TMI Blog2018 (7) TMI 1812X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 permissible When the entire evidence in support of the claim was available on the assessment record and the Assessing Officer has already examined the same, then the Pr. CIT directing a re-enquiry on the issue is not permissible U/s 263 of the Act. - Decided in favour of assessee. - ITA No. 444/JP/2018 - - - Dated:- 26-7-2018 - SHRI VIJAY PAL RAO, JM AND SHRI BHAGCHAND, AM For The Assessee : Shri S. L. Poddar (Adv.) And Miss Esha Kanungo (Adv.) For The Revenue : Shri Varinder Mehta (CIT) ORDER PER: VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the revision order passed U/s 263 of the IT Act dated 09.03.2018 of the ld. Pr. CIT for the assessment year 2013-14. The assessee has raised the fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available renders the order of the AO as erroneous and prejudicial to the interest of the Revenue. The assessee filed its reply on 28.02.2018 to the show cause notice issued U/s 263 of the Act and submitted that during the course of scrutiny assessment the AO raised the queries by issuing notice U/s 142(1) and the AO has specially asked the explanation and supporting evidence on the claim of exemption U/s 10(38) of the Act. In reply to the notice issued by the AO, the assessee submitted various documents which were again listed in the reply filed by the assessee to the show cause notice U/s 263 of the Act. Thus, the assessee contended before the ld. Pr. CIT that the documents filed by the assessee during the assessment proceedings were verified by the AO and thereafter AO allowed the claim of the assessee which is genuine and as per provisions of the law. The assessee also raised objections against the CIB (I CI) report and submitted that the alleged report mentioned in the show cause notice was not available at the time of completion of the assessment order. Thus, it was pleaded that the proceedings U/s 263 may be dropped. The ld. Pr. CIT did not accept the contention of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the broker through which transaction has been carried out, annual report of the company whose securities were sold during the relevant period, details of sale of securities along with mode of payments. Thus, the ld. AR has submitted that the Assessing Officer has called for all relevant materials and evidences in support of the claim of exemption U/s 10(38) of the Act. In response the assessee filed the relevant record as called by the AO which includes the bank statement highlighting the payment made by the assessee for purchase of the shares, contract note, D-mat account, details of stock exchange, STT paid and particulars of brokers. The ld. AR has referred to the copy of purchase bills of shares dated 01.02.2011, copy of receipt issued by M/s Chin Purni Sales Pvt. Ltd. dated 12.09.2011, copy of bank statement reflecting payment to M/s Chin Purni Sales Pvt. Ltd., copy of ledger account of Lambodar Nirmit Ltd. whose shares were purchased by the assessee. Subsequently the said company was merged with M/s Indian Info Tech and Software Ltd. The ld. AR has also referred ledger account of M/s Indian Info Tech and Software Ltd., copy of shares certificate, copy of share transfer ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . AR has submitted that the ld. Pr. CIT has invoked the provisions of Section 263 of the Act merely on suspicion whereas the AO had raised specific queries in regard to the relevant points involved in the assessment and the assessee had met those queries with supporting evidence which was accepted by the AO while completing the assessment U/s 143(3) of the Act. Therefore, even if the Assessing Officer without recording all the facts has accepted claim of exemption the assessment could not be set aside on the ground that no proper enquiry was made. In support of his contention, the ld. AR has relied upon the following decisions:- Krishnamurthy (V.G.) vs. CIT (1985) 152 ITR 683. CIT vs. Leisure Wear Exports Ltd. 202 taxmann 130. CIT vs. Vikas Polymers 194 Taxman 57. CIT vs. International Travel House Ltd. 194 taxman 324. CIT vs. Anil Kumar Sharma 194 taxman 504. CIT vs. Sun Bean Auto Ltd. 31 DTR 1. 4. On the other hand, the ld. DR has submitted that as per the explanation-2 of section 263 inserted from 01.06.2015 the order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interest of the Revenue if i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.) Details stock exchange in which the securities are register and details of STT has been charged. 4.) Complete address of the share broker and copy of your account in the books of the brokers through which the transaction has been accompanied. 