TMI Blog2019 (8) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the Hon'ble Jurisdictional High Court in the case of CIT vs. Gabriel India Ltd. [ 1993 (4) TMI 55 - BOMBAY HIGH COURT] held that there must be material before the Commissioner to satisfy himself that two requisites provided u/s. 263 are present, otherwise power cannot be exercised at the whims and caprice of the Commissioner. It is not permitted u/s 263 of the Act to substitute the judgment of the Commissioner for that of Assessing Officer unless the conditions stipulated therein are satisfied. The order of the Assessing Officer cannot be termed as erroneous simply because Commissioner does not agree with the conclusion drawn by the Assessing Officer. In another case from Hon'ble Jurisdictional High Court in CIT vs. Development Credit Bank Limited [ 2010 (2) TMI 161 - BOMBAY HIGH COURT] , in a similar situation, wherein assessment order was passed after considering all details called for and furnished by the assesses, the Commissioner invoked revisional jurisdiction on the ground that enquiry was not conducted; and the Hon'ble High Court held that the Commissioner was not justified in invoking the revisional jurisdiction. In view of the above discussion, the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noticed that accumulated profits of the NGEPL as on 31.03.2009 was ₹ 7,25,30,011/- and NGEPL was not a company in which public was substantially interested and, hence, Assessing Officer should have treated the entire loan/ advances received by the assessee from the said company to the extent of accumulated profits as deemed dividend u/s 2(22)(e) of the Act. Whereas, according to the Commissioner, only part addition was made in the assessment order dated 30.12.2011 (supra). 3. In reply to the show cause notice, the assessee resisted the action of the Commissioner and, interalia, furnished written submissions dated 17.12.2013. The appellant company resisted the action of the Commissioner both on the point of jurisdiction as well as on the merits of the issue. In paras 2 (I) and (II) of his order, the Commissioner has briefly noted the submissions put-forth by the assessee. However, the Commissioner was not satisfied with the submissions put-forth and held that the requisite conditions prescribed for invoking section 263 of the Act were fulfilled in the present case and he, directed the Assessing Officer to enhance the addition under section 2(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hile passing the impugned order. The fact that the assessment order itself does not contain any discussion with regard to the balance amount of expenditure of ₹ 1.76 crores i.e. ₹ 2.94 crores less ₹ 17.98 lakhs claimed as revenue expenditure would not by itself indicate non application of mind to this issue by the AO in view of specific queries made during the assessment proceedings and the Respondent-assessee's response to it. In fact this Court in the case of Idea Cellular Ltd. v. Dy. CIT [2008] 301 ITR 407 has held that if a query is raised during assessment proceedings and responded to by the Assessee, the mere fact that it is not dealt with in the Assessment Order would not lead to a conclusion that no mind had been applied to it. 9. Moreover, from the nature of expenditure as explained by the petitioner to the AO during the assessment proceedings itself indicates that the view that the same were in the realm of revenue expenditure, is a possible view. Therefore, we find no fault in the impugned order having followed the binding decision of the Supreme Court in the case of Max India Ltd. (supra), while allowing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id conditions is absent in a given case, then invoking of section 263 of the Act would be untenable in law. In this background, we may now examine the manner in which the Commissioner has dealt with the conditions prescribed u/s. 263 of the Act in his order. The relevant discussion is contained at page 4 5 of his order, which reads asunder: The submissions of the assessee have been duly considered. He has made an alternative submissions. The same are being dealt with as under:- Submission No. 1: The assessee has given the computation of the possible maximum addition u/s. 2 (22) (e) at page No.11 of the paper book. After adjusting opening balance of earlier year and the credit balances, the amount of deemed dividend has been computed by assessee at ₹ 2,80,04,713/-. After adjusting the addition of ₹ 2,30,33,450/- already made by the AO, the balance addition has been worked at ₹ 49,71,263/-. I agree with the manner of computation made by the learned AR of the assessee. The opening balance coming from earlier year cannot be added during the assessment year under consideration. Further, any amount paid by the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is submission of learned AR of the assessee is also not acceptable as the issue before the CIT(A) was limited to the addition of ₹ 2,30,33,450/- and the present revision proceeding was initiated for addition beyond the said sum of ₹ 2,30,33,450/-. To sum up, the AO is directed to enhance the addition made u/s. 2(22)(e) by ₹ 49,71,263/- after verifying the facts arithmetical calculation given by the assessee at page no.11 of the paper book. 7. Ostensibly, the Commissioner concludes that the Assessing Officer had not taken one of the possible views but he had made the addition of the smaller amount in contradiction to the conclusion made by himself that the transactions of the assessee falls within the mischief of section 2(22)(e) of the Act, resulting in prejudice caused to the Revenue. At this juncture, it is important to refer to the manner in which the Assessing Officer dealt with the issue after arriving at a conclusion that transactions were hit by the provisions of section 2(22)(e) of the Act. The relevant para of the assessment order is reproduced hereunder: The accumulated profits of NGEPL at year e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he balance amount. Thus, Assessing Officer has a possible view. 9. Per contra, the ld. DR relied upon the observation in the order passed u/s 263 of the Act to state that the Assessing Officer has not accepted anywhere in the assessment order that the loans/advances taken from the said company were utilized in the normal course of business. Though the assessee had made submission in this regard, the Assessing Officer had not accepted the same. As the quantum of addition made by him was not in accordance with the conclusion made by him and also the provision of law, the assessment order passed by him was definitely erroneous and prejudicial to the interest of Revenue, as per the Ld.DR. 10. On the other hand, the assessee relied upon the decision of Hon ble Jurisdictional High Court in the case of CIT vs. Fine Jewellery (India) Ltd. for the proportion that the fact that the assessment order itself does not contain any discussion would not by itself indicate non application of mind on the issue by the Assessing Officer if specific queries were made during the assessment proceedings and the assessee responded to the same. 11. We find t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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