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2016 (12) TMI 620 - BOMBAY HIGH COURTValidity of the order passed under section 263 - method of valuation of unlisted shares unquestioned - non-enquiry or inadequate enquiry - Held that:- AO after having asked a pertinent question of the method of valuing unlisted shares in his letter dated 12th January, 2000 did not pursue that line of enquiry. The required information was not furnished by the Appellant nor any explanation offered for not furnishing the same. It is also not a case where the Assessing Officer was satisfied with regard to his query by some other explanation offered by the Appellant. In fact, merely asking a question which goes to the root of the matter and not carrying it further is a case of nonenquiry, if the query is not otherwise satisfied while responding to another query. In the present facts, the question raised has not been responded to by some explanation which would render the enquiry commenced, futile. In fact, the CIT in his order dated 20th March, 2002 specifically exercised powers under Section 263 of the Act on the basis that the necessary information was not furnished by the Appellant in support of its claim nor the Assessing Officer enquired into the same. Thus, this is a case of nonenquiry and not inadequate enquiry. Therefore, the order of the Assessing Officer is certainly erroneous. There is no dispute that the order of the Assessing Officer is prejudicial to the Revenue. Thus no enquiry was conducted to find out the method of valuation of shares at ₹ 50/per share when purchased on 1st April, 1996 and sold at ₹ 10/per share on 1st April, 1996, substantial question of law admitted for our consideration is answered in the negative i.e. in favour of the Revenue
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