Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (10) TMI 690 - ITAT MUMBAIRevision u/s 263 by CIT - addition u/s 68 treating the entire share capital subscribed as unexplained cash credit - AO concluded the assessment u/s 143(3) r.w.s. 254 in which he has estimated the commission @1% on the entire amount of share capital an accordingly made an addition - HELD THAT:- From the perusal of the details submitted by the assessee it is noticed that the assessee has submitted a reconciliation linking the amount received as share capital to an excel sheet seized during the search of Shri Shirish C Shah. It is relevant here to mention that the AO in the original proceedings u/s 143(3) had issued notices under section 133(6) to check the source of the capital contribution and had received a reply from the parties that they had not made any capital contribution - Given this, in our considered view, AO in the remanded proceedings ought to have looked into further details based on the reconciliation to verify how each line in the bank statement relates to the seized material of Shirish C Shah. The reconciliation statement as it is does not establish the fact that the source for the capital contribution is from material seized without further enquiry or verification of details. Therefore we are inclined to agree with the finding of the PCIT that there is lack of enquiry on the part of the AO as far as one leg of the transaction is concerned where assessee is claimed to be the conduit. It is the duty of the AO to ascertain the truth of the facts stated / submitted by the assessee especially when the circumstances of the case are such as to provoke an inquiry and the word "erroneous" in section 263 includes the failure to make such an inquiry. The decisions relied on by the AR cannot be directly applied to assessee's case since the findings are based on facts specific to each case. PCIT while invoking the explanation has given a clear finding with regard to the lack of enquiry on the part of the AO and has accordingly held the order to erroneous and prejudicial to the interest of the revenue. We therefore see no infirmity in the action of the PCIT. We hold that the PCIT was justified in assuming the jurisdiction by invoking explanation (2) to section/s 263 of the Act and setting aside the assessment order. Appeal filled by assessee dismissed.
|