TMI Blog2022 (12) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... have not been controverted by the PCIT and it is settled proposition of law that for assumption of jurisdiction u/s. 263 of the Act the impugned assessment order should not only be erroneous but also pre judicial to the interest of the revenue. The error can be of facts or of law. On the given facts discussed here in above there is no error in facts and there is no error in law also. Variation in the opening stock, opening bank balance, opening capital - View of the PCIT is erroneous in as much as vide reply dated 16.10.2017 the assessee has given a detailed explanation in respect of stock valuation, sales turnover mismatch, mismatch in income/ capital gain/ on sale of land or building, increase in capital, tax credit mismatch alongwith copies of ledger accounts which have been duly examined by the AO before framing the Assessment Order u/s. 143 (3) of the Act. Exhibit 50 to 56 of the paper book clearly show that to the specific querry of the AO specific reply was furnished by the assessee. Thus we did not find any merit in the order of the PCIT. We, therefore, set aside the same and restore that of the AO framed u/s. 143 (3) of the Act. - Decided in favour of assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. This show cause notice is reproduced as under: On examination of the assessment records in your case for the AY 2015-16, it appears that the assessment order passed u/s143(3) on 22.12.2017 by the ITO, Ward 19(2), New Delhi is erroneous in so far as it is prejudicial to the interests of revenue due to the following reason: In this case, assessment u/s 143(3) of the Income Tax Act, 1961 was completed on 22.12.2017 at the total income of Rs.65,04,660/-. 3. Thereafter, following observations have been noted: a. That you have been paid interest of Rs.8,368/- u/s 244A on income tax refund issued for the A.Y.2012-13 during the F.Y.2014-15 relevant to A.Y.2015-16 which has not been offered for taxation. b. That you have claimed exempt income of Rs. 6,82,500/- u/s 10(38) on the sale of 1000 shares of M/s Flander Green Flied Pvt. Ltd. However, the exemption u/s 10(38) is available only when transaction is chargeable to STT. As M/s Flander Green Flied Pvt. Ltd. is a private limited company so the same is not listed on recognized Indian Stock Exchange and accordingly the transaction is chargeable to STT. Therefore, the income earned on such transaction is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue relates to claim of exempt income u/s. 10(38) of the Act which is, firstly, factually incorrect as infact the assessee has shown longterm capital loss of Rs.920658/- and secondly and most importantly as mentioned elsewhere the return was selected for limited scrutiny and the reasons are mentioned elsewhere and the claim of exemption is not one of the reasons for scrutiny selection of the return, therefore, this point is beyond the jurisdiction of PCIT as the AO could not have made any enquiry in respect of this issue as the same was not part of the limited scrutiny. 12. The next issue relates to the sale of 8 properties during the year under consideration to M/s. P.P. Syntex Pvt. Ltd. It has been categorically explained that the circle rate is not applicable on rights in the property without title as all the cost in flat in question were in the nature of booking amount for flats and the developer did not register the title in the flats of the assessee. 13. It is also made very clear that these properties need not have been registered as they were mere rights in the property without title, and there is no designated registering authority for these at the time of sale an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such a requirement has to be viewed in the context and circumstances of each given case. In the present case, it was repeatedly emphasized that the assessee's dividend income was confined to what it received from investment made in a sister concern, and that only one dividend warrant was received. Equally, there is no material to say that apart from that single dividend warrant, any other dividend income was received or that the assessee had to expend effort, or specially allocate resources to keep track of its investments, especially dividend yielding ones. In these circumstances, it can be said that whether the deduction under section 14A was warranted, was a debatable fact. In any event, even if it were not debatable, the error by the Assessing Officer is not 'unsustainable'. Possibly he could have taken another view; yet, that he did not do so, would not render his opinion an unsustainable one, warranting exercise of section 263. 19. Similarly the Hon ble Delhi High Court in the case of Brahma Centre Development (P) Ltd. 437 ITR 285 observed and held as under :- An assessment order can be revised under section 263 of the Income-tax Act, 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi High court in the case of DG Housing Projects Limited 343 ITR 329 which is very pertinent to the facts of the case in hand. 21. The relevant facts and the finding read as under :- A distinction must be drawn in the cases where the Assessing Officer does not conduct an enquiry ; as lack of enquiry by itself renders the order erroneous and prejudicial to the interests of the Revenue and cases where the Assessing Officer conducts an enquiry but the finding recorded is erroneous and which is also prejudicial to the interests of the Revenue. In the latter cases, the Commissioner has to examine the order or the decision taken by the Assessing Officer on the merits and then form an opinion on the merits that the order passed by the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. In the second set of cases, the Commissioner cannot direct the Assessing Officer to conduct further enquiry to verify and find out whether the order passed is erroneous or not. The assessee-company for the assessment year 2004-05 filed a return on declaring taxable income of Rs. 3,54,712. The assessee sold an immovable property during the relevant year and had cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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