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TMI Blog2010 (8) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Tribunal was right in law in holding that assumption of jurisdiction under section 263 by the Commissioner of Income-tax without giving a specific finding as to whether the amount of Rs. 48 lakhs was assessable under section 68 or 69 is unjustified, particularly when section 68 had no application? 2. Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that if the Assessing Officer had all the information at the time of completion of assessment in relation to a certain amount remedial powers under section 263 cannot be exercised even when the available information has not been utilised in accordance with law?" "RA No. 57/Chandi/96 1. Whether on the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement of his son-in-law Dr. Arun Gupta who accompanied him was also recorded on the same date corroborating the version given by the assessee. Thereafter, onMay 16, 1989, the assessee surrendered the amount of Rs. 48 lakhs claimed to have been paid to Shri J. M. Paul as additional taxable income. Later, the assessee resiled from the statement on the ground that he had made statement to avoid harassment and to go ahead with Shagan ceremony on the eve of marriage of his son. Accordingly, fresh assessment was made onApril 29, 1993, and the amount of Rs. 48 lakhs was added as income for the period from August 1988 to January 1989 under section 69. The assessment was upheld by the Com-missioner of Income-tax (Appeals). On further appeal to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble income and, thus, the order of the Assessing Officer was erroneous. This being the position, requirements of section 263 of the Act, i.e., order sought to be revised being erroneous and against the interest of the Revenue were fully met. The said order could not be held to be illegal only on the ground that tax-ability of the amount was not specified under section 68 or 69. He further submitted that the Tribunal erred in observing that power under section 263 of the Act could not be exercised by the Commissioner since infor-mation was available with the Assessing Officer at the time of completion of assessment which had not been utilized by the Assessing Officer. He submitted that the very purpose of section 263 of the Act is to remedy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoked the pro-visions of section 263 of the Act in accordance with law ? (ii) Whether the Income-tax Appellate Tribunal was justified in deleting the addition of Rs. 48 lakhs ? (iii) Whether the assessee was entitled to deduction of Rs. 48 lakhs as business loss from the undisclosed income? Reg : (i) 8. Section 263 of the Act empowers the Commissioner of Income-tax to revise an order passed by the Assessing Officer which is erroneous in so far as it is prejudicial to the interest of the Revenue. The sine qua non for exer-cise of jurisdiction under this section is that there should be an error which must be "prejudicial to the Revenue." The Assessing Officer, in the present case, had failed to tax the addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48 lakhs under section 68/69 of the Income-tax Act, 1961." 11. In the existing facts and circumstances, the Commissioner had in no uncertain terms recorded the failure of the Assessing Officer to advert to exigibility of Rs. 48 lakhs to tax in the hands of the assessee which has resulted in erroneous and prejudicial assessment order datedMarch 27, 1991, being passed. The Commissioner had further directed the Assessing Officer to complete the assessment afresh after considering the taxability of Rs. 48 lakhs as unexplained cash credit or unexplained investment. The Tribunal was, thus, not justified in annulling the order of the Commissioner especially when, as noticed earlier, the essential requirements of section 263 of the Act had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt made was corroborated by circumstances and was not shown to be erroneous; the retraction thereof would not deviate from its correctness. No doubt, the statement made by the assessee was withdrawn; mere withdrawal of such a statement could not be taken to be conclusive. No explanation much less plausible explanation had been furnished by the assessee as to why he could not retract from his statement made onMay 14, 1989and again onMay 16, 1989at the earliest occasion and what prevented him from approaching the authorities raising his grievance in this regard. The silence on the part of the assessee tillSeptember 11, 1989remains unexplained and the retraction from the earlier statement would be an afterthought. The Tribunal was, thus, not j ..... X X X X Extracts X X X X X X X X Extracts X X X X
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