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Pr. Commissioner of Income Tax -6 Versus Modicare Limited

2017 (9) TMI 1238 - DELHI HIGH COURT

Revision u/s 263 - non-genuine commission payment and no expenditure was incurred by the Assessee to receive the above commission - Held that:- the order of the CIT does not conform to the legal requirements of Section 263 of the Act. It was not enough for the CIT to reproduce the SCN, the reply thereto and give the conclusion. The impugned order of the CIT gives no reasons for the conclusion that the assessment order of the AO was erroneous and prejudicial to the interests of the Revenue. - .....

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he interest of the Revenue. - Decided in favour of assessee. - ITA No. 759/2016 - Dated:- 14-9-2017 - S. Muralidhar And Prathiba M. Singh, JJ. For the Appellant : Mr. Rahul Chaudhary, Senior standing counsel For the Respondent : Ms. Kavita Jha, Advocate ORDER 1. This appeal under Section 260A of the Income Tax Act, 1961 ( Act ) filed by the Revenue is directed against the impugned order dated 19th April 2016 passed by the Income Tax Appellate Tribunal ( ITAT ) in ITA No. 3007/Del/2014 for the As .....

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r 2009, declaring income as Nil. The Assessee, being a listed company engaged in the business of marketing of household products, declared dividend income of ₹ 14,51,289/- which was exempt from tax. The Assessee had not made any disallowance in relation to such income under Section 14A of the Act. 4. After picking up the Assessee s return for scrutiny, the AO completed the assessment under Section 143 (3) of the Act making a disallowance of ₹ 3,23,475/- under Section 14A of the Act. .....

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Assessee was detected as non-genuine commission payment. It was further alleged in the SCN that since no expenditure was incurred by the Assessee to receive the above commission, the above amount ought to have been included in the taxable income and disclosed by the Assessee. Consequently, the Assessee was asked to show cause as to why an order under Section 263 of the Act should not be passed to set aside the assessment order and the matter remanded to the AO for a fresh assessment. 6. The CIT, .....

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the assessee to be given to him for detailed reply after due verification. It is observed that request of the assessee is valid and may be acceded to. Accordingly A.O. is directed to provide the details of the facts on the basis of which 263, proceedings have been initiated and then verify the reply of the assessee on the same issue. In view of the above, Order dated 31.10.2011 passed u/s 143(3) of the I.T. Act is set aside u/s 263 of the I.T. Act with the specific direction to the A.O to provi .....

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order in the appeal filed by the Assessee on the ground that Section 263 of the Act is to be invoked not as a jurisdictional corrective or as a review of a subordinate s order in exercise of supervisory power, but is to be invoked and employed only for setting right distortions and prejudices to the Revenue, which is a unique conception which is to be understood in the context of and in the interests of the Revenue. 8. Mr. Rahul Chaudhary, learned Senior Standing Counsel for the Revenue, took ex .....

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