TMI Blog2022 (11) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... (9) TMI 633 - DELHI HIGH COURT] has held that the Assessing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Whether there was application of mind before allowing the expenditure in question has to be seen. If there was any inquiry, even inadequate, that would not by itself give occasion to the CIT to pass orders under section 263 of the Act, merely because he has different opinion in the matter. In the case of Anil Kumar Sharma [ 2010 (2) TMI 75 - DELHI HIGH COURT] has held that there is a distinction between lack of enquiry and inadequate enquiry If there was any enquiry, even inadequate, that would not by itself give occasion to the Commissioner to pass orders u/s 263 of the Act. Appeal of assessee allowed. - ITA No. 708/DEL/2021 - - - Dated:- 21-11-2022 - Shri N.K. Billaiya, Accountant Member, And Shri Kul Bharat, Judicial Member For the Assessee : Shri Manish Kumar, Adv. For the Department : Shri M. Baranwal, CIT- DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- This appeal by the assessee is preferred against the order of the ld. Pr. CIT(A), Delhi 10 dated 22.03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. In the review, it is found that the assessment order passed u/s 143(3) of the Act by the Assessing Officer for the A.Y. 2015-16, dated 13.11.2017 is erroneous in so far as it is prejudicial to the interest of revenue. 4. In the return, you have shown sale of shares of CCL International Ltd. On examination of the assessment records and details furnished, it has been observed that, one of the issues of scrutiny was Penny Stock - Tab in ITS . It is seen from the submissions made during the assessment proceedings that you have claimed Short Term Capital Gain of Rs.7,26,000/- on sale of 2000 shares at Rs. 418/- each which were purchased at Rs.55/- per share. The price of the shares jumped by more than 600% (approx.) in a short span of period of nine months. 5. Holding period is also less and intention is to make quick money from purchase and sale of large number of shares over a relatively shorter period of time. This is a clear case of Penny Stock. The reason for scrutiny was Suspicious Sale Transaction in Shares and the AO had failed to verify the same and did not conduct any enquiry. No justification was provided regarding such sudden rise in the value of share. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t term long terms capital gains have been computed shown in your ITR. 6. Copy of rent agreement in connection with the income shown under the head Income from House Property 7. Statement of Affairs as on 31.03.2014 31.03.2015. 8. Note on house hold drawings 9. The said was replied by the assessee vide letter dated 17.10.2017 as under: The assessee has received your notice dated 11.10.2017 ii/s 142(1) for the above assessment year fixing the case for today. We have been directed to submit some of the following details as required 1 .Copy of Bank statement showing the debit and credit entries more than Rs.2 lakhs 2.Copy of Demat Account as on 30.03.2015 3 .Copy of contracts in respect of sale of shares of the brokers 4. The assessee is doing the commodity transactions and the profit earned and shown under Business Income. The detail statement is attached with the copies of accounts of the parties with whom transaction have been done 5. Scrip wise details regarding purchase and sale of shares on which short term and long term capital gains have been received is attached. 6. Copy of the rent Agreement 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50000 CCL, International Ltd 110000 Balance with S B A/c Corporation 54384 Bank G K II, New Delhi 15000 Cash in Hand 4975066 12. After perusing the aforementioned details, the Assessing Officer further made enquiries by issuing notice dated 25.102017 and requiring the assessee to furnish the following details: S.No Name of Share Date of Sale Quantity Amount 1.) CCL International Ltd. 07/08/14 2,000 8,36,000 2.) Reliance Industries Ltd. 06/06/14 200 2,21,657 3.) Intec Capital Ltd. 10/12/14 700 73,848 13. The requisite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Page 41 observed that the assessee has entered into a transaction which resulted into capital gains of Rs. 7.26 lakhs, which was claimed as exempt u/s 10(38) of the Act. 16. This very allegation of the PCIT is factually incorrect as the assessee has not claimed any exemption u/s 10(38) of the Act for Rs. 7.26 lakhs but the same was returned as short term capital gains as is evident from the revised computation of income exhibited at Page 18 of the Paper Book. 17. Considering the facts of the case in totality, we are of the considered view that the Assessing Officer had made specific enquiries during the assessment proceedings to which specific reply was furnished by the assessee alongwith supporting documentary evidences and all such evidences were duly examined and considered by the Assessing Officer before completing the assessment proceedings u/s 143(3) of the Act. 18. In our considered view, the power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry as held by the Hon'ble High Court of Bombay in the case of CIT vs. Nirav Modi, [2016] 71 Taxmann.com 272 (Bombay). 19. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at conclusion and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion. It may be said in such a case that in the opinion of the Commissioner the order in question is prejudicial to the interests of the Revenue. But that by itself will not be enough to vest the Commissioner with the power of suo motu revision because the first requirement, viz., that the order is erroneous, is absent. Similarly, if an order is erroneous but not prejudicial to the interests of the Revenue, then also the power of suo motu revision cannot be exercised. Any and every erroneous order cannot be the subject-matter of revision because the second requirement also must be fulfilled. There must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statuteon an incorrect or incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture but an expenditure of capital nature. He simply asked the Incometax Officer to re-examine the matter. That, in our opinion, is not permissible. Hence the provisions of section 263 of the Act were not applicable to the instant case and, therefore, the commissioner was not justified in setting aside the assessment order. 20. We find that the Hon'ble Delhi High Court in the case of CIT Vs Sunbeam Auto reported in 332 ITR 167 has held that the Assessing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Whether there was application of mind before allowing the expenditure in question has to be seen. If there was any inquiry, even inadequate, that would not by itself give occasion to the CIT to pass orders under section 263 of the Act, merely because he has different opinion in the matter. 21. The Hon'ble Delhi High Court in the case of Anil Kumar Sharma 335 ITR 83 has held that there is a distinction between lack of enquiry and inadequate enquiry If there was any enquiry, even inadequate, that would not by itself give occasion to the Commissioner to pass orders u/s 263 of the Act. 22. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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