TMI Blog2020 (2) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... - Shri Rajpal Yadav, Vice-President And Shri Waseem Ahmed, Accountant Member For the Assessee : Shri Sakar Sharma, AR For the Revenue : Shri Virendra Ojha, CIT-DR ORDER PER RAJPAL YADAV, VICE-PRESIDENT: Assessee is before the Tribunal against order of the ld.Pr.CIT-5, Ahmedabad dated 21.3.2016 passed under section 263 of the Income Tax Act, 1961 for the assessment year 2011-12. 2. Grounds of appeal taken by the assessee are not in consonance with the Rule 8 of the Income Tax (Appellate Tribunal) Rules, 1963 - they are descriptive and argumentative in nature. In brief, the grievance of the assessee is that the ld.Pr.CIT has erred in taking cognizance under section 263 of the Income tax Act, and thereafter setting aside the assessment order dated 24.12.2013 passed under section 143(3) for framing fresh assessment and investigating six issues entertained in 263-proceeidng. 3. Brief facts of the case are that the assessee has filed its return of income on 30.7.2011 declaring total income at ₹ 1,87,160/-. The case of the assessee was selected for scrutiny assessment, and assessment order was passed on 24.12.2013 under section 143(3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 67,397/-. The details of interest income were also not available on record. Further, the assessee had not claimed credit for the TDS deducted and deposited in his account by M/s. Dutta Developers Pvt. Ltd. Therefore, it was clear that the assessee had failed to disclose the interest income received from M/s. Dutta Developers Pvt. Ltd. The Assessing Officer failed to examine the taxability of the said income of ₹ 2,65,247/-, which made the assessment erroneous and prejudicial to the interests of the Revenue. (ii). During the year under consideration, the Assessee had sold an immovable property for a consideration of ₹ 9,21,27,000/- and after claiming indexed cost of acquisition of ₹ 1,75,97,250/- and expenses for sale of ₹ 15,24,500/-, the LTCG was worked out at ₹ 7,30,05,250/-. Out of the expenses of ₹ 15,24,500/- an amount of ₹ 15,00,000/- was claimed as Dastavej fees paid to Shri Vipin Shantilal Parikh on 06/01/2011. In support of this payment, the assessee had submitted a xerox copy of the receipt. On verification of the receipt it is noticed that no details of cheque No., bank name, etc. are available. Further, complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim, assessee had furnished xerox copy of the Term Deposit receipt dated 22.03.2011 with Bank of Baroda. From the copy of receipt, it appeared that the Assessee had made fixed deposit (term deposit) on 22/03/2011 for a period of one year and maturity date being on 22/03/2012. From the provisions of section 54F of the Act, it is clear that for claiming deduction u/s.54F(4) of the Act, the unutilized money is required to be deposited in an account specified for this purpose. Accordingly, the deposit of ₹ 2,36,00,000/- made in the Term Deposit with Bank of Baroda was not eligible for deduction u/s.54F of the Act. The AO failed to call for the requisite details for claiming the deduction u/s.54F(4) of the Act and had wrongly allowed the claim of deduction u/s.54F of the Act which made the assessment erroneous and prejudicial to the interests of the Revenue. (c) The Assessee had claimed exemption u/s.54EC of the Act of an amount of ₹ 1,00,00,000/- being amount invested in REC Bonds in support of which xerox copy of bank's acknowledgement slip was furnished. The AO had failed to call for the copy of the Bond issued by the issuing authority and verify the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh the record carefully. Section 263 of the Income Tax Act has direct bearing on the controversy, therefore, it is pertinent to take note of this section. It reads as under: 263(1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. [Explanation.- For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- (a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of the order passed by the Assessing Officer, he formed an opinion that such an order is erroneous in so far as it is prejudicial to the interests of the Revenue. By this stage the learned Commissioner was not required the assistance of the assessee. Thereafter the third stage would come. The learned Commissioner would issue a show cause notice pointing out the reasons for the formation of his belief that action u/s 263 is required on a particular order of the Assessing Officer. At this stage the opportunity to the assessee would be given. The learned Commissioner has to conduct an inquiry as he may deem fit. After hearing the assessee, he will pass the order. This is the 4th compartment of this section. The learned Commissioner may annul the order of the Assessing Officer. He may enhance the assessed income by modifying the order. At this stage, before considering the multi-fold contentions of the ld. Representatives, we deem it pertinent to take note of the fundamental tests propounded in various judgments relevant for judging the action of the CIT taken u/s 263. The ITAT in the case of Mrs. Khatiza S. Oomerbhoy Vs. ITO, Mumbai, 101 TTJ 1095, analyzed in detail various aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. In this questionnaire the ld.AO has called for information as per annexure attached to this questionnaire and copy of which placed on record on page no.108 of the paper book. It reads as under: You are requested to submit the following details for financial year 2010-11 relevant to Assessment Year 2011 -12. 1. Brief note on nature of the business/activities carried on during the under consideration. 2. A copy of return of income along with computation of income, balance sheet and profit and Loss account and tax Audit Report along with its Annexures, if applicable, for the A.Y. 2011-12 and copy of Balance-Sheet for year ended 31.03.2010. 3. Full address of all your business premises viz office, go-down, factory show room, shed, etc. which were used for the business activities. 4. Copy of capital account(s) and explanation for new capital introduced. 4. Please furnish details of all bank account and name of the Branch with / Account Number and shown balance as on 31/03/2011. 6. Please furnish the details of investment made during the year and its sources. 7. During the year under consideration if any transactions made by ..... 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