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2014 (4) TMI 771 - AT - Income TaxValidity of setting aside of assessment order u/s 263 of the Act Applicability of section 2(22)(e) of the Act Deemed dividend Loan from company Held that:- The decision in Commissioner of Income-tax Versus Vikas Polymers [2010 (8) TMI 745 - Delhi High Court] followed - the CIT cannot invoke his jurisdiction u/s 263 of the Act for inadequate inquiry - the assessment order can be said to be erroneous only when there is total lack of inquiry on any point - there was no inquiry conducted by the Assessing Officer with reference to the applicability of Section 2(22)(e) with regard to loan claimed to have been taken from ACIL - money received by the assessee prior to sale of shares would be loan to the assessee from the party - no material was placed before the AO and the AO has not at all examined the applicability of Section 2(22)(e) with reference to the loan taken by the assessee from ACIL - before the AO, the assessee denied to have taken any loan - It is only before the CIT that the assessee came with the explanation that the amount received from ACIL was against the sale proceeds of the shares the AO has not at all examined the applicability of Section 2(22)(e) and, it is a case of lack of inquiry. Claim of deduction u/s 54F of the Act Investment in residential house Held that:- The AO did raise the query with reference to Section 54F and the assessee gave reply - the AO did raise the query in this regard and it cannot be said that there was no inquiry by the AO with reference to allowability of Section 54F to the assessee so as to empower the CIT for invoking his jurisdiction u/s 263. The order of learned CIT modified partly - His finding with regard to no inquiry u/s 2(22)(e) and the difference between the net profit as per profit & loss account and the net profit shown under various heads in the computation of income is upheld and the CITs finding with regard to Section 54F of the Act is vacated because the AO did make necessary inquiry with regard to deduction u/s 54F claimed by the assessee - the order u/s 263 is partly modified and the AO is directed for fresh adjudication and to inquire into and re-adjudicate the applicability of Section 2(22)(e) and also the allocation of income under the various heads by the assessee in the computation of income Decided partly in favour of Assessee.
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