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2019 (9) TMI 206 - AT - Income TaxRevision u/s 263 - capital loss on account of share transactions - HELD THAT:- Allegations that the sale of shares transactions was suspicion is not supported by facts. No revision can take place based on mere suspicion. Pr. CIT has not controverted the submissions and evidences filed by the assessee. When the assessee has furnished all the details, including the purchase details and sale details, CIT has not explained, as to how he came to a conclusion that there is an error that caused prejudice to the interest of the revenue. There is no verification or enquiry by the Pr. CIT of the information furnished by the assessee to him. The Pr. CIT has simply set aside the matter to the file of the AO for fresh adjudication, without himself conducting any enquiry into the matter. The law requires the Pr. CIT to himself conduct an enquiry and then only come to a conclusion that the order in question is erroneous and prejudicial to the interest of the revenue. If the Pr. CIT had not applied his mind to the replies, details and evidences filed by the assessee then the order passed, without application of mind or verification is bad in law. We have to necessarily hold that the exercise of power by the Pr. CIT u/s 263 was bad in law. We also find that in her reply, the assessee has stated before the Pr. CIT that the assessee has earned capital gain on the sale of shares of M/s. Goodwill Griha Nirmal Pvt. Ltd., and that she has not incurred any loss as alleged in the said notice. The details were furnished. Despite these explanation and evidences filed, the Pr. CIT had committed a factual error in concluding at page 10 para 5 of his order that the assessee has claimed capital loss on account of share transactions of M/s. Goodwill Griha Nirman Pvt. Ltd.. An order passed u/s 263 based on a mistake of fact, cannot be sustained. This is not a case of non enquiry or non application of mind. The allegation of the Pr. CIT is that the issue requires further verification and investigation. Appeal of the assessee is allowed.
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