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2015 (12) TMI 835 - GUJARAT HIGH COURT

2015 (12) TMI 835 - GUJARAT HIGH COURT - TMI - Revision u/s 263 - CIT(A) directing the Income-tax Officer to make enquiries regarding the sources of investment in purchase of silver bars - Tribunal has held that the Commissioner of Income-tax had no jurisdiction to invoke the provisions of section 263 of the Act in view of the fact that the material obtained from the custom authorities did not form part of the record of the Assessing Officer - Held that:- This issue stands concluded by the decis .....

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sment and directing a fresh assessment, if he considers that any order passed by the Assessing Officer is erroneous insofar as it is prejudicial to the interests of the revenue. After examining the record and after making or causing to be made an enquiry if he considers the order to be erroneous then he can pass the order thereon as the circumstances of the case justify. Obviously, as a result of the enquiry he may come in possession of new material and he would be entitled to take that new mate .....

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ly, answered in the negative, that is, in favour of the revenue and against the assessee. The Appellate Tribunal was not right in law in holding that the Commissioner of Income-tax had no jurisdiction to invoke the powers under section 263 of the Act and direct the Income-tax Officer to make enquiries regarding source of investment in purchase of silver bars - Decided against assessee - INCOME TAX REFERENCE NO. 6 of 1994 - Dated:- 2-11-2015 - MS. HARSHA DEVANI AND MR. A.G.URAIZEE, JJ. FOR THE AP .....

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come-tax Act and directing the Income-tax Officer to make enquiries regarding the sources of investment in purchase of silver bars amounting to ₹ 17 lacs and ₹ 16 lacs on 3-11-1979 and 27-11-1979? 2 Heard Mr. M.R. Bhatt, learned Senior Advocate with Mrs. Mauna Bhatt, learned Senior Standing Counsel for the applicant. 3 The assessee is an individual. The assessment for the assessment year 1980-81 came to be completed under section 143A of the Income-tax Act, 1961 (hereinafter referred .....

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d also supplied 25 silver bars worth ₹ 12 lakhs on 3.11.1979 to various parties and a sum of ₹ 17 lakhs had been received by you. It is noticed that these transactions have neither been entered in your books of accounts nor the same was brought to the notice of the I.T.O. at the time of finalising the assessment. Thus, as the sources of investment in the silver bars and the amount realised on the sale of such silver bars were never enquired into by the I.T.O. his order dt.28.3.1983 i .....

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y the Commissioner, who set aside the assessment by holding that the order passed by the Income-tax Officer was erroneous inasmuch as it was prejudicial to the interests of the revenue. After setting aside the assessment, the Commissioner directed the Income-tax Officer to make enquiries regarding the source of investment in purchase of silver bars amounting to ₹ 17,00,000 and ₹ 16,00,000 under section 69 of the Act and further observed that if the assessee does not satisfactorily ex .....

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regard to seizure by customs in the assessment order. Therefore, it is quite likely that the material which the Commissioner of Income-tax desired the Income-tax officer to consider and enquire into was not at all before the income-tax officer atleast while completing the assessment of the assessee. Nowhere it is stated by the commissioner of Income tax whether such material was existing in the record of the income-tax officer. Therefore, there cannot be any question of enquiring into the sourc .....

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en such information came into the possession of Department. In this context the time lag between the month in which the assessment is completed and the month in which the jurisdiction u/s. 263 of the Act in ensumed also deserves attention and throws sample light to point out that the material which the Commissioner of Income-tax thought as not enquired into by the Income-tax officer was totally outside the case records of the assessee and obviously, therefore, there is no question of the same be .....

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working on his own with regard to impugned silver. Therefore, there is no question of any error in the order passed by the Income-tax officer. Hence, in our opinion, the provisions of sec. 263 are not legally invoked. In this view of the matter, we need not go into the other areas of controversy regarding the case of Mukar Corporation (Supra) whatever applicable or not and the like. 5 Mr. M.R. Bhatt, Senior Advocate, learned counsel for the appellant, invited the attention of the court to the d .....

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ovember, 2001 and the matter at the relevant point of time was pending before the third Judge of the High Court. The court had, therefore, thought it fit to defer the matter till the learned third Judge decides ITR No.65 of 1988 and 66 of 1988. The learned counsel drew the attention of the court to the decision of this court in the case of Commissioner of Income-tax v. Vallabhdas Vithaldas, rendered in ITR No.65 of 1988 with ITR No.66 of 1988, whereby the court has answered reference in relation .....

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that the controversy involved in the present case stands concluded by the decision of the Supreme Court in the case of C.I.T. v. Manjunathesware Packing Products (supra) as well as the above decision of this court rendered in ITR No.65 of 1988 with ITR No.66 of 1988. 6 Though served, there is no appearance on behalf of the respondent-assessee. 7. As noted hereinabove, the Tribunal has held that the Commissioner of Income-tax had no jurisdiction to invoke the provisions of section 263 of the Act .....

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nd examine the record of any proceeding under the Act and pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment, if he considers that any order passed by the Assessing Officer is erroneous insofar as it is prejudicial to the interests of the revenue. After examining the record and after making or causing to be made an enquiry if he considers the order to be erroneous .....

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aking of the assessment cannot be taken into consideration. This court, in Commissioner of Income-tax v. Vallabhdas Vithaldas, (supra) has answered the reference thus: In our view, the aforesaid observations of the Apex Court clearly give the widest meaning to the word "record". It is also pertinent to note that while Section 263(1) uses the word "record", the explanation goes further and states that the record includes all records relating to any proceeding under this Act. T .....

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39; case (118 ITR 447) on which the Tribunal had relied while passing the order giving rise to these references. 7. As regards the reasoning which appealed to the Tribunal, the word "therein" is not necessarily capable of the interpretation which appealed to the Tribunal. When the Commissioner examines the record of search and seizure operations in respect of any person, say the respondent assessees' son as in the instant case, and finds that such person had attributed some undiscl .....

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