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2013 (6) TMI 531 - AT - Income TaxJurisdiction power u/s 263 by CIT(A) - directing AO to disallow the pre-operative capitalisation of interest, enquire into the genuineness of transaction relating to 22% non-convertible debentures subscribed by the holding company,enquire into the genuineness of transaction relating to advances made for the purpose of land development charges and disallow @ 22% p.a. as interest from preoperative capitalisation, enquire into the genuineness of claim of interest included in preoperative capitalisation and directing AO to compute interest on the deposit at 15% from the date of deposit till the closing date relevant accounting period - Held that:- AO after duly considering the explanation and information filed in response to the notice issued u/s. 143(2) on being satisfied with such explanation chose not to make any further enquiry. Endless enquiry is not possible and it is for the AO to decide when to end the enquiry. The CIT cannot transgress the jurisdiction under Section 263 by mentioning that no proper enquiry was made. As decided in Rishi Kumar Gupta v. CIT [2004 (2) TMI 270 - ITAT AGRA] AO having made the assessment after enquiry, as admitted by the CIT in his notice as well as in his order u/s. 263, he was not justified in setting aside the assessment on the ground that the AO had failed to make "proper enquiry". Thus the order passed u/s. 263 quashed. In favour of assessee.
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