TMI Blog2021 (7) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... ew that the reason for invocation of revisionary power by the ld.CIT is obvious and specific because there is an inherent lack of examination/verification of the record at the end of the AO while finalizing the assessment. On one hand,AO is treating the alleged loan deposits as non-genuine and adding the same to the income under section 68 of the Act, but on other hand, without proper verification, allowed the interest payment allegedly made to the loan depositors, that would render the assessment order erroneous and prejudicial to the interest of the Revenue. Interest paid to creditors against unsecured loans is allowable only when loan deposited by the creditor with the assessee are established. Therefore, the conclusion of the AO whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received unsecured loans from companies from Kolkata, Mumbai, Thane, Surat and Kerala etc. for ₹ 49,93,00,000/-. The assessee was asked to explain the genuineness of the loan transactions, identity and creditworthiness of the loan creditors. Assessee explained that all the loans were taken through banking channel, names and address and PANs of all the parties were mentioned in form no.3CD report, and therefore, the addition proposed did not come under the purview of section 68 of the Act. The ld.AO did not satisfy with explanation of the assessee, and held that since the assessee has not proved three limbs of provisions viz. identify of the depositors, genuineness of the transactions and credit-worthiness of the depositors, he tre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d assessment order, and therefore no room for the ld.CIT to exercise his power under section 263 and direct the AO to revise the assessment order in accordance with his finding in the impugned order. On the other hand, the ld.DR supported the impugned order. 5. We have considered rival submissions and gone through the records 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the Supreme Court. Explanation.- In computing the period of limitation for the purposes of sub-section (2), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. 7. A perusal of order of the AO and the impugned order of the ld.CIT, would certainly make out a prime facie case in favour of the ld.Commissioner, as the AO has not applied his mind nor he enquired into the issue and verified/examined the record of the case properly. We find that the factum of addition made by the AO under section 68 of the Act on the loan taken by the assessee treating the same as unexplained and non-genuine has not been disputed before us by the assessee, nor the issue of addi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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