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2023 (8) TMI 502 - AT - Income TaxRevision u/s 263 - Addition u/s 68 - HELD THAT:- The first thing that comes up from the finding of learned Pr. CIT is that when notices u/s 263 of the Act was issued there was no observation of questioning the assessment order on the basis of non-examination of the issue of suspicious transactions relating to short term capital loss/ long term capital gain on shares by the AO. The issue required to be explained by assessee was restricted to the non-examination of the difference in the number and value of shares shown to be purchased and sold as per ITS data. However, during the revisionary proceedings being satisfied of these factual queries without calling upon the assessee to explain further about his opinion of lack of inquiry on whole of the issue and without giving any specific findings by way of any further inquiry at his own end, learned Pr. CIT gave a direction for a discreet inquiry. The Bench is of the considered view that such an order of conducting a discreet inquiry cannot be part of exercise of revisional jurisdiction. CIT was expected to cite specific error in the inquiry conducted by the learned AO to conclude that there was lack of inquiry on the issue at the stage of scrutiny assessment. The assessee has given a detailed reply to the aforesaid questionnaire and the paper book filed on behalf of the assessee brings forth that copy of reconciliation of shares, copy of D-Mat account, copy of ledger account of laws from shares, contract note of job / enter day trading, copy of order u/s 143(3) of the CCL International Ltd. for corresponding A.Y. 2014-15 were before Ld. AO who must examined the same. Rather, the Bench is of considered opinion that when the scrutiny assessment was for the reason “suspicious transaction relating to short term capital loss / long term capital gain on shares (inputs from Investigation Wing)” then if the aforesaid documents and evidence were before Ld. AO in response to the aforesaid questionnaire and he had not made any adverse remark upon the same and Ld. PCIT was also satisfied with regard to the discrepancy which was made foundation for issuance of notice u/s 263, then the impugned assessment order could not have been considered erroneous and prejudicial, to be followed by the direction of discreet inquiry. N.P. rate of 8% applied by the A.O. on purchase and sale of cloth - The assessee had filed details of party wise sale / purchase along with confirmations and ITR of all the parties available. The copy of the stock register, copy of bank statement and bank pass book of assessee and the comparative financials for A.Y. 2013-14 to 2016-17 were made available however, not a word what discussed by Ld. PCIT. The Bench is of considered opinion while exercising Revisional Jurisdiction, Ld. PCIT was expected to go on to the merits of the submissions and also make form some independent opinion however the same is lacking. Thus, the findings of learned Pr. CIT that there was lack of inquiry on the two issues, is not sustainable. Even otherwise what comes up admittedly from the records is the fact that assessment order was passed on 30.12.2016. Assessee had preferred an appeal against same u/s 250 and the same was filed before Ld. CIT(A) on 28.01.2017. The same was dismissed on 02.02.2018. However, the notice u/s 263 was issued on 28.06.2018, that is after the dismissal of the appeal by CIT(A). The impugned order u/s 263 was passed on 30.03.2019. The issues examined by Ld. CIT(A) pertains to both the facts. Ld. CIT(A) in order dated 02.02.2018 had taken note of the fact, the scrutiny assessment was made on the specific issue of suspicious transaction relating to short term capital loss/ long term capital gain on shares (inputs from Investigation division) and had upheld the order of ld. AO of the addition made only with regard to bogus sales and purchase. Both the issues were examined by the Ld. CIT(A) and thus the explanation (c) to Section 263(1) of the Act comes into effect which provides that where the assessment order in regard to which revisional powers are being exercised has been subject matter of any appeal then the powers of revision only extend to such matters as had not been considered and decided in the appeal. In the case in hand, there is no doubt the Ld. CIT(A) has taken into consideration both the issues and sustained the order of Ld. AO qua one. Thus exercise of jurisdiction u/s 263 was not called for being beyond the powers .Appeal of assessee is allowed.
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