5.) Annual reports of the company whose securities along with node of payments: Sales Note No. Date of sale Quantity sold Amount received mode of amount received Thus, on the issue of claim of long term capital gain exempt U/s 10(38) of the Income Tax Act, the AO called extensive details and supporting evidence from the assessee. In response the assessee produced all the relevant details the Assessing Officer accepted the claim of the assessee while passing the scrutiny assessment U/s 143(3) of the Act on 20.03.2016 though in the assessment order the AO has not discussed all the details of the issue as well as the verification and examination carried out by the AO. The AO has duly recorded in the assessment order that the assessee attended the assessment proceedings from time to time and furnish required details/information which were placed on record. During the assessment proceeding the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Copy of ledger A/c of Lambodar Nirmit Ltd. (Indian Info) Copy of ledger A/c of Indian Info Tech and Software Ltd. Purchase voucher of shares dated 01.02.2011 Money receipt from Chim Purni Sales Pvt. Ltd. Transfer of share in the name of the assessee Dematerialization request form Conversion certificate of share from Lamobdar Nirmit Ltd. to India Infotech and Software Ltd. Copy of d.mat account Copy of contract for sale of shares along with STT charges Copy of above documents are enclosed herewith along with copy of reply submitted to the learned Assessing officer. Therefore, it is clear from the above documents that the Learned Assessing Officer has verified all the documents and records and thereafter allowed the claim of the assessee which is genuine and as per provisions of the law. The Learned Assessing Officer has not committed any error and not his order is prejudicial to the interest of the revenue which is pre condition for taking action u/s 263 of the Income Tax Act, 1961. It appears that the alleged report mentioned in your notice was not on record at the time of completion of the assessment order. Therefore you ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approval of scheme of merger and consequently allotment of shares of M/s Indian Info Tech Software Ltd. in lieu the shares of M/s Lambodar Nirmit Ltd. held by the assessee. The said company M/s Indian Info Tech Software Ltd. was listed company at the stock exchange and consequently the shares allotted by M/s Indian Info Tech Software Ltd. were credited to the demat account of the assessee. The entire record and evidences were available before the Assessing Officer and after examination of the same, the AO accepted the claim of the assessee. Thus, once the AO has called for the relevant record and verified the same before allowing the claim of the assessee then the AO is not required to give detailed reasons in respect of each and every item of deduction in the assessment order. There is no dispute that the AO called for information and rather the relevant evidence from the assessee which was duly produced by the assessee and found available on the assessment record. Thus, once the enquiry, in fact, has been conducted and the AO has reached a particular conclusion, though reference to such enquiries has not been made in the order of the assessment, the revision of such order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the assessee, would put it that the CIT had travelled beyond what was stated in the notice. The hub of the matter is whether the manner in which the CIT has proceeded to exercise the jurisdiction under s. 263 of the Act is sustainable or not. As is discernible from the order, he has asked the AO to conduct an inquiry to verify the net commission transferred to P L a/c afresh. The CIT has remained totally oblivious of the fact that the AO had already examined this aspect but the CIT had thought to direct a re-inquiry for merely a change of opinion which is impermissible under s. 263 of the Act. In this context, we may refer to the decision in Gabriel India Ltd. (supra) wherein the CIT, after scrutiny of the order of the ITO, found that the order did not disclose application of mind and despite examining the matter at length and hearing the assessee could not come to a definite conclusion that the expenditure was not revenue expenditure but expenditure of capital nature. He referred the matter back to the ITO to examine the same and to decide afresh. The said action of the CIT was not approved by the Tribunal. In that background, the High Court of Bombay expressed the vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal and, accordingly, we give the stamp of approval to the same. Consequently, the appeal, being devoid of merit, stands dismissed without any order as to costs. Thus, when the entire evidence in support of the claim was available on the assessment record and the Assessing Officer has already examined the same, then the Pr. CIT directing a re-enquiry on the issue is not permissible U/s 263 of the Act. 6. Similar view has been taken in the various decisions as relied by the ld. AR. Further, when the evidence produce by the assessee has proved beyond doubt the transaction of purchase and sale of shares then the same cannot be held as bogus on the basis of DIT, Patna report. Though the issue of purchase price could have been questioned by the AO or the by the commissioner however, in absence of any material to show that the assessee has paid more than the purchase consideration which is claimed and shown in the record the transaction per se cannot be held as bogus even on such grounds. Even otherwise the issue of payment of purchase consideration over and above through banking channel can be matter of separate addition. Hence, in view of the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
