9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (3) TMI 1273 - AT - Income TaxRevision u/s 263 - lack of enquiry or inadequate enquiry - as per CIT AO allowed the long term capital loss claimed on sale of Zero Coupon Bonds to be carried forward for set-off in subsequent years even though such loss was computed after indexing the cost of acquisition which was not allowable as per the provisions of Section 48 - HELD THAT - Long-term capital loss has already been mentioned in the computation of total income submitted by the assessee before the AO income under the head capital gain. As found that the long-term capital loss on sale of ZCB issued by NABARD has also been disclosed in the computation of income. In the statement showing profit of loss on sale of investment. The assessee has also filed notice being the confirming part of the taxable income. We further find that in the present case the assessment proceedings was initiated vide notice u/s 142(1) and in response to the said notice a detailed reply has been filed by the assessee before the DIT. Computation chart has clearly revealed that the short term capital gain includes short term capital loss on sale of utilization income fund. A detailed submission has already filed by the assessee before the AO and AO accepted the contention and did not make adjustment. We have gone through the citation made by the assessee and find that in a case of D. G Housing Projects Ltd. 2012 (3) TMI 227 - DELHI HIGH COURT wherein has held that one has to keep in mind the distinction between lack of enquiry and inadequate enquiry and even if there is any enquiry by the AO even if inadequate enquiry the PCIT cannot invoke the provision of Section 263 of the Act to give direction to the AO to undertake further enquiries. We are in this view that the impugned order of PCIT is not sustainable under the law. We do not find that assessment order was erroneous and prejudicial to the interest of justice to the revenue. Accordingly we quashed the impugned order. Appeal filed by the assessee is allowed.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this case were:
ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents: The legal framework primarily revolves around Section 263 of the Income Tax Act, which empowers the PCIT to revise an order if it is erroneous and prejudicial to the interest of the revenue. The precedents cited include decisions from the Delhi High Court and the ITAT Kolkata, which emphasize the distinction between lack of inquiry and inadequate inquiry by the AO. Court's interpretation and reasoning: The Tribunal examined whether the AO conducted adequate inquiries into the claims made by the assessee. The Tribunal noted that the AO had indeed conducted inquiries and considered the documents submitted by the assessee during the assessment proceedings. The Tribunal emphasized that a distinction must be made between lack of inquiry and inadequate inquiry. If the AO conducted an inquiry, even if inadequate, the PCIT cannot invoke Section 263 without conducting an independent inquiry and providing specific findings. Key evidence and findings: The Tribunal reviewed the paper book and submissions made by the assessee, which included various documents such as the computation of total income, audited accounts, and specific replies to queries raised during the assessment proceedings. The Tribunal found that the AO had considered these documents and made inquiries during the assessment process. Application of law to facts: The Tribunal applied the legal principles from the cited precedents to the facts of the case. It concluded that the AO had conducted inquiries and that the PCIT had not provided any specific findings to demonstrate that the assessment order was erroneous. The Tribunal noted that the PCIT's order lacked independent inquiry and specific findings, which are necessary to invoke Section 263. Treatment of competing arguments: The Tribunal considered the arguments from both the assessee and the revenue. The assessee argued that the assessment order was neither erroneous nor prejudicial to the interest of the revenue, citing various precedents. The revenue supported the PCIT's order. The Tribunal found the assessee's arguments more persuasive, emphasizing the need for specific findings and independent inquiry by the PCIT. Conclusions: The Tribunal concluded that the PCIT's order was not sustainable under the law as it lacked specific findings and independent inquiry. The Tribunal quashed the PCIT's order, allowing the assessee's appeal. SIGNIFICANT HOLDINGS Preserve verbatim quotes of crucial legal reasoning: The Tribunal cited the Delhi High Court's decision in D.G. Housing Projects Ltd., emphasizing that the PCIT must provide specific findings and conduct an independent inquiry before invoking Section 263. The Tribunal also referenced the ITAT Kolkata's decision in Animesh Autocorp Pvt. Ltd., which highlighted similar principles. Core principles established:
Final determinations on each issue:
|
