TMI Blog2023 (8) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... f exercise of revisional jurisdiction. CIT was expected to cite specific error in the inquiry conducted by the learned AO to conclude that there was lack of inquiry on the issue at the stage of scrutiny assessment. The assessee has given a detailed reply to the aforesaid questionnaire and the paper book filed on behalf of the assessee brings forth that copy of reconciliation of shares, copy of D-Mat account, copy of ledger account of laws from shares, contract note of job / enter day trading, copy of order u/s 143(3) of the CCL International Ltd. for corresponding A.Y. 2014-15 were before Ld. AO who must examined the same. Rather, the Bench is of considered opinion that when the scrutiny assessment was for the reason suspicious transaction relating to short term capital loss / long term capital gain on shares (inputs from Investigation Wing) then if the aforesaid documents and evidence were before Ld. AO in response to the aforesaid questionnaire and he had not made any adverse remark upon the same and Ld. PCIT was also satisfied with regard to the discrepancy which was made foundation for issuance of notice u/s 263, then the impugned assessment order could not have been co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Assessee : Shri Akhilesh Kumar Adv. And Shri Pushkar Pandey, Adv. For the Department : Shri Shankar Lal Verma, Sr. DR ORDER PER ANUBHAV SHARMA, JM: The assessee has come in appeal against the order dated 30.03.2019 passed by the Revisional Authority, Principal Commissioner of Income Tax, Ghaziabad u/s 263 of the Income-tax Act, 1961 (hereinafter referred as the Act ), against the assessment order dated 30.12.2016 passed by the Income-tax Officer Ward-1(2), Ghaziabad (hereinafter referred in short as Ld. AO ) u/s 143(3) of the Act, for A.Y. 2014-15. 2. The return was filed by the assessee company on 11.03.2015 declaring total income at Rs. 31,790/- which was processed and subsequently selected for scrutiny through CASS citing the reasons Suspicious Transaction relating to short term capital loss/long term capital gains on shares (inputs from investigation wing) . Later on, assessment was completed by the ITO, Ward-1 (2), Ghaziabad, on total income of Rs. 82,73,520/-, vide his order dt. 30.12.2016, passed u/s 143(3) of the I.T. Act, 1961. The A.O. added Rs. 82,41,726/- as per provisions of section 68 of the I.T. Act, 1961 (N.P. rate of 8% appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g into consideration the submissions of the assessee the learned Pr. CIT was satisfied with regard to discrepancy in the quantity of shares traded and considered same to be explained but directed the AO to conduct discreet inquiries about transactions of sale of CCL shares. 3.1 On second issue, the learned Pr. CIT directed the AO to verify sales and purchases made by the assessee during the year under consideration from the respective parties to ascertain as to whether transportation charges were paid by them, as assessee company has stated that the transportation charges were not paid by it but were paid by the parties from whom the material was purchases as well as sold. 4. The assessee is in appeal raising following grounds: 1. That, the order of learned Commissioner of Income Tax u/s 263 of the I.T. Act erred is bad in law and is against the facts and circumstances of the case, therefore, deserves to be quashed. 2. That, Id. CIT completely misdirected herself in invoking provisions of S.263 because, a) as even in case of rejection of share transactions only amount of short terms loss will increase hence there is no possibility of any loss to revenue. b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence in sale/purchase or rate is to be applied. Further, even after detailed enquiries Id. CIT has not found sales/purchases bogus and directed to enquire only about transportation exp. that too without any conclusion. 5. On behalf of the assessee it is submitted that detailed inquiries were made by the learned AO on the issue of share transaction while passing order u/s 143(3) of the Act. It was submitted that learned Pr. CIT was satisfied with regard to the issue of difference in quantity of purchase/sale of shares from ITS data being not verified, but without there being any notice to the assessee u/s 263 of the Act, proceeded to consider the sale of shares to be suspicious and sham transactions, thereby directing the AO to conduct discreet inquiry with regard to genuineness of transaction of purchases/sales of shares. It was submitted that general and vague direction to verify transactions without arriving at any definite conclusion about order being erroneous for revenue does not justify invoking powers u/s 263 of the Act. It was submitted that based on the inquiries raised, learned AO has taken one of the possible views. The order cannot be considered to be erroneous. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... screet inquiry. 9. The Bench is of the considered view that such an order of conducting a discreet inquiry cannot be part of exercise of revisional jurisdiction. The learned Pr. CIT was expected to cite specific error in the inquiry conducted by the learned AO to conclude that there was lack of inquiry on the issue at the stage of scrutiny assessment. 10. On the other hand it comes up that while issuing notice dated 8.6.2016 u/s 142(1) of the Act, the learned AO had raised following questions: 14. Details of month-wise sales and purchases in terms of amount and quantity along with sales/purchase return, if any. 15. Please produce books of account i.e. cash book, ledger, Journals, stock register with purchase/sale bills and vouchers of expenditure for AY 2014- 15. 16. Furnish complete copy of D-mat account of shares/derivatives/mutual funds etc. for /the year under consideration and last year i.e. A.Y. 2013-14 2014-15. 17 . Furnish copy of trading account of shares/derivatives/mutual funds etc. for the year under consideration and last year i.e. A.Y. 2013-14 2014- 15. 10.1 The assessee has given a detailed reply to the aforesaid questionnaire and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd ITR of all the parties available at page no. 61 to 87 of the paper book and page no. 94 to 95 of the paper book. The copy of the stock register, copy of bank statement and bank pass book of assessee and the comparative financials for A.Y. 2013-14 to 2016-17 were made available however, not a word what discussed by Ld. PCIT. 13. The Bench is of considered opinion while exercising Revisional Jurisdiction, Ld. PCIT was expected to go on to the merits of the submissions and also make form some independent opinion however the same is lacking. Thus, the findings of learned Pr. CIT that there was lack of inquiry on the two issues, is not sustainable. 14. Even otherwise what comes up admittedly from the records is the fact that assessment order was passed on 30.12.2016. Assessee had preferred an appeal against same u/s 250 of the Act and the same was filed before Ld. CIT(A) on 28.01.2017. The same was dismissed on 02.02.2018. However, the notice u/s 263 was issued on 28.06.2018, that is after the dismissal of the appeal by CIT(A). The impugned order u/s 263 was passed on 30.03.2019. 14.1 The issues examined by Ld. CIT(A) pertains to both the facts. Ld. CIT(A) in order dated 02. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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