TMI Blog2017 (5) TMI 1266X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Thus, from the contents of order of assessment we may conclude that order maybe erroneous as the same is not speaking order on a particular issue, however the order is not prejudicial to the interest of revenue. The assessing officer passed the order which is based on one of the possible view. We may further conclude that the order passed by learned Commissioner does not fulfill the twin condition as contemplated under section 263 of the Act. The order of learned Commissioner is based on change of opinion. - Decided in favour of assessee. - ITA No. 3511/Mum/2014 - - - Dated:- 19-5-2017 - Shri G. S. Pannu, Accountant Member And Shri Pawan Singh, Judicial Member Assessee by : Shri Prakash Jotwani -Advocate Revenue by : Shri N.P. Singh (CIT-DR) ORDER Per Pawan Singh, Judicial Member 1. This appeal by assessee under section 253 of the Income-tax Act (the Act) is directed against the order of ld. Commissioner of Income Tax-8(CIT), Mumbai passed under section 263 of the Act dated 24.03.2014 for the Assessment Year 2009-10. 2. The background facts are that the assessee filed return of income for relevant AY on 29.09.2009 declaring total income at loss of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17.11.2011 and directed the AO to pass the assessment order afresh by applying the provisions of section 45(2) of the Act to the conversion of share from investment or capital asset to stock-in-trade. The loss was directed to be treated as speculation loss. Aggrieved by the order of ld. CIT, the assessee has filed the present appeal before us. The assessee has raised the following grounds of appeal: On the facts and circumstances of the case and in law: 1. The learned CIT erred in passing an order u/s 263 on the facts which were considered by the AO when he passed the original assessment order. 2. The learned CIT erred in passing an order u/s 263 on the issue of Sec. 45 (2) and treating loss as capital loss without raising the issue by way of a show cause notice thus violating principles of natural justice. 3. The learned CIT erred in applying provisions of Explanation to Sec. 73 of the IT. Act, 1961 and thereby treating the loss as speculative. 4. The learned CIT erred in not accepting that in a case where other income exceeds business income then a provision of Explanation to Sec.73 does not apply. 3. We have heard the submissions of Shri Praka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue. It was further submitted that the phrase erroneous and prejudicial are not defined in the Income-tax Act. The Black Law Dictionary defines erroneous as involving error, deviating from the law. Thus, erroneous assessment refers to an assessment that deviates from the law and is therefore, invalid and is defective being jurisdictional in nature. Similarly, the erroneous judgment means one render not according to course and practice of court, but contrary to law upon mistaken view of law . The phrase prejudicial to the interest of Revenue has to be read in conjunction of the erroneous order passed by AO. Every loss of Revenue as a consequence of order of AO, though cannot be treated as prejudicial to the interest of Revenue unless the views taken by AO are inconsistent by law. In support of his submission, ld. DR for Revenue relied upon the decision of Hon ble Supreme Court in case of Malabar Industries Company Ltd. vs. CIT (234 ITR 83) and Smt. Taradevi Aggarwal vs. CIT (1973) 88 ITR 323. The ld. DR further argued that incorrect assumption of fact by AO renders the assessment order as erroneous as held in CIT vs. Amalgamation (238 ITR 963). The AO completely omitted the iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared that, for the purposes of this sub- Section,- (a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under section 120; (b) record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing officer contended that during the year under consideration, the assessee was doing business activity for dealing in shares and stocks. The only income and during the year under consideration was dividend on shares and mutual fund which it chargeable to tax under the head income from other sources . In reply to the applicability of explanation to section 73 of the act the assessee contended that section 73 is not applicable to the assessee company. The copies of reply of assessee dated 2 November 2011 and 5th November 2011(page No.6 to9 of PB) and the various details makes it clear that the assessing officer considered the factual matrix of the issue before passing the assessment order. Thus, from the record placed before us it cannot be said that the assessment was passed without application of mind and/or no question was raised by assessing officer regarding the loss shown by assessee. We may also not that the assessing officer has not referred his finding regarding the claim of loss, the manner in which it was substantiated by assessee in the assessment order. The revenue has not disputed the copies of replies placed before the assessing officer. Thus, from the contents ..... X X X X Extracts X X X X X X X X Extracts X X X X
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