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2017 (12) TMI 1541 - HC - Income TaxRevision u/s 263 - materials before the Commissioner to justify his finding that the assessment order for the A.Y. 87-88 was erroneous insofar as it was prejudicial to the interests of the Revenue - improper and incomplete examination of the transactions between the assessee and the Trusts - Held that:- No findings have been rendered by the CIT that the AO has made an incorrect assessment of facts or incorrect application of law to satisfy the requirements of the order being erroneous and prejudicial to the interests of the Revenue, as held in Malabar Industrial Company Ltd. (2000 (2) TMI 10 - SUPREME Court). In the opinion of the CIT, the AO ought to have made a further probe into the nature of the transactions between the assessee and the two Trusts. In other words, the CIT has desired a fishing and roving enquiry which is not permissible CIT has arrogated to himself the role of appellate body forgetting that he was only exercising his revisional power, the scope of which is far narrower than the scope of appeal. It is not as if from the material on record the CIT has found the transactions between the assessee and the two Trusts as sham or nominal, or any material was found revealing fraudulent nature of the transactions. He only wanted to know on a further appreciation/examination whether the transactions suffer from any such features. Therefore, the Tribunal, in our opinion, is justified in terming the order of the CIT as based on mere conjectures and surmises, and not on the facts borne out by the record. CIT has not suspected the bona fides in creation of the Trusts and their activities or that no material is found showing that the assessee had made an effort to reduce the tax liability on the transactions entered with the two Trusts. - Decided in favour of assessee
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