9911796707
TMI Blog2018 (7) TMI 1812X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Assessing Officer has not done verification regarding genuineness of the claim of the deduction u/s 10(38) of the Income Tax Act, 1961. 4. In the facts and circumstances of the case the learned Pr. CIT, Jaipur-I, Jaipur has erred in holding that the information dated 15.03.2016 dispatched from Patna was available with the Assessing Officer at the time of completion of the assessment on 20.03.2016. 5. The assessee craves your indulgence to add amend or alter all or any grounds of appeal before or at the time of hearing." 2. The brief facts leading to the controversy emerged from the record are that the assessee filed his return of income for the assessment year under consideration on 27.09.2013 declaring total income of Rs. 21,25,780/-. The AO completed scrutiny assessment U/s 143(3) on 20.03.2016 on the total income as return by the assessee. Thereafter the Pr. CIT on examination of assessment record noticed that the AO has carried out the scrutiny of return income only in relation to the exempt investment for disallowance U/s 14A of the Act and therefore, the AO has not conducted a proper enquiry regarding the claim of exemption U/s 10(38) of the IT Act in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation. It was also directed to consider the information received from the office of DIT, Patna dated 15.03.2018 regarding availing of accommodation entry by the assessee. Aggrieved by the impugned order of the ld. Pr. CIT the assessee has filed present appeal. 3. Before us, the ld. AR of the assessee has submitted the ld. Pr. CIT invoked the provisions of Section 263 of the Act on the basis of the information of CIB as well as the report of the Investigation Wing, Patna which were not available with the AO at the time of completion of the assessment. Therefore, subsequent reports of Investigation Wing, Patna would not render the order of the Assessing Officer erroneous and prejudicial to the interest of the Revenue when the AO during the scrutiny assessment called all the details relevant to the claim of exemption U/s 10(38) of the Act and the assessee produced all the supporting evidences for verification of the AO and after AO satisfied himself the claim of the assessee was allowed though the Assessing Officer has not discussed the issue in the assessment order. The ld. AR has referred to the notice U/s 142(1) of the Act dated 01.11.2015 issued by the AO and submitted that as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see reflecting credit entries of sale proceeds. Thus, the ld. AR has submitted that the assessee has produced all the supporting evidences right from the purchase bills, payment by the assessee through its bank account, receipt of purchase consideration, ledger account of the company of whose shares were allotted to the assessee, ledger account of M/s Indian Info Tech & Software Ltd., shares certificate, and share transfer certificate, shares ledger register, certificate of shares in the demat account of the assessee. Thereafter, when this company was merged with M/s Indian Info Tech & Software Ltd., the shares of Indian Info Tech & Software Ltd. were allotted to the assessee in lieu of the shares of M/s Lambodar Nirmit Ltd. which were also reflected in the demat account of the assessee. Finally the assessee sold the shares from its demate account through stock exchange which cannot be disputed. Thus, the ld. AR has submitted that holding of the assessee in the books of accounts as well as in demat account is clearly established from the record which can be independently verified as the demat account and sale of shares through stock exchange cannot be disputed. Hence, the ld. AR ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich should have been made in the opinion of the ld. Pr. CIT or Commissioner then, the order of the Assessing Officer is liable to be revised U/s 263 of the Act. The ld. DR has pointed out that the Commissioner found that the AO has not conducted the critical enquiry and nothing is on record to show that any verification of details to establish the genuineness of the claim as made by the assessee has been carried out by the Assessing Officer. The order of the Assessing officer is silent and the claim have been allowed without any discussion. Therefore, even if the assessee has filed the record if the order of the Assessing Officer is silent about the verification and examination of the issue then, it is erroneous so far as prejudicial to the interest of the Revenue. He has relied upon the impugned order of the ld. Pr. CIT. 5. We have considered the rival submissions as well as the relevant material on record. During the scrutiny assessment the AO issued a notice u/s 142(1) of the Income Tax Act dated 02.11.2015 asking the assessee to furnish in writing and verified in prescribed manner. The information called for is set out in notice and the AO raised as many as 15 queries. As per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered as a conclusive proof of holding the transactions of purchase and sale of shares as bogus when the assessee had produced all the relevant details and evidences in support of the transaction of purchase and sale of shares in question yielded capital gain which is exempt U/s 10(38) of the Act. In response to the show cause notice the assessee filed its reply dated 28.02.2018 which has been reproduced by the ld. Pr. CIT as under:- "Kindly refer to your show cause notice u/s 263 dated 12.02.2018. In this regard we would like to submit as under:- As alleged in your notice we had no information that the learned Assessing Officer had information regarding obtaining accommodation entry in the form of bogus long term capital aain to the tune of Rs. 3,20,00,200/- from sale of scrip namely Indian Infotech and Software Ltd. (INDI INFO). It appears that the letter appears to be dispatched from DGIT (Inv.) Patna on 15.03.2016 was dispatched from Patna after 15.03.2016 and it was not reached to Assessing Officer before completion of assessment order dated 20.03.2016. So the information was not available with the Learned Assessing Officer on the date of completion of the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows confirmation by the seller of the shares. The assessee recorded these transfer in its books of accounts. The assessee has also produced the share certificate which was originally in the name of M/s Chin Purni Sales Pvt. Ltd. from whom the assessee has purchased the shares in question and thereafter, shares were duly transferred in the name of the assessee as per the memorandum of transfer of shares dated 15.08.2011. This endorsement of transfer of shares in the name of the assessee is duly made on the back side of the shares certificate and therefore, the shares in question were transferred in the name of the assessee on 15.08.2011. Along with this endorsement share transfer was advice was also issued by M/s Lambodar Nirmit Ltd. dated 16.11.2011. Thus, it is clear that holding of the shares by the assessee as on 15.08.2011 cannot be disputed. The assessee then got the shares dematerialization in the demat account which again establishes the shares duly credited in the demat account of the assessee. Hence, in the month of August, 2011 all the formality of transfer of share in the name of the assessee as well as dematerialization of the shares were completed and on the said date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as given much importance and emphasis to the report of the DIT, Patna however, once the assessee has produced evidence which established the genuineness of the transaction being holding of shares by the assessee in the demat account and purchase of the shares against the consideration paid through banking channel then in the absence of bringing any contrary fact or disapproving the evidence produced by the assessee, the mere setting aside issue by the Pr. CIT for denovo consideration is not sustainable. Though Explanation-2 to Section 263 mandates a proper enquiry as the AO should have conducted however, even in the opinion of the Pr. CIT, the AO has not conduced a proper enquiry as it ought to have been once the AO has examined the relevant record in support of the claim of the assessee then, the Commissioner in the proceedings U/s 263 of the Act it also required to have conducted an enquiry to contradict evidence. In the absence of any efforts on the part of the Commissioner to cause a routine inquiry on the issue that has already been conducted by the AO, the order passed by the Pr. CIT merely setting aside the issue to the AO for conducting the denovo assessment is not permissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the CIT acting in a reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. The CIT cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity." 18. In Sirpur Paper Mills Ltd. vs. ITO (1978) 114 ITR 404 (AP), it has been held that the Department cannot be permitted to begin fresh litigation because of new views they entertain on facts or new versions which they present as to what should be the inference or proper inference either on the facts disclosed or the weight of the circumstances. 19. If the obtaining factual matrix is tested on the anvil of the aforesaid pronouncement of law, it is quite clear that the CIT has really made an effort to cause a routine inquiry with regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
