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TMI Blog2022 (11) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... f contention is the allegation of the PCIT that while framing the assessment order, the Assessing Officer has not enquired about the transaction entered into by the assessee, which resulted in capital gains and it was claimed as exempt u/s 10(38) of the Act, thereby making the assessment order not only erroneous but also prejudicial to the interest of the Revenue. 5. The PCIT served the following notice assuming jurisdiction u/s 263 of the Act: "M/s/Mr/Ms Subject: Notice for Hearing in respect of Revision proceedings u/s 263 of the INCOME TAX ACT, 1961 - Assessment Year 2015- 16. In this regard, a hearing in the matter is.fixed on 29/01/2021 at 03:15 PM. You are requested to attend in person or through an authorized representative to submit your representation, if any alongwith supporting documents/information in support of the issues involved (as mentioned below). If you wish that the Revision proceeding be concluded on the basis of your written submissions/representations filed in this office, on or before the said due date, then your personal attendance is not required. You also have the option to file your submission from the e-filing portal using the link: incometaxindi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of revenue. Hence, the order passed by the A.O. requires to set aside. You are hereby given the opportunity of being heard and show cause as to why the impugned order be not enhanced/modified or set-aside for fresh assessment u/s 263 of the I.T Act 1961. The case is fixed for hearing on 29.01.2021 at 03:15 PM." 6. A perusal of the aforementioned notice shows that the PCIT has alleged that the assessee has shown sale of shares of CCL International Ltd. on which the assessee has claimed short term capital gain of Rs. 7.26 lakhs wherein the price of shares jumped by more than 600% [approx.] in a short span of period of nine months. 7. We find that the notice u/s 142(1) of the Act dated 05.09.2017 was issued and served upon the assessee to which, on 22.09.2017, the assessee filed a detailed reply submitting copy of return of income, copy of computation of income, copy of bank statement of Corporation Bank alongwith TDS details as per Form No. 26AS. 8. Second notice dated 11.10.2017 was issued alongwith the following questionnaire : "REQUREMENT LIST Provide the following information & documents:- 1. Statement indicating the narrations of debit & credit entries of Rs. 2 lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance India.Ltd 221657 Less: Purchase cost 2000 219657 B. Sale Proceeds of 700 shares of Intec Capital Ltd 73848 Less: Purchase cost 7000 66484 LONG TERM CAPITAL GAIN 286141 11. The statement of Affairs as on 31.03.2014 was also furnished, which is as under: 4975066 Fixed Assets 25% share in Shop No.254 GIP NOIDA 1640512 Plot at Model Town Rudrapur Uttrakand 1756700 Other assets SHARES Swastik Solvent Products (India) Limited-Unquoted 494000 Shares-Quoted 315370 Advance agst shares-Geonka Business and Finance Ltd 50000 Trisha Media Ltd ' 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 Industrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 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. The Hon'ble Bombay High Court in the case of Gabriel India Ltd 203 ITR 108 has held as under: "The power of suo motu revision under subsection (1) is in the nature of supe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 incomplete interpretation a lesser tax than what was just has been imposed. We, therefore, hold that in order to exercise power under sub-section (1) of section 263 of the Act there must b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct 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. Considering the facts of the case in hand, in totality, in light of the judicial decisions discussed hereinabove, we set aside the assessment order of the PCIT dated 22.03.2021 and restore that of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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