Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (2) TMI 1025 - AT - Income TaxRevision u/s 263 - allowability or otherwise of the losses booked on account of revaluation of nonconvertible debentures and of futures & options - HELD THAT:- In cases where there is inadequate enquiry but Lack of enquiry, again the Ld. CIT must give and record the finding that the order/enquiry made is erroneous. In the decision DG HOUSING PROJECTS LTD [2012 (3) TMI 227 - DELHI HIGH COURT] it was also observed by the Hon’ble Court that the income tax officer in this case had made enquiries in regard to the nature of expenditure incurred by the assessee. The assessee had given detailed explanation in that regard by a letter in writing. Claim was allowed by AO on being satisfied with the explanation of the assessee. Such decision of the AO cannot be held to be erroneous simply because in his order he did not make an allowable discussion in that regard. In the given case of the assessee, we notice that assessee has filed the financial statement along with relevant notes to accounts. AO after verification of the return of income and notes to account, he sought certain clarification which was properly submitted by the assessee in writing. Ld. CIT observes that the note submitted by the assessee is nothing but notes forming part of accounts. AO has merely accepted those explanation without applying his mind completed the assessment. It is fact on record that the issue under consideration is not a new issue came up afresh in this assessment year, we notice that similar issue was came up in the earlier assessment year and the coordinate bench has decided the issue on merit as well. In our considered view the learned CIT is not appreciated the fact that AO has applied one of the possible view in this case. DR submitted that the case of the assessee falls under explanation – 2 in section 263 of the Act and further relied in the case of Crompton Greaves Ltd [2016 (2) TMI 169 - ITAT MUMBAI] - The issue under consideration is, whether the AO has passed the order without enquiries or verification which he should have made. In this case, the assessee has filed the financial statement alongwith the notes and also findings of ITAT in the earlier Assessment Year. AO seeks clarification on those issues. The assessee responds to the query and files certain information. AO considers the same to complete the assessment and he takes the view that the claim of the assessee is proper. Therefore, it shows that AO has verified the issue. Whether it is adequate enquiry or not is the issue. The explanation 2(a) is applicable when no enquiries were made and it is proved on record that AO has made certain enquiry, therefore, for the improper enquiries, the explanation 2(a) is not applicable. Therefore, this line of argument is rejected. Moreover, if the notes to account is clear and explains the case of the assessee, the AO need not have to enquire further. Accordingly, the order passed u/s 263 is set aside and the grounds raised by the assessee are allowed.
|