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02-01-2020, Anand Lilaram Raisinghani, Section 263, 119, 147, Tribunal Mumbai

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8 months 3 weeks ago #11911 by amit
Section - 263, 119, 147, 68
Order Date - 02-01-2020
Favouring - Partly
Court - Tribunal Mumbai
Appellant - Anand Lilaram Raisinghani
Respondent - PCIT
Citation - 120Taxpundit32
Appeal No. - I.T.A. No.3385/Mum/2019
Asstt. Year - 2014-15


PER : Manoj Kumar Aggarwal

1.1 Aforesaid appeal by assessee for Assessment Year [in short referred to as ‘AY’] 2014-15 contest correctness of revisional jurisdiction u/s 263 as invoked by Ld. Pr. Commissioner of Income-Tax-16, Mumbai [in short referred to as ‘Pr. CIT’] vide order dated 27/03/2019. The grounds raised by the assessee read as under: -

1. The Principal Commissioner of Income Tax- 16, Mumbai [PCIT] erred in passing the order u/s.263 of the Income Tax Act, 1961.

2. The PCIT erred in coming to the conclusion that the unsecured loans taken from the following parties have remained unverified.

3. The PCIT erred in concluding that the loan of Rs.4,25,556/- taken from Suchitra Home Entertainment (I) Private Limited in the earlier year remained unverified.

4. The PCIT erred in concluding that the Assessing Officer has allowed the relief for TDS of Rs. 92,000/- without enquiring into the claim.

1.2 The learned Authorized Representative for Assessee (AR), at the outset, submitted written submissions in support of the appeal. On the other hand, Ld. CIT-DR drawing our attention to the orders of lower authorities, placed reliance on various judicial pronouncements to support the submissions that revisional jurisdiction u/s 263 were validly invoked since it was a case of lack of inquiry. We have carefully heard the rival arguments, duly considered the submissions made before us and deliberated on judicial pronouncements as relied upon by respective representatives.

2.1 Facts on record would reveal that the assessee being resident individual was assessed for year under consideration u/s 143(3) on 26/12/2016 wherein the assessee was saddled with sole addition of unsecured loans of Rs.7.50 Lacs stated to be received from an entity i.e. Reiva Sarees since it could not file any confirmation from the said party. The perusal of record would, prima-facie, reveal that the assessee has accepted the quantum assessment order and did not prefer any further appeal against the same.

2.2 Subsequently, upon perusal of case records, Ld. Pr.CIT, noticing lapses in assessment order, issued show cause notice u/s 263 on 13/03/2019 directing assessee to clarify certain issues viz. (i) Unsecured loans from rest of the party remained unverified; (ii) applicability of provisions of Sec. 2(22)(e) in case of loans received from M/s Suchitra Homes Entertainment (I) Pvt. Ltd.; (iii) Grant of excess TDS credit and applicability of Sec.43B on professional tax in the absence of evidence of actual payment.

2.3 The assessee, vide submissions dated 20/03/2019, submitted that loan confirmations were filed with respect to Anuj Gems, Dharam Oberoi, Diyas Productions Pvt. Ltd. & Reiva Sarees during the course of assessment proceedings and the same were duly verified. Regarding applicability of Sec.2(22)(e), it was submitted that the amounts were not received during the year under consideration and confirmation was placed on record and therefore, the aforesaid provisions were not applicable. Regarding TDS credit, the attention was drawn to the fact that credit was allowed only to the extent of Rs.28,49,043/- as against TDS credit of Rs.30,07,043/- as claimed by the assessee. Regarding payment of professional tax, it was submitted that the payment was made in subsequent period. In nutshell, the assessee defended its stand qua issues raised in the show-cause notice.

2.4 However, finding the explanation to be non-satisfactory, the quantum assessment order was termed as erroneous and prejudicial to the interest of the revenue since it was a case of lack of inquiry and Explanation-2 to Section 263 was found clearly applicable to the factual matrix. After referring to certain case laws as enumerated in the impugned order, Ld. Pr.CIT, set-aside the quantum assessment order and directed Ld.AO to pass fresh assessment order. The directions given be Ld. Pr. CIT could be extracted in the following manner: -

5. In view of the provisions of Section 263 of the Income Tax Act and also the ratio of the decisions as above, it is my considered view that the impugned order is erroneous and prejudicial to the interests of the revenue. The assessment order, is therefore, setaside and the Assessing officer is directed to pass fresh assessment order after giving assessee the opportunity of being heard as per act and law in terms. Aggrieved by aforesaid directions, the assessee is under further appeal before us challenging revisional jurisdiction u/s 263.

3. The Ld. Authorized Representative for Assessee (AR), in its written submissions, as placed on page nos. 1-5 of the paper book, has submitted that requisite details were already placed before Ld. AO during the course of regular assessment proceedings, which were duly verified before passing the quantum assessment order. The Ld. AR has also submitted that it was

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