TMI Blog2021 (12) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... fall in the category of prejudicial to the interest of Revenue. In the present case the AO has taken cognizance of all the material provided by the Assessee during the Assessment Proceedings and after verifying the same has passed just and proper order. Thus, the Pr. CIT s observation that no inquiry/insufficient enquiry made by AO, is incorrect and does not sustain. Thus, merely having a different opinion upon the treatment of any receipt cannot be the reason of invocation of section 263. Thus the appeal of the assessee is allowed. - ITA No. 1168/KOL/2017 - - - Dated:- 25-11-2021 - Shri O. P. Kant, Accountant Member And Ms. Suchitra Kamble, Judicial Member For the Assessee : Shri Subhash Singhal, CA For the Department : Shri Sujeet Kumar, CIT, DR ORDER PER SUCHITRA KAMBLE, JM This appeal is filed by the assessee against the order dated 15.03.2017 passed by the Pr. CIT-1, Kolkata u/s 263 of the Income Tax Act for Assessment Year 2012-13. 2. The grounds of appeal are as under :- 1. Audit party had raised objection on two points in assessment order and the AO responded defending his decision. Using the exact language, the show cause notice under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l in nature which varies from case to case, the comment of non enquiry by AO is not factually correct, as enough evidence was collected by AO at assessment stage and he had applied his mind on both the points. 3. The assessee company is engaged in the business of renting, air processing, trading in securities and construction and development. The return of income for assessment year 2012-13 was filed on 27.9.2012 declaring total income of ₹ 78,58,058/-. The assessment u/s 143(3) was completed on 25.3.2015 at total income of ₹ 1,79,28,170/- under normal provisions of Income Tax Act 1961. The Principal Commissioner of Income Tax observed that income from other source in respect of profit and loss account under the caption profit and loss account in share trading of the assessee company was not properly verified by the Assessing Officer. Therefore, the Principal Commissioner of Income Tax issued show cause notice u/s 263 on 18.2.2017. The assessee replied the same show cause notice on 18.2.2017. The Principal Commissioner of Income Tax vide order dated 15.3.2017 directed the Assessing Officer to pass fresh assessment order after considering the observations made in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of Section 263 of the Act. 7. We have heard both the parties and perused all the relevant material available on record. As regards Ground No. 1, there is no co-relation between audit objection and the show cause notice issued u/s 263 by Principal CIT. In fact, there is no record which shows that the said audit objection was dropped later on. The notice issued u/s 263 has clearly mentioned the two issues upon which the Assessing Officer has been directed to pass fresh assessment. Hence Ground No. 1 is dismissed. As regards to merit of invocation of Section 263 by the Principal CIT, the Pr. CIT observed that the profit and loss account reveal that profit and loss in share trading was debited for ₹ 6,49,429.32 under the head revenue from operation vide Note 15. The Pr. CIT observed that the loss shown was capital in nature and required to be adjusted with the capital gains only and thus, it should be allowed to be carried forward for future set off instead of adjusting with other heads of income. It was further observed that during the relevant previous year the assessee company derived income mostly from rent of the house property and some allied service receipts lik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansaction period of investment, source of funds, involvement of the assessee in the share trading business and other essential parameters has resulted in loss. Thus, the Pr. CIT was very well aware that the assessee is dealing in share trading as business. While invoking Section 263(1) of the Income Tax Act, 1961, the Pr. CIT has not made out the case that the Assessment Order is passed without making inquiries or verifications which should have been made. In respect of receipt of DG sets/AC charges the Assessing Officer has raised a query vide letter dated 5/5/2014 i.e. notice under sub Section 1 of Section 142 and notice dated 21/1/2015 wherein the specific query at Question No. 23 and Question No. 13 was asked in respect of whether any rental receipts was received by the assessee and why the said income should not be treated as income from house property and income from other sources as well as called for details of names of the tenants along with agreements and complete postal address and PAN. The assessee vide reply dated 19/2/2015 has given a detail regarding share transactions about 2 lacs as well as all these share transaction which are reflected in books of accounts along ..... X X X X Extracts X X X X X X X X Extracts X X X X
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