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2022 (9) TMI 759 - AT - Income TaxRevision u/s 263 by CIT - appellant had made a claim for bogus capital gains from the penny stock script - Assessment u/s 153A - contention of assessee that no incriminating material was found as result of search and seizure action - When can assessment order be termed as an “erroneous”? - HELD THAT:- During the course of hearing of appeal before us, AR could not demonstrate that no incriminating material was unearthed as result of search and seizure action relating to the transaction of purchase and sale of penny stock script of M/s. S.V. Electricals Ltd.. The contention that no incriminating material was found as result of search and seizure action is not based on any material or evidence. An assessment order passed after obtaining the approval with the Joint/ACIT is also an assessment order, which is very much amenable to the jurisdiction u/s 263 - It is not the case of the appellant that AO had examined the issue of exemption of capital gains from purchase and sale of penny stock script of M/s. S.V. Electricals Ltd. as to the genuineness of claim. It is settled position of law that when the AO was expected to make an enquiry of a particular item of income of the claim for allowance of expenditure and if he does not make any enquiry as expected that would have certainly ground to interfere the order of assessment in exercise the power of revision u/s 263 as such assessment order is erroneous and prejudicial to the interests of the Revenue. AO should have made enquiry into the genuineness of the claim of exemption of capital gains in respect of purchase and sale of penny stock script of M/s. S.V. Electricals Ltd. in the light of the information received by him from the Investigation Wing of the Department, even if the information is received subsequent to original assessment order. As evident from the statement recorded by the AO about the share transactions undertaken by the assessee. It is settled position of law that the failure on the part of the AO to enquire into the claim of exemption, render the assessment order erroneous and prejudicial to the interests of the Revenue. PCIT has rightly exercised the power of revision u/s 263 - Decided against assessee.
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