in the opinion of appropriate authority-(1) the order was passed without making inquiries or verifications which should have been made; (ii) the order is passed allowing any relief without inquiring into the claim; (iii) the order is not in accordance with any direction or instructions etc. issued by the Board u/s 119; or (iv) the order was not in accordance with binding judicial precedent. Applying the stated principles to the factual matrix and after going through the replies submitted by the assessee during the course of regular assessment proceedings, we concur with the submissions of Ld. CIT-DR that it was a case of lack of inquiry and there was no application of mind by Ld. AO on the issues which formed subject matter of revisional jurisdiction u/s 263. Therefore, we do not find any illegality in the action of Ld. Pr.CIT in exercising the said jurisdiction. Final directions of Ld. Pr.CIT to be erroneous to some extent. It is noted that there was blanket set-aside of the quantum assessment order overlooking the fact that the addition of ₹ 7.50 Lacs as made by Ld.AO in the quantum assessment order had already attained finality and there would be no occasion to revisit the same in revisional jurisdiction since the quantum assessment order could not be said to be prejudicial to the interest of the revenue, to that extent. AO is directed not to delve into the verification of loan of ₹ 7.50 Lacs stated to be obtained from M/s Reiva Sarees. Proceeding further, we are of the considered opinion that it was incumbent on the part of Ld. Pr.CIT to appreciate the assessee’s submissions in the correct perspective. Pr. CIT, in the show-cause notice, has observed that unsecured loans obtained from certain entities remained to be verified. However, the loan obtained from Anuj Gems (wrongly referred to as Anju Gems) was only a brought forward loan which was repaid by the assessee during the year. Therefore, there could be no occasion to consider the same from the point of view of addition u/s 68. Therefore, Ld.AO directed to restrict the verification with respect to remaining two entities viz. Dharam Oberoi & Diyas Productions Private Limited. We direct so. Provisions of Sec.2(22)(e) would not be applicable against loans obtained from M/s Suchitra Homes Entertainment (I) Pvt. Ltd. since the confirmation on record would show that the said loans were merely brought forward loans and there were no fresh receipts of loans during the year. Therefore, the order could not be termed as erroneous or prejudicial to revenue to that extent. Accordingly, this issue would not form part of revisional assessment proceedings. So far as excess of grant of TDS is concerned, it would suffice to direct Ld. AO to grant due TDS credit as per law in revisional assessment proceedings since as per assessee’s submissions, the assessee, in fact, has been granted short TDS credit. Applicability of Sec.43B on professional tax is factual one. The Ld. AO is directed to verify the same during revisional assessment proceedings.The directions issued by Ld. Pr.CIT stand modified to that extent.
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