EMPIRE FINCAP P LTD,DELHI vs. PR, CIT , DELHI

Both the parties vehemently reiterate their respective stands against and in support of the learned PCIT’s impugned revision directions. Learned CIT(DR) more particularly argues that once the Assessing Officer’s regular assessment herein was very much a non speaking one without even having carried out inquiries much less detailed ones, section 263 Explanation 2 very much applies in facts of the instant case; and, therefore, we ought to reject the assessee’s stated herein. 2 | P a g e

We find no merit in the Revenue’s foregoing vehement contentions supporting the learned PCIT’s action assuming section 263 revision jurisdiction. We make it clear that so far as the first and foremost issue raised in the learned PCIT’s section 263 revision directions is concerned, he categorically observes in Para 10 at Page 14 that the Assessing Officer had neither examined regarding the case availability of corresponding funds nor applicability u/s section 56(2)(viia) which applies if any of such an asset purchased by the specified assessee is at a rate lesser than a prescribed Fair Market Value (FMV) which is admittedly not the case herein.

The factual position is hardly any different regarding the above latter issue of the assessee’s advances amounting to Rs. 5.5 Crores as well. We wish to emphasize here as per learned PCIT’s impugned order in Para 12.2, these are its outstanding advances made since the preceding assessment years which could neither be disallowed nor added; be it u/s 68 or section 69 or section 41(1) of the Act, as the case may be.

Faced with this situation, we are of the considered view that the learned Principal Commissioner has erred in law and on facts in revising the impugned assessment as erroneous one causing prejudice to the interest of justice in light of Malabar Industrial Co. Ltd. vs. CIT (2000) 243 ITR 83 (SC). The assessee succeeds in substantive ground raised herein to this effect in very terms. No other ground or argument has been pressed before us.

This assessee’s appeal is allowed.