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2022 (6) TMI 409 - AT - Income TaxRevision u/s 263 - Penalty u/s 271D - unsecured loans taken from friends and relatives - offence u/s 269SS - loans to ascertain identity, genuineness of the transactions and creditworthiness of the parties - HELD THAT:- What is clear is that the AO has accepted the fact of amount received by the assessee from his friends and relatives, is loan, which comes under the provisions of Sec.269SS of the Act. Therefore, once a particular receipt has been treated as loans and advances, then the very same receipts cannot be examined in light of provisions of Sec.68 of the Act, to treat the said amount as unexplained credit and income of the assessee. AO cannot blow hot and cold together. In this case, the AO has considered unsecured loans taken from friends and relatives as cash loans and also levied penalty for contravention of provisions of Sec.263 of the Act. On the other hand, the PCIT has taken up the revision proceedings on very same loans and advances in light of provisions of Sec.68 of the Act. In our considered view, powers exercised by the PCIT u/s.269SS of the Act, is not in accordance with law. It is a well settled principle of law that the PCIT can exercise the powers only in a situation, where the assessment order by passed the AO is erroneous in so far as it is prejudice to the interest of the Revenue. In this case, the assessment order passed by the AO is neither erroneous, because, the issue taken up by the PCIT, has been examined by the AO and further, the assessment order passed by the AO is nor prejudice to the interest of the Revenue, because, the Department has already considered amounts to question as loans and levied penalty u/s.271D of the Act. Further, the assessee had settled the tax dispute under Vivad Se Viswas Scheme, 2020 and paid necessary taxes. Therefore, from the above, it is very clear that there is no prejudice caused to the Revenue. We are of the considered view that the PCIT is erred in revision of assessment order u/s.263 of the Act, because the assessment order passed by the AO is neither erroneous nor prejudice to the interest of the Revenue. Hence, we quashed the revision order passed by the PCIT u/s.263 - Decided in favour of assessee.
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