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2022 (1) TMI 626 - AT - Income TaxRevision u/s 263 by CIT - bogus share capital, share application money and unsecured loan introduced in the assessee company - As per CIT AO failed to make independent inquiry with regard to the same - HELD THAT:- We are unable to concur with the Ld. Pr. CIT and we find that in the guise of exercising revisionary powers the Ld. Pr. CIT is taking a different view on the matter and in fact dictating the extent of inquiry which ought to have been conducted by the AO, without pointing out as to how the AO’s view accepting the claim and explanation of the assessee, vis a vis source of bogus capital introduced, was flawed or suffered from any infirmity considering the facts and circumstances of the case. Admittedly the assessee during survey had surrendered bogus capital introduced. It was incumbent on the assessing officer therefore, during assessment proceedings, to have sought an explanation and inquire into the source of the same also. The assessee we find therefore had not only admitted to and surrendered on account of its own money introduced by way of bogus share capital/share application/ unsecured loan , but had explained the manner of introducing the same by way of booking bogus expenditure and rerouting the payment made on account of the same in the form of share capital etc giving all details of the modus operandi ,including the name of parties involved in the same and the dates of the entire money trail. Thus a full and complete disclosure was made by the assessee, who had come completely clean with regard to the bogus transactions undertaken, revealing all possible details of the same. Nothing has been pointed out by the Ld. Pr. CIT in the above explanation and the details filed by the assessee, so as to raise any suspicion regarding the same. With the disclosure being so complete in all aspects and there being nothing to doubt the same, the acceptance of the explanation by the AO, we find ,in the present circumstances cannot be said to be out of place or unreasonable. Even Explanation 2 to section 263, listing various instances where orders of AO are to be treated as erroneous causing prejudice to the Revenue, states orders passed without making inquiries or verification which should have been made(italics provided by us), as one of the instances. Meaning thereby that lack of inquiry by itself is not sufficient for exercising revisionary jurisdiction but it is lack of inquiry “which should have been made”. The finding of error in the order of the AO by the Ld. Pr.CIT, on account of alleged lack of inquiry, without pointing out the necessity for conducting the same, we find is nothing but having a different opinion on the matter, and therefore, we do not agree that the lack of inquiry resulted in the order passed being erroneous so as to cause prejudice to the Revenue. - Decided in favour of assessee.
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