TMI Blog2016 (5) TMI 1290X X X X Extracts X X X X X X X X Extracts X X X X ..... laid down under the provisions of sec. 263 of the Act. The same is quashed and in result assessment order passed under sec. 153A read with section 145(3) of the Income-tax Act, 1961 on 28.3.2013 is restored. The grounds involving the issues regarding the validity of the order passed under sec. 263 of the Act are accordingly allowed. - Decided in favour of assessee - ITA No. 3316/Del/2015 - - - Dated:- 17-5-2016 - SHRI I.C. SUDHIR AND SHRI L.P. SAHU Assessee by: S/Shri Ved Jain P. Srivastava, CA Department by: Ms. Archena S. Awasthi, CIT(DR) ORDER PER I.C. SUDHIR: JUDICIAL MEMBER The assessee has questioned validity of revisional order passed under section 263 of the Income-tax Act, 1961 on several grounds. 2. We have heard and considered the arguments advanced by the parties in view of orders of the authorities below, material available on record and the decisions relied upon. 3. The facts in brief are that search and seizure operations under section 132 of the Income-tax Act, 1961 was conducted at the premises in Paschim Vihar, New Delhi as well as in the business premises of the assessee along with Mera Baba Group of cases (main Jagat Grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating material was found during the course of search. He referred page Nos. 1 to 13 of the paper book which are copies of acknowledgement of return of income along with computation of income; audited balance sheet and profit and loss account along with auditor s report; notice dated 04.11.2012 issued under sec. 153A of the Act; notice under section 143(2) of the Act dated 23.4.2012 and notice under sec. 142(1) dated 17.12.2012. The Learned AR drew our attention to the question Nos. 11 and 12 of the notice dated 17.12.2012 issued by the Assessing Officer to the assessee asking for the details of unsecured loans taken or accepted during the year (including squared up accounts) in the prescribed format along with supporting documentary evidence regarding identity and creditworthiness of the lenders and genuineness of transaction (Question No.11) and to furnish the details of share capital/share application money/share premium received during the year in the prescribed format along with supporting documentary evidence regarding identity and creditworthiness of share application and genuineness of transaction (Question No. 12). The Learned AR also referred page Nos. 14 15 of the paper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 329 (Del.); iii) CIT vs. New Delhi Television Ltd. [2014] 360 ITR 44 (Del.); iv) CIT vs. Leisure Wear Exports Ltd. [2012] 341 ITR 166 (Del.); v ) CIT vs. Hindustan Marketing Adv. CO. Ltd. [2012] 341 ITR 180 (Del.); vi) CIT vs. Vikas Polymers [2012] 341 ITR 537 (Del.); vii) CIT vs. Vodafone Essar South Ltd. [2012] 83 CCH 068 (Del.); viii) Globus Infocom Ltd. vs. CIT Delhi-IV ITA No. 447/2013 dated 13.08.2014. ix) CIT vs. M/s. Ankit Garments Manufacturing Co. (2014) ( 12 ) TMI- 186 (Delhi H.C). 5. The Learned CIT(DR) on the other hand tried to justify the order impugned with this submissions that the Learned Principal Commissioner has specifically come to the conclusion that the Assessing Officer had not conducted inquiry on the above issue. It is also apparent that the Assessing Officer while proposing initiation of proceedings under sec. 263 of the Act has himself admitted that he had not conducted any inquiry on the issues. She submitted that the details filed by the assessee in response to the query raised by the Assessing Officer were not examined by him. She submitted that framing of assessment in the case of M/s. Hillridge Investment Ltd. does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in some cases possibly though rarely, the CIT can also show and establish that the facts on record or inferences drawn from facts on record per se justified and mandated further inquiry or investigation but the Assessing Officer had erroneously not undertaken the same. However, the said finding must be cleared, unambiguous and not debatable. The matter cannot be remitted for a fresh decision to the Assessing Officer to conduct further inquiry without a finding that a order is erroneous. Finding that the order is erroneous is a condition or requirement which must be satisfied for exercise of jurisdiction under sec. 263 of the Act. In such matters, to remand the matter/issue to the Assessing Officer would imply and mean the CIT has not examine and decided whether or not the order is erroneous but has directed the Assessing Officer to decide the aspect/question. The Hon'ble High Court was pleased to hold further that in most cases alleged inadequate investigation , it will be difficult to hold that the order of the Assessing Officer, who had conducted inquiries and had acted as an investigator, is erroneous, without CIT conducting verification/inquiry. 7. The Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riting. All these were part of the record of the case. The claim was allowed by the Income-tax Officer on being satisfied with the explanation of the assessee. The Hon'ble High Court was pleased to hold that such decision of the ITO cannot be held to be erroneous simply because in his order, he did not make an elaborate discussion in that regard. The Commissioner even after initiating proceedings for revision and hearing the assessee, could not say that the allowance of the claim of the assessee was erroneous and that the expenditure was not Revenue expenditure but an expenditure of capital nature. He simply asked the Income-tax Officer to reexamine the matter. The Hon'ble High Court was of the opinion that it is not permissible. It was held that further inquiry and/or fresh determination can be directed by the Commissioner only after coming to the conclusion that the earlier finding of the ITO was erroneous and prejudicial to the interest of the Revenue. Without doing so, he does not get the power to set aside the assessment. The ratio laid down in that decision of the Hon'ble High Court also supports the case of the assessee. It is an undisputed fact 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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