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2022 (11) TMI 812 - AT - Income TaxRevision u/s 263 - subject matter of appeal before the Ld. CIT(Appeals) and is still pending adjudication - as per CIT, difference in closing stock was not added U/s 68 but net profit was assessed as income and therefore the assessment order dated 30.12.2017 passed u/s 143(3) r.w.s 147 of the Act appears to be erroneous as well as prejudicial to the interest of the revenue - HELD THAT:- We could see from the grounds of appeal that the assessee disputed the entire addition including the difference in closing stocks and, therefore, when the larger issue of whether there is any difference in closing stock at all is the subject matter of appeal before the Ld. CIT(Appeals) and is still pending adjudication the Ld. PCIT could not have assumed jurisdiction u/s. 263 of the Act. The jurisdictional High Court in the case of CIT Vs. Vam Resorts and Hotels Pvt. Ltd. [2019 (8) TMI 1418 - ALLAHABAD HIGH COURT] held that when an appeal is pending before the Ld. Commissioner (Appeals) the exercise of jurisdiction u/s. 263 of the Act by the CIT is barred as per clause (c) of Explanation 1 to Section 263 of the Act - Also see SMT. RENUKA PHILIP [2018 (12) TMI 129 - MADRAS HIGH COURT] Thus since the larger issue of whether there is any difference in closing stock at all is the subject matter of appeal before the Ld. CIT(A) we hold that the Ld. PCIT is barred in assuming jurisdiction u/s. 263 of the Act. Also from the order of the Ld. PCIT the assessment order passed by the Assessing Officer was held to be erroneous and prejudicial to the interest of the Revenue stating that the AO has not made enquiries. The Ld. PCIT is also of the view that the difference in closing stock should have been added as income u/s. 68 of the Act. In the course of assessment proceedings the assessee was required to explain the difference in closing stock and the assessee has furnished charts, reconciliation statement, explanations etc., which was examined by the AO and decision was taken to treat the difference in opening stock, purchases, sales, closing stock, GP/net profit as income of the assessee. Therefore, the observations of the Ld. PCIT that the AO has not carried out any enquiries are not borne out from record. We also observe that the Ld. PCIT having observed that the AO has not made an enquiry the Ld. PCIT failed to point out any deficiency in enquiries and also not made any minimal enquiry by himself to prove that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of Revenue. As enquiries were certainly made by the Assessing Officer as observed above and it is not a case of no enquiry at all. In view of the decision in the case of DIT vs. Jyoti Foundation [2013 (7) TMI 483 - DELHI HIGH COURT] we hold that the Ld. PCIT should not have set aside the assessment order and directed the Assessing Officer to conduct enquiry. - Decided in favour of assessee.
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