TMI Blog2018 (4) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... nt : Shri S.M. Surana, Advocate For The Respondent : Shri G. Hangshing, CIT-DR ORDER PER Waseem Ahmed, Accountant Member:- The assessee has filed this appeal disputing the order of Pr. Commissioner of Income Tax-15, Kolkata passed u/s 263 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) dated 22.03.2017 by which the Ld. Pr. CIT set aside the assessment order dated 02.03.2015 passed u/s 143(3) of the Act for Assessment Year 2012-13 with a direction to re-do the assessment in respect of issue therein. The ground raised by the assessee in the memo of appeal filed with the Tribunal read as under:- 1. That the Commissioner of Income-tax,Kolkata-15 is not justified set aside the assessment order for the assessment year 2012-13 dated 02.03.2015 passed by the ITO Ward-43(1), Kolkata is found to be erroneous and prejudicial to the interest of revenue on the ground that the allowability of loss in future option as an admissible business expenditure remained to be seen by the AO during the assessment proceedings although prime facie evidence against its allowability was there on record and AO has not made proper enquiry before completin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions in future option if carried out in recognizing stock exchange cannot be treated as speculative transactions. Therefore, the impugned loss cannot be treated as speculative loss and thus eligible for set off against income. However, Ld. Pr. CIT disregarded the contention of assessee and held the order of AO as erroneous in so far as prejudicial to the interest of revenue by observing as under:- I have carefully considered the issue with specific reference to the relevant assessment records and proposal u/s. 263 of the AO. The facts narrated above indicate that some aspects relating to allowability of loss in future option as an admissible business expenditure remained to be seen by the AO during the assessment proceeding although prima facie evidence against its allowability was there on record. The Assessing Officer has not made proper enquiry before completing assessment regarding this issue. By not checking the above issue and by not making adequate enquiry the Assessing Officer has not assessed the proper income and the order has become erroneous and prejudicial to the interest of the revenue. In view of the above, the order dated 02/03/2015 passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 38,4701/ - ) 14. It is clear from the above observations of the AO and the observations in para-3 of the order of assessment that he had taken due cognizance of all debit items in the profit and loss account, the tax audit report, the impounded documents, statement recorded during Survey and during assessment proceedings, books and accounts and other documents, bills, vouchers etc. 15. The CIT has exercised jurisdiction u/s.263 of the Act on the ground that the AO failed to make proper enquiry which he ought to have made before completing the assessment. There is a distinction between lack of enquiry and '' inadequate enquiry . If there is an enquiry, even inadequate, that would not by itself give occasion to the CIT to pass order under s. 263, merely because he has a different opinion in the matter. Such a course of action is open only in cases of lack of enquiry . Although apparently the assessment does not give any reasons why purchased were not being added as income, that by itself would not be indicative of the fact that the AO has not applied his mind to the issue. AO is not required to give detailed reason in respect of each and every item of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e between no enquiry and inadequate enquiry. In the case of no enquiry the ld. CIT would be right in involving his powers u/s. 263. But to Assessment Year an enquiry is inadequate enquiry the ld. CIT would have to show that the enquiry and the opinion formed on the basis of such enquiry is fallacious. This has not been done by the ld. CIT. under these circumstances, we are of the considered view that the inquiries done by the Assessing Officer cannot be said to be erroneous or specifically inadequate. The decision relied upon by the ld. DR in the case of Gee Vee Enteprises, a passed by the Hon'ble Delhi High Court, categorically held that the order becomes erroneous because such an inquiry has not been made and not because there is anything wrong with the order if all the facts stated therein are assumed to be correct. In the present case, it shows that inquiry was made, documents were called for examination and opinion had been formed by the Assessing Officer while passing the original assessment order on 30.06.2006. This has not been shown to be fallacious. In this situation, we are of the considered view that the order passed under section 263 is unsustainable in law in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In our view this is not at all permissible u/s. 263 of the Act. accordingly, we set aside the order passed by the ld. CIT u/s. 263 of the Act and decide the issue in favour of the assessee. On the other hand, Ld. DR vehemently relied on the order of Ld. Pr. CIT. 4. We have heard the rival contentions of both the parties and perused and carefully considered the material on record; including the judicial pronouncements cited and placed reliance upon. In the present case, the order of AO was held as erroneous in so far as prejudicial to the interest of Revenue on the ground that proper enquiry with regard to loss claimed by assessee in future option was not carried out by the AO. However, from the assessment order, we observe that necessary details for the loss in future option were duly supplied by assessee. The relevant extract of the assessment order is reproduced below:- During the year under consideration the assessee derived income from interest, director s remuneration dividend whereas suffered loss in future option and sale of shares. Details filed have been test checked. Fresh loans during the year have been verified. In regard to loss from currency ..... X X X X Extracts X X X X X X X X Extracts X X X X
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