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TMI Blog2022 (4) TMI 1175X X X X Extracts X X X X X X X X Extracts X X X X ..... E LTD are based on incorrect assumption as all the relevant details have been verified by the Ld. Assessing officer at the time of assessment proceeding and direction issued for fresh assessment are nothing but change of opinion which is not permissible under the proceeding initiated u/s. 263, therefore, the order passed under section 263 of the Act is illegal and void ab-initio. 4. That, on the facts and in the circumstances of the case and in law, the learned Ld. Principal Commissioner of Income Tax-1, Bhubaneswar erred in invoking jurisdiction under Section 263 and setting aside the assessment order u/s. 143(3) of the Act for reviewing and re-examining the facts, details, documents, evidences already examined by the learned AO, who had already made judgment based on the same and had passed the order of assessment under section 143(3) of the Act. It is well settled that revision cannot be undertaken for re-examining and directing fresh inquiry due to change of opinion." 2. Facts of the case are that the assessee was engaged in trading in commodities like Aluminium, Soyabean and Copper through Karvy Comtrade Ltd. The assessee filed the return of income declaring total income at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave carefully considered the submissions thus made. The ITR copies of Sri Mundra for AY 2015-16 and 2016-17 has also been filed, which shows gross receipts of Rs. 4,50,172/- and investment/exp under Chap VIA of Rs. 1,05,126/- for AY 2015-16, not quite sufficient to explain a loan of Rs. 14.50 lakh extended to the assessee. The account copy also shows that the purported advance/loan is interest free. As regards the assessee has shown only Rs. 1,16,114/- as Gross total income in his ITR for AY 2016-17. His monthly salary is seen to be around Rs. 12,530/- only, increased to Rs. 15,821/-. An amount from Mr. T.K. Parida for Rs. 20,00,000 is seen to have been credited to this account on 15/5/2015. The bank account (Axis Bank account No. 910010025330761 Customer No. ] 835480247) also shows deposit by cash of Rs. 2,00,000 on 7/5/2015 etc. 7.1 Thus, the assessee has to explain the deposit of Rs. 20 lakh taken during the year from Mr. T K Parida for which no proof of identity, creditworthiness or genuineness has been furnished. The opening balance of Rs. 14.5 lakh shown to be a loan from Mr. Mundra also needs further examination as to source etc. The source of cash deposit of Rs. 2 lak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. The phrase prejudicial to the interests of the revenue is not an expression of art and is not defined in the Act. Understood in its ordinary meaning it is of wide import and is not confined to loss of Recently, the Hon'ble Apex Court in the case of Denial Merchants Pvt. Ltd. vs ITO in Special Leave (C) No. (s) 23976/2017 and others order dated 29.11.2017 has upheld the judgement of Hon'ble Calcutta High Court passed on 10.4.2017 in G.A. No. 599/2016, dismissing the special leave petition observing that the CIT after setting aside the order of the Assessing Officer, simply directed the Assessing Officer to carry thorough and detailed enquiry. Moreover, the ITAT, Cuttack Bench, Cuttack, has upheld action u/s. 263 in the case of Cuttack Development Authority v. CIT, Cuttack in IT A No. 381/CTK/2014 on the same ground of failure to conduct further enquiries where circumstances deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.R. further submitted that even for the sake of arguments, it is presumed that but not admitted or accepted that the AO has not property verified the issues, then the Pr. CIT has to make enquiry himself and he cannot direct the AO to redo the enquiry. 8. Placing reliance of the decision of ITAT Cuttack in the case of Sangram Keshari Samantaray vs Pr. CIT in ITYA No. 12/CTK/2010 order dated 28.10.2021, ld. A.R. submitted that when the source of finance stated in the audited accounts produced before the AO, then it is not a case of inadequate enquiry and in such situation, the Pr. CIT has to verify himself to record the finding that the assessment order is erroneous when the assessee produced all the details before him. Ld A.R. submitted that the Pr. CIT in the impugned order has relied on the decision of Hon'ble Kolkata High Court in the case of Denial Merchant Pvt. Ltd. Vs ITO, dated 10.4.2017 which is not binding precedent to apply in the case of the assessee as SLP dismissal is not a declaration of law within the meaning of Article 141 of the Constitution of India as held by Hon'ble Supreme Court in the case of Khoday Distilleries Ltd. vs Sri Mahadeswara Sahakara Sakka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, it is not a case of no enquiry or inadequate enquiry and thus, the assessment order