TMI Blog2016 (6) TMI 1004X X X X Extracts X X X X X X X X Extracts X X X X ..... here can be no doubt that where the view taken by the Assessing Officer is a possible view, interference under Section 263 of the Act, is not permissible. - Decided in favour of assessee - Income Tax Appeal No. 117 of 2014, Income Tax Appeal No. 119 of 2014 - - - Dated:- 16-6-2016 - M. S. Sanklecha And A. K. Menon, JJ. For the Appellant : Mr. Abhay Ahuja i/b. Padma Divakar For the Respondent : Mr. J. D. Mistri, Sr. Advocate with Mr. Atul Jasani ORDER P. C. Both these Appeals under Section 260A of the Income Tax Act, 1961 (the Act), assail the common order dated 20th March, 2013 passed by the Income Tax Appellate Tribunal (the Tribunal), for the Assessment Years 2007-08 and 2008-09. 2. The Revenue urges only the following common question of law for our consideration: Whether on the facts and in the circumstance of the case and in law, the Tribunal was correct in cancelling the order u/s. 263 and in passing the said order whether it was justified in relying upon the decision of this Court in the case of CIT v/s. Gabriel India Ltd,. 203 ITR 108? 3. It is an agreed position between the parties that the issue for consideration in both the Assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt-Assessee had claimed an amount of ₹ 20.50 Crores as gifts received by him from his father Mr. Deepak Modi and ₹ 116.60 Crores received from his sister Mrs. Purvi Mayank Mehta (NRI resident of Hong Kong and citizen of Belgium). Identical queries were made during the Assessment Proceedings as were made during the Assessment proceedings for Assessment Year 2007-08 in respect of gift received from his father and also sister in the subject Assessment year. Details similar to that filed during the assessment proceedings for the Assessment Year 2007-08 were also filed in respect of gift received during the Assessment Year 2008-09 received by the Respondent-Assessee from his father Mr. Deepak Modi. In particular a communication dated 10th December, 2010 received from Deepak Modi was also filed with the Assessing Officer pointing out that he is holding Bank Account with UBS AG Singapore, jointly with his daughter Mrs. Purvi Mayank Mehta, from where the fundshave been credited to his NRE A/c with Union Bank of India Mumbai. Copies of bank statements of UBS AG Singapore and the NRE A/c with Union Bank of India, Mumbai were furnished. In the above letter, he reiterates t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the orders passed by the Assessing Officer not being erroneous, no occasion to exercise powers of Revision under Section 263 of the Act could arise; (d) Nevertheless the CIT by two separate orders dated 12th March, 2012 and 28th March, 2012, in exercise of his powers under Section 263 of the Act set aside the Assessment Order dated 31st December, 2009 and 30th December, 2010 passed for Assessment Years 2007-08 and 2008-09 respectively. It further directed the Assessing Officer to enquire into the capacity of the donors and to decide the genuineness of the gifts received during the Assessment Years 2007-08 and 2008-09 . It further directed that in case the gifts are found to be not genuine, then the Assessing Officer was at liberty to invoke Section 68 of the Act. (e) Being aggrieved, the Respondent-Assessee by two separate appeals, assailed the orders dated 12th March, 2012 and 28th March, 2012 of the CIT before the Tribunal. In the impugned order, the Tribunal placed reliance upon the decision of this Court in CIT v/s. Gabriel India Ltd., 203 ITR 108 and applying the principles therein allowed the appeals. It held that in the present facts, the Assessing Officer held enq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of power under Section 263 of the Act; (c) No enquiry done by the Assessing Officer to find out whether the donor i.e. Mr Deepak Modi (father) had received money from M/s. Chang Jiang as claimed. Nor any enquiry done to find out whether the sister had earned amounts an account of Foreign Exchange Transactions as claimed. Thus, exercise of power under Section 263 of the Act by the CIT was called for; and (d) Reliance was also placed upon the decision of the Supreme Court in CIT v/s. Amitabh Bachchan 384 ITR 200 and the decision of the Delhi High Court in ITO v/s. DG Housing Projects Ltd., 343 ITR 329 to contend that this appeal ought to be admitted. 6. It is a settled position in law that powers under Section 263 of the Act can be exercised by the CIT on satisfaction of twin conditions viz. the Assessment Order should be erroneous and prejudicial to the Revenue. By erroneous is meant contrary to law. Thus, this power cannot be exercised unless the CIT is able to establish that the order of the Assessing Officer is erroneous and prejudicial to the Revenue. Thus where there are two possible views and the Assessing Officer has taken one of the possible views, no occasion to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tisfied about the identities of the donors, the source from where these funds have come and also the creditworthiness/ capacity of the donor. Once the Assessing Officer was satisfied with regard to the same, there was no further requirement on the part of the Assessing Officer to disclose his satisfaction in the Assessment Order passed thereon. Thus, this objection on the part of the Revenue, cannot be accepted. 8. It is next submitted that the donor had not been examined by the Assessing Officer. It is not in every case that every evidence produced has to be tested by cross examination of the person giving the evidence. It is only in cases where the evidence produced gives rise to suspicion about its veracity that further scrutiny is called for. If there is nothing on record to indicate that the evidence produced is not reliable and the Assessing Officer was satisfied with the same, then it is not open to the CIT to exercise his powers of Revision without the CIT recording how and why the order is erroneous due to not examining the donors. Thus, this objection to the impugned order by the Revenue is also not sustainable. 9. It was next submitted that no enquiry was done by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer and that is not done. In the second class of cases, where the order is not exfacie erroneous, then the CIT must himself conduct an enquiry and determine it to be so. The Court held that it is not permissible to the CIT while exercising power under Section 263 of the Act to remit the issue to the Assessing Officer to reexamine the same and find out whether earlier order of Assessment is erroneous. It is the CIT who must hold that the order is erroneous, duly supported by reasons. In the present facts, the CIT in exercise of its powers under Section 263 of the Act has merely restored the Assessment to the Assessing Officer to decide whether the gifts were genuine and, if not, then the Assessment could be completed on application of Section 68 of the Act. In this case, the order passed by the Assessing Officer is not perse erroneous and further the CIT has not given any reasons to conclude that the order is erroneous. In fact, he directs the Assessing Officer to find out whether the order is erroneous by making further enquiry. This the decision of the Delhi High Court in DG Housing Projects Ltd., (supra), clearly negates. In the above view, the decision of Delhi Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the present facts, the Assessing Officer was satisfied, consequent to making an enquiry and examining the evidence produced by the Assessing Officer, establishing the identity and creditworthiness of the donor as also the genuineness of the gift. The CIT in his order of Revision, does not indicate any doubts in respect of the genuineness of the evidence produced by the Assessee. The satisfaction of the Assessing Officer on the basis of the documents produced is not shown to be erroneous in the absence of making a further enquiry. It is made clear that our above observations should not be inferred to mean that it is open to the Assessing Officer to enquire into the source of source for the purpose of the present facts. This is a case where a view has been taken by the Assessing Officer on enquiry. Even if this view, in the opinion of the CIT is not correct, it would not permit him to exercise power under Section 263 of the Act. In fact, the Apex Court in Amitabh Bachchan (supra) has observed that there can be no doubt that where the view taken by the Assessing Officer is a possible view, interference under Section 263 of the Act, is not permissible. 13. In view of the above, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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