TMI Blog2020 (12) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... or there is anything to perceive that Assessing Officer has not examined the information which was the basis for reason to believe for reopening the case. Here in this case, it cannot be held that the AO has not applied his mind on the information received or has not carried out any enquiry or verification. Nowhere, the Ld. Pr. CIT has held as to how the order of the AO is erroneous and prejudicial to the interest of the Revenue. The Ld. Pr. CIT has to establish from the records and has to give reasons as to why the order of the AO is erroneous and prejudicial to the interest of the Revenue to cancel or set-aside the assessment order. We find that nowhere the Ld. Pr. CIT has pointed out any error as to how the order of the AO is erroneous and since one of the condition is lacking, therefore, neither in law nor on facts, he can set aside or cancel the assessment order and direct to pass fresh assessment order. In view of our aforesaid reasoning, the impugned order u/s 263 passed by the Ld. Pr. CIT is quashed. - Decided in favour of assessee. - ITA No.4819/Del/2019 - - - Dated:- 11-12-2020 - Shri G.S. Pannu, Vice President And Shri Amit Shukla, Judicial Member For the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries and clients seeking accommodation entries. The digital data impounded during the course of survey proceedings at the secret office premises of Shri Pradeep Kumar Jindal at 116, R.K.Compiex, Mahendru Enclave, G.T Kama! Road, Delhi on 01.02.2016 was analyzed. From the analysis of the digital data, accommodation entries and their respective beneficiaries were identified as under:- Name of the beneficiary Address of the beneficiary PAN Name of the Accommodation entry From company of Pradeep Kumar Jindal Date Amount Guru Kripa Shuttering Pvt. Ltd. 938, Sec- 15, Part-II Gurgaon-122001 AACCG9340C Share premium/application Euphoria Capital Private Limited 01.04.2008 10.00,000 Guru Kripa Shuttering Pvt. ltd. 938, Sec- 15. Part-ll, Gurgaon-122001. AACCG934QC Share premium/application Euphoria Capital Private Limited 10.06,2008 10,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal during the year and there was no credit in the books of account. 5. The Ld. Assessing Officer after examining the record and the financial statements given in the audited balance sheet and the bank statement, noted that there is only one entry of ₹ 10 Lakhs on 24.01.2009 which was from M/s Gannon Dunkerly and Company Ltd. and no money has come from M/s Euphoria Capital Private Limited. The relevant finding in the assessment order dated 29.09.2016 reads as under:- 4. On perusal of the bank account of the assessee company, only one entry of ₹ 10,00,000/- was found credited in the bank account, which was received from one M/s Gannon Dunkerly co. Ltd. on 24.01.2009. No further entry of ₹ 10 Lakhs was found. Accordingly, the Return of Income of the assessee is accepted. 6. Thereafter, the Pr. CIT in his revisionary jurisdiction u/s 263 of the Act has firstly, noted exactly the same reasons recorded which was recorded by the Assessing Officer for reopening the case u/s 147 and observed that the Assessing Officer had neither called for the information from the Investigation Wing, so as to verify the premium of ₹ 20 Lakhs from M/s Euphoria C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of the subscribers. He also did not furnish any documents in support of the fair market value adopted by the company and received huge premium during the course of assessment proceedings the A.O. has also not examined the above issues and accepted the same as declared by the assessee. In view of the above facts and circumstances of the case, I am of the confirmed view that the A.O. by not pursued the inquries to their logical end and has made the order erroneous and prejudicial to the interest of the Revenue. Hence, the same deserves to be revised u/s 263 of the I.T. Act, 1961. Therefore, the said order passed by the Assessing Officer is set aside on this particular issue only. The Assessing Officer is directed to pass fresh assessment order after making through and detailed inquiries on this particular issue only. The assessing officer should pass a speaking order after providing adequate opportunity to the assessee. 8. Before us, the Ld. Counsel for the assessee, Mr. Ajay Wadhwa after explaining the entire facts and background of the case, submitted that the very premise of Ld. PCIT to exercise his revisionary jurisdiction u/s 263 was based on the same info ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Once the very basis on which reasons were recorded were found to be factually incorrect, then the AO could not have travelled beyond the reasons to make any further addition for which no such material or information has come on record. Nor he has recorded his satisfaction or reason to believe on any other issue. Once, the Ld. Pr. CIT in his revisionary jurisdiction now cannot go beyond the reasons recorded for which the case was reopened u/s 147 and say that the AO should have enquired other things also. Once, the reopening is only on alleged escapement of ₹ 20 Lakhs, which the AO has verified and found that this amount was not received from that party, then Ld. Pr. CIT cannot travel beyond the reasons recorded. No error has been found or highlighted by the Ld. Pr. CIT in the order of the AO. 10. Alternatively, he submitted that even on other points on which the Ld. Pr. CIT has made observations, the assessee has filed all the details and evidences before the AO, which were duly examined, which is evident from the various replies and documents filed before the AO as placed in the paper book. Once, the AO has applied his mind and called for the record from the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 Lakhs from Euphoria Capital Private Limited and therefore, order of the AO is erroneous insofar as prejudicial in the interest of the Revenue. 11. Once, the very basis for reason to believe on the basis of which assessment was reopened does not exist; and the AO has duly accepted after verification that the addition cannot be made and information was incorrect, then, it was incumbent upon the Ld. Pr. CIT to point out as to what was the error in the assessment order. Once, the AO has not made any addition in respect of alleged accommodation entry from M/s Euphoria Capital Private Limited, then there is no scope of expanding the reasons recorded and travel beyond the reasons recorded on which Assessing Officer had acquired jurisdiction for reopening u/s 147 by the Ld. Pr. CIT in his revisionary jurisdiction u/s 263. Before us, the Ld. Counsel for the assessee had heavily relied upon the order of the jurisdictional High Court in the case of CIT vs Software Consultants [2012] 341 ITR 240 (Del.), wherein on almost on similar issue, the Hon ble Court observed and held as under:- One of the contentions, which has been accepted by the Tribunal is that the order of the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the reasons were recorded has not been considered by the Assessing Officer. In fact, the assessment record clearly shows that the AO has duly called for all the information and has verified the same and has arrived at the conclusion. Without finding any error in such finding of the AO or from the records, the Ld. Pr. CIT cannot hold that the order passed by the AO is erroneous in law or in facts. It is trite law that while exercising the jurisdiction u/s 263 of the Act, the Ld. Pr. CIT has to prove twin conditions are met, that is, the order passed by the AO is erroneous; and secondly, it is prejudicial to the interest of the Revenue. Both the condition should fulfill simultaneously and is cumulative and if one of the conditions is lacking, then Pr. CIT cannot cancel/set-aside the assessment order. Here the Ld. Pr. CIT had tried to presume the error in the assessment order which at the face of the record is not there; or there is anything to perceive that Assessing Officer has not examined the information which was the basis for reason to believe for reopening the case. Here in this case, it cannot be held that the AO has not applied his mind on the information recei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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