PRINCIPAL COMMISSIONER OF INCOME TAX 5 vs. SHITAL PRIYASHARAN SHAH

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TAXAP/181/2018HC GujaratGJHC24008525201827 February 2018Author: HONOURABLE MR. JUSTICE AKIL KURESHI,HONOURABLE MR. JUSTICE B.N. KARIA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Income Tax Appellate Tribunal (ITAT) was correct in its view. The Tribunal had noted that the Assessing Officer (AO) had taken a particular view regarding the assessee's investments, which was considered a plausible view. Furthermore, the Tribunal observed that the Investigation Wing of the department had also inquired into these transactions, and the assessee had provided complete details. The funds received by the assessee, Shital Shah, from M/s. Sheetal Bio Agritech Limited through banking channels were utilized for the share investments. The Court found no error in the ITAT's decision and concluded that no question of law arose from the ITAT's order. Consequently, the Tax Appeal filed by the Revenue was dismissed.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax, filed an appeal challenging an order of the Income Tax Appellate Tribunal (ITAT). The ITAT had upheld the assessee's position regarding an assessment order for the assessment year 2010-11. The core of the dispute involved investments made by the assessee, Shital Priyasharan Shah, in shares of Radhe Developers India Limited, partly funded by borrowed money. The Assessing Officer (AO) had conducted inquiries into these transactions but made no additions to the assessee's income. The Principal CIT invoked Section 263 of the Income Tax Act, 1961, believing the AO's assessment order was passed without proper inquiry or application of mind.

What were the issues?

1. Whether the Appellate Tribunal was right in law and on facts in not upholding the order passed by the Principal CIT under Section 263 of the Income Tax Act, 1961, when the Assessing Officer had passed the assessment order without making proper inquiries and/or without application of mind. Assessee's Contention: The judgment does not record specific contentions made by the assessee. However, the Tribunal's finding implies the assessee's position was that the AO's inquiry was sufficient and his view was plausible. Revenue's Contention: The Revenue contended that the Assessing Officer had passed the assessment order without making proper inquiries and/or without application of mind, thereby justifying the revisional power exercised by the Principal CIT under Section 263.

Which sections of the Income-tax Act were involved?

Section 263

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
C/TAXAP/181/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 181 of 2018 ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX 5 Versus SHITAL PRIYASHARAN SHAH ========================================================== Appearance: MRS MAUNA M BHATT for the PETITIONER(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MR.JUSTICE B.N. KARIA Date : 27/02/2018

ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI)

1.

This appeal is filed by the Revenue challenging judgement of the Income Tax Appellate Tribunal dated 21.10.2016 raising following question for our consideration: “Whether the Appellate Tribunal is right in law and on facts in not upholding the order passed by Principal CIT under section 263 of the Act, although the Assessing Officer had passed the assessment order without making proper enquiries and/or without application of mind?”

2.

The issue arises out of the order passed by the Commissioner under section 263 of the Income Tax Act, 1961 revising the order of assessment passed by the Assessing Officer. The Tribunal wrongly exercised the revisional jurisdiction. Having heard learned counsel for the Revenue and having perused the documents on record, it emerges that the assessee, during the C/TAXAP/181/2018 ORDER period relevant to the assessment year 2010-11, had made sizeable investments in the shares of one Radhe Developers India Limited. Part of such investment was through borrowed fund. The Assessing Officer had carried out detailed inquiry with respect to such transaction but made no addition in the income of the assessee. CIT (Appeals) was of the opinion that the Assessing Officer had not carried out proper inquiries. He had doubted the amount credited in the account of the assessee and wished that the Assessing Officer should have enquired further.

3.

The Tribunal, however, noted that the Assessing Officer had taken a particular view which is a plausible view. It was noted that the Investigation Wing of the department also inquired into these transactions and the assessee had given full details of such transactions. Assessee-Sheetal Shah had received fund from M/s. Sheetal Bio Agritech Limited through banking channel which was utilized for investment in the shares of Radhe Developers India Limited.

4.

We find no error in the view of Tribunal. No question of law arises. Tax Appeal is dismissed. (AKIL KURESHI, J.) (B.N. KARIA, J.) JYOTI V. JANI