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Golden Tobacco Ltd. (formerly known as GTC Industries Ltd.) Versus The Asstt. Commissioner of Income­-tax 8 (1) , Mumbai ­

2017 (9) TMI 1039 - BOMBAY HIGH COURT

Scope of revision u/s 263 - order erroneous and prejudicial to the interest of Revenue - Held that:- Without commenting in any manner and concluding that the invocation of the power was justified, the Tribunal has disposed of the matter. In a way it has made a short shrift or resorted to a shortcut. We do not think that this is a satisfactory way of deciding appeals and as a last fact finding authority. It was incumbent on the Tribunal to have gone into the facts and circumstances and equally th .....

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Act of the assessment order was called for? - (B) Whether, on the facts and in the circumstances of the case, and in law, the revision order passed by the Respondent under section 263 of the Income Tax Act, 1961 was bad, illegal and without jurisdiction?” - Income Tax Appeal No. 245 of 2015 - Dated:- 12-9-2017 - S.C. DHARMADHIKARI & PRAKASH D. NAIK, JJ. Mr. Jitendra Jain with Mr. Sameer Dalal for the Appellant. Mr. Arvind Pinto for the Respondent. P.C: 1. The assessee/appellant is aggrie .....

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ant/assessee and Mr. Pinto, appearing for the respondent/Revenue. 4. The appellant claims that it had right to occupy residential units in a holiday resort at Goa. The appellant-company in order to further its business prospects promoted a holiday scheme. The scheme envisaged payment of initial lump-sum amount by the purchaser towards purchase of a Unit Week and in lieu of which the purchaser was entitled to occupy a residential unit in the resort for a specified week every year. This right coul .....

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t was selected for scrutiny assessment and during the course of which the Assessing Officer addressed a letter dated 17.2.2006 to the appellant to show cause as to why its claim should not be disallowed. A reply was filed on 7.3.2006 (Exhibit-B) and after considering the same, a detailed order was passed dealing with the issue in the assessment proceedings. 5. Once again, for the Assessment Year 2004-05, the case of the appellant was selected for scrutiny. After examining the details of income a .....

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proposing to revise the assessment order passed by the Assessing Officer as, according to him, he had failed to make the necessary inquiries while allowing the appellant's claim for depreciation and also while allowing its claim pertaining to diminution in the value of shares. 7. This was for the Assessment Year 2004-05 and the notice dated 6.3.2009 was replied. However, the Commissioner of Income Tax passed an order on 26.3.2009 invoking Section 263, aggrieved by which the matter was carri .....

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ioning the invocation of Section 263 but the manner in which the power thereunder has been exercised. Therefore, the Tribunal mistook the matter at the initial stage as containing a very limited request. It, therefore, disposed of the main appeal in a short but cryptic order without adverting to the basic and fundamental issue raised for its consideration. 10. Mr. Jain invited our attention to para 5 of the Tribunal's order, running page 153, and which is impugned in this appeal. Thereafter, .....

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the facts and circumstances of this case as to whether the Commissioner could have arrived at the conclusion that the order passed by the Assessing Officer is erroneous insofar as it is prejudicial to the interest of the Revenue. It was the invocation of that provision and the exercise of power thereunder which was faulted, according to Mr. Jain and throughout. In such circumstances, the Tribunal's order is vitiated by total non-application of mind and can be safely termed as perverse as we .....

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e rival contentions and perusing the order under challenge, we are of the firm opinion that the Tribunal was, firstly, required to consider as to whether the ingredients of Section 263 are at all attracted and satisfied in the facts and circumstances of the present case enabling the Principal Commissioner/Commissioner to step in. If the preconditions of the said provision are not at all fulfilled, then, whether the Commissioner was still justified in stepping in, was, therefore to say, the prime .....

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