cannot be alleged as erroneous and prejudicial to the interest of the revenue. In support of this contention, ld. A.R. relied on the following decisions: i) ITO vs DG Housing Projects Ltd., 343 ITR 329 (Delhi) ii) DIT vs Jyoti Foundation, 357 ITR 388 (Delhi) iii) Surekha Builders & Developers Pvt. Ltd. vs Pr. CIT in ITA No. 207/CTK/2018 order dated 17.7.2020 (Cuttack TIAT) 10. Replying to above, ld. CIT DR supported the order of the Pr. CIT. He submitted that the Assessing Officer has not verified the bank statements to ascertain the payments made to Karvy Comtrade ltd., towards the loss incurred by the assessee. He also submitted that the genuineness of the loan amount was not verified by the AO before completing the assessment. Ld CIT DR submitted that the assessee is an employee with Gupta Cables Pvt. Ltd., and as per return of income, he has declared salary income of Rs. 1,64,114/-. Ld CIT DR further submitted that the bank statements were never filed before the AO and the genuineness of the loan was also not verified by the AO. Ld CIT DR further drawing our attention to page 6.2 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue authorities. Ld AR vehemently pointed out that when the outstanding amount of loan remained unpaid during the year and the amount of Rs. 14,50,000/- was brought forward from immediately preceding year to the present year i.e. 2016-17 pertains to loan from Brij Mohan Mundra, then no action can be taken against the assessee as the AO has taken the plausible view regarding the loan taken by the assessee. Therefore, the assessment order cannot be alleged as erroneous and prejudicial to the interest of the revenue. Ld A.R, submitted that the decisions of Hon'ble Delhi High Court in the case of DG Housing Project and Jyoti Foundation (supra) are applicable to the case of the assessee in addition to the decision of ITAT Cuttack in the case of Surekha Builders & Developers Pvt. Ltd., (supra) because in a situation when the AO has made enquiries in respect of the issues, agitated by the Pr. CIT and in the notice u/s. 263 of the Act, Pr. CIT alleges that there is inadequate and insufficient enquiry, then, he should have made further enquiries and he is not empowered to simply restore the issue to the AO for further enquiries and verification. He further submitted that in the present c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the same which cannot be held as unverifiable and unsustainable view. From careful reading of assessment order, we observe that the AO has issued notice u/s. 142(1) of the Act on 4.10.2018 and another notice dated 26.10.2018, in response to which, the assessee through e-proceedings submitted all the relevant details out of which the AO adjudicated three points viz (i) the assessee was doing trading in commodity futures at MCX Platform (ii) during the impugned assessment year, the assessee has transacted through karvy Commodities broking through his client code 800904 and (iii) the AO has considered total volume of transaction undertaken by the assessee during the relevant period. From the copy of the reply of the assessee to notice u/s. 263(1) of the Act, which is available at pages 3 to 20 of APB, it is clear that the assessee submitted copy of income tax return for assessment year 2016-17, bank statement for F.Y. 2015-16, substantiating the payment made to Karvy Comtrade Ltd., reconciliation statement with Karvy comtrade ltd., bank statement, ITRs and PAN of loan creditor Mr. Brij Mohan Mundra with opening balance of Rs. 14,50,000/- which also remains same at the year end, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement clearly reveals that the amount received from this creditor has been credited to the account of the assessee and immediately refunded and, therefore, there was no cash transaction or cash deposit. 16. So far as second creditor Shri Tushar Kant Parida is concerned, the assessee has submitted at pages 28 to 30 of APB, PAN card, confirmation of account with Axis Bank account statement for the period 1.4.2015 to 31.3.2016, the assessee has received Rs. 20 lakhs on 9.4.2015 from Hariom Vanijya and this amount was given to the assessee on 15.5.2015. Therefore, these documentary evidences could not be doubted and discarded at the threshold without bringing any material on record to show any discrepancy and deficiency therein. 17. From the careful reading of the impugned order of Pr. CIT u/s. 263 of the Act, we clearly observe that the Pr. CIT in para 6 of the order has noted that the ld. A.R. of the assessee filed reply on 11.3.2021. He also noted that the additional explanation of the assessee and on the next date of hearing on 15.3.2021, he also taken on record the reply of the assessee. In para 7.1, Pr. CIT noted that no proof of identity, creditworthiness or genuineness has b ..... 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