Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (10) TMI 1423 - AT - Income TaxRevision u/s 263 - case of the assessee was selected for framing scrutiny assessment u/s 143(3) by CASS for farming limited scrutiny - Substantial increase in capital in a year - HELD THAT:- The assessee has duly explained all the increase in the capital as well investments during the course of assessment proceedings conducted by the AO. These investments were all made in earlier years and were brought in the books of accounts of the assessee for the impugned assessment year as the same were not reflected by assessee in his balance sheet of the earlier years. The assessee has duly explained the sources of such investments made in the earlier years before the AO which has been duly recorded in Para No.4 of the Assessment Order passed by the AO. The AO also made inquiries with M/s. Avanti Leathers Ltd. which confirmed the transactions and balances and on such inquiries, the AO had found that the same was in order. The relevant portion of assessment order is reproduced in para 2.2 of this order. Thus, it is only after making necessary verifications and inquiries, the AO framed assessment order. PCIT has not brought on record anything incriminating which warrant invocation of extra-ordinary revisionary powers as are enshrined u/s 263 of the 1961 Act. On the other hand the learned PCIT is seeking to tax both sides of entries in the Balance Sheet viz. capital introduced on the liability side as well corresponding investments reflected out of said capital introduced which is incompressible and further all these capital introduced and investments made were of the earlier years but the same were not reflected in the Balance Sheet for those years. Merely because the item of investments of earlier years were not added in the Balance Sheet of that years will not give rise to its taxability, unless it is shown that it is out of undisclosed sources . The assessee has explained its sources before the AO as well learned PCIT. There is no allegation as to the investments being made out of undisclosed or undeclared sources. Thus, in our considered view no case is made out by learned PCIT for invoking extra-ordinary revisionary powers as are enshrined in the provisions of Section 263 of the 1961 Act as the assessment order passed by the AO cannot be termed as erroneous so far as prejudicial to the interest of Revenue. In this case, proper inquiries and verifications had been made by the AO and after such inquiries and verifications made, the AO accepted the contentions of the assessee and in our considered view . the revisionary order dated 03.01.2019 passed by ld.PCIT u/s 263 of the 1961 Act is not sustainable in the eyes of law as the assessment order dated 23.12.2016 passed by the AO u/s 143(3) cannot be termed as erroneous in so far as prejudicial to the interest of the Revenue. In these circumstances, we allow the appeal of the assessee and quash the revisionary order passed by ld.PCIT. The assessee succeeds in its appeal.
|