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2023 (4) TMI 25 - AT - Income TaxRevision u/s 263 - long term capital gains declared by the assessee u/s. 10(38) - PCIT came to the conclusion that although the assessment has been re-opened for specific purpose of examination on information received from Income-tax Department, Kolkata, but the AO simply completed reassessment by accepting explanation furnished by the assessee without carrying out required enquiries - HELD THAT:- PCIT, it is abundantly clear that the sole basis for the PCIT to invoke his jurisdiction is information received from Income-tax Department, Kolkata on the survey conducted in case of M/s. Onkar Supply Pvt Ltd and statement recorded from Shri. Ashok Kumar Kayan, a broker acted as an entry operator in providing accommodation entries of long term capital gains. Since, the issue is a subject matter of re-assessment proceedings from the Assessing Officer, it can be safely concluded that the AO has verified the issue in light of relevant facts under right perspective of law and concluded that long term capital gains declared by the assessee is genuine and thus, we are of the considered view that there is no scope for the PCIT to set aside the assessment order u/s. 263. No doubt in case where there is complete lack of enquiries, the PCIT is having powers to set aside the assessment order. However, in a case where there is an enquiry, even if said enquiry is inadequate there is scope for the PCIT to step into revise the assessment order. On perusal of facts available on record, at best it can be said that it is not a case of lack of enquiry, but may be case of inadequate enquiry. Therefore, the powers exercised by the PCIT u/s. 263 of the Act is not in accordance with law. Report of investigation wing is not sacrosanct, but what is necessary to decide the issue is whether said transactions are genuine or not, is independent enquiry in light of available materials. In this case, the evidences filed by the assessee before the AO during the re-assessment proceedings clearly shows that long term capital gains declared u/s. 10(38) is nothing to do with survey conducted in the case of M/s. Onkar Supply Pvt Ltd and statement recorded from Shri Ashok Kumar Kayan. Therefore, we are of the considered view that capital gains declared by the assessee from sale of certain shares cannot be considered as bogus only on the basis of report of Income-tax Department. Thus order passed by the AO is neither erroneous nor prejudicial to the interests of the revenue, on the issue of long term capital gains declared u/s. 10(38) - Decided in favour of assessee.
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