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M/s. Jagmohan Kabra HUF Versus The Pr. CIT-31, Mumbai

2017 (8) TMI 529 - ITAT MUMBAI

Revision u/s 263 - adherence to time limit prescribed by the provisions - limitation period - the issue was under revision was not part of assessment u/s 143(3)/147 which was within 2 years - an addition was made u/s. 40A(3) on account of cash purchases from one of the three parties, that the assessment order also recorded the fact that there were no purchases from the other two parties - Held that:- the revisionary order of the CIT, was not passed within the time limit prescribed by the provisi .....

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pellate jurisdiction, could ignore the mandate of limitation provided under the Act. This was an issue which would fall within the domain of Parliament so as to make suitable amendment to the law after considering the various competing interests. - See CIT v/s M/s. Lark Chemicals Ltd.[2013 (9) TMI 959 - BOMBAY HIGH COURT] - Decided in favour of assessee. - I.T.A./3244/Mum/2017 - Dated:- 4-8-2017 - Rajendra, Accountant Member and C. N. Prasad, Judicial Member For The Revenue : Shri Alok Johri-DR .....

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O)completed the assessment u/s .143 (3) r.w.s.147 of the Act, on 09/02/ 2015, determining its income at ₹ 20,00,830/-. 2. On going through the assessment records, the PCIT noticed that during the year under considera -tion the assessee had taken unsecured loans of ₹ 20 lakhs from M/s. Aluwind Architectural Private Ltd.(AAPL), that assessee was having substantial shareholding of 25% in AAPL. Referring to the provisions of section 2 (22) (e) of the Act, he stated that same had to be tr .....

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ious case laws, including Malabar Industrial Co. Ltd(243ITR83)and the provi - sions of section 263, the CIT held that the assessee was owner of 25% shares in the company during the year under consideration, that transaction of ₹ 10.48 lakhs related to riches of aluminium bars, that the assessee was beneficial owner of the shares, that the company had accumulated profits and had advanced loan/deposits to the assessee, that the provisions of section 2(22)(e)were applicable, that the issue be .....

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he Act. 3. During the course of hearing before us, the Authorised Representative (AR) stated that order passed by the AO was neither erroneous not prejudicial to the interest of revenue, that the order passed by the CIT was barred by limitation. He relied upon the cases of Alagendra Finance Ltd. (293 ITR 1), Lark Chemicals Ltd. (368 ITR 655)and Ambuja Cement Ltd. (Writ petition number 2095 of 2006, dated 01/10/2014). He further argued that transaction entered in to by the assessee and AAPL was n .....

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had not considered the issue of regular assessment vis a vis 143(1)intimation. 4. We have heard the rival submissions and perused the material before us. Before proceeding further, in our opinion, we should deal with the jurisdictional issue. As per the provisions of section263(2) no order can be passed under sub-section (1) after the expiry of two years from the end of initially of in which the order sought to be revised was passed. In this case return was processed and an intimation u/s.143(1) .....

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a notice u/s.148 on the ground that the assessee had purchased imported goods and chemicals from three parties who were bogus and non-genuine. Besides, the unsecured loans in the name of the three parties were nongenuine. Consequent to this, the AO completed the assessment u/s. 143 (3) r.w.s.147 at a total income of ₹ 56.12 lakhs. The additions to the income included one u/s. 40A(3) on account of cash purchases from one of the three parties amounting to ₹ 1.25 crores. Thereafter, the .....

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at the assessment order also recorded the fact that there were no purchases from the other two parties, that the assessment order was not erroneous and the jurisdiction u/s. 263 could not be exercised. So far as the other issues were concerned, the Tribunal held that they were not issues adjudicated upon in the assessment order passed u/s. 143 (3)r.w.s.147 and that the CIT would have no jurisdiction to initiate proceeding u/s. 263 on those issues. Therefore, the Tribunal held that the jurisdicti .....

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n 263(2) provides that no order would be made in exercise of the jurisdiction u/s. 263(1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. Admittedly, the Commissioner had not exercised the revisional jurisdiction in respect of the intimation passed section 143(1) within two years of its being passed. Therefore, the exercise of the jurisdiction on those issues u/s. 263 was time barred. Moreover, the jurisdiction u/s. 263 could n .....

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