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TMI Blog2025 (3) TMI 1273X X X X Extracts X X X X X X X X Extracts X X X X ..... n the record and it was found that the order of the assessment was erroneous so far as prejudicial to the interest of the revenue and an order passed u/s 263 directing the AO to pass a afresh assessment order after providing a reasonable opportunity to the assessee company. Being aggrieved and dissatisfied with the order passed u/s 263 the assessee preferred an appeal before us. 3. The ld. Counsel of the assessee challenges the very impugned order thereby submitting that the assessment order passed was neither erroneous nor prejudicial to the interest of the revenue. The Ld. Counsel further submits that no enquiry was made by the PCIT and no finding had been given to the order passed u/s 143(3) that why the order passed was erroneous and prejudicial to the interest of the revenue, though in the impugned order, the PCIT has held that it is a case of lack of enquiry. The Ld. Counsel further submits that if PCIT is of the view that the AO has not done proper enquiry it is incumbent on the PCIT to conduct such enquiry and require a specific finding that the assessment order was erroneous and prejudicial to the interest of the revenue. The Ld. Counsel cited several decisions of the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon Bonds sold during the year iv) Relevant extracts of Memorandum to Finance Bill, 2005 v) Relevant extracts of AS-11 vi) Relevant Extracts of AS-13 vii) Acknowledgment of Return of Income dated 28.11.2015 along with Computation of total income and computation of Capital Gains for AY 2015- 16. 7. We have gone through the paper book and find that the long-term capital loss of Rs. 2,28,57,325/- has already been mentioned in the computation of total income submitted by the assessee before the AO income under the head capital gain. We have also found that the long-term capital loss on sale of ZCB issued by NABARD has also been disclosed in the computation of income. In the statement showing profit of loss on sale of investment. The assessee has also filed notice being the confirming part of the taxable income that reveals thus: "During the year, unrealized foreign exchange fluctuation loss amounting to Rs. 9,69,00,000/- arising on account of foreign loan has been adjusted with the cost of the assets in the books of accounts. In computing the Total income the above loss has been claimed as allowable deduction since the above fluctuation in the rate of foreign exchange does n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the company has not entered into any speculative transaction and therefore explanation to Section 73 shall not be applicable. 15.4. In case any transaction is in the nature of speculative transaction as per provisions of Section 43(5) or explanation to Section 73, please explain as to why the expenses should not be apportioned proportionately in the ratio of turnover. In this regard it is humbly submitted that as mentioned above, the assessee has not entered into any speculative transaction and hence provisions of Section 73 or 43(5) shall not be applicable." 8. So far, the next ground(as above) is concerned it appears to us that computation chart has clearly revealed that the short term capital gain of Rs. 2,19,03,091/- includes short term capital loss on sale of utilization income fund. A detailed submission has already filed by the assessee before the AO and AO accepted the contention and did not make adjustment. 9. So far, the points no.3 is concerned in a notice u/s 142(1) query no. 22 the assessee filed a details of valuation fluctuation loss vide its reply dated 14.12.2016. 10. Looking at the order passed by the PCIT it appears to us that no finding was given that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer on merits and then hold and form an opinion on merits that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. In the second set of cases, CIT cannot direct the Assessing Officer to conduct further enquiry to verify and find out whether the order passed is erroneous or not." 11. We have also gone through the order passed by the Co-ordinate Bench of the Kolkata in the case of Animesh Autocorp Pvt. Ltd. vs. PCIT-4, Kolkata in ITA NO. 1121/Kol/2019 for AY 2012-13 dated 1st December, 2022 and find that the Co-ordinate Bench of Kolkata has discussed the Section 263(1) of the Act and also placed reliance in the Co-ordinate bench of ITAT, Kolkata passed in case of Amritrashi Infra Pvt. Ltd. vs. PCIT in ITA NO. 838/Kol/2019 and quashed the order of PCIT by giving observation that it is not sustainable as per law. The relevant paragraph of the order of Co-ordinate bench of Kolkata is thus: 10. As per the provisions of section 263 as enumerated above, after getting the explanation from the assessee, the Ld. Pr. CIT was supposed to examine the contention of the assessee. Before passing an order of modifying, enhancing or cancelling t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned that where the Commissioner is of the opinion that the AO had passed the order without making enquiries or a claim has been allowed without enquiring into the claim or that the same is not in accordance with any order or direction or instruction issued by CBDT, that shall be deemed to be erroneous in so far as its prejudicial to the interest of Revenue. The said deeming provisions, in our view, are not applicable for the assessment year under consideration i.e., A.Y. 2012-13. 11.1. Even otherwise, a perusal of the revision order passed by the ld. Pr. CIT shows that the ld. Pr. CIT has not pointed out any error or discrepancy in the evidence furnished by the assessee and without examining such evidence and without counter questioning the assessee on the relevant points and even without considering the submission of the assessee furnished in reply to the show-cause notice, the ld. Pr. CIT, in our view, was not justified in setting aside the order, simply stating that in his view more enquiries were needed to be carried out by the AO. As observed above, the ld. Pr. CIT without examining the details of the share applicants and the evidence furnished by the assessee has passed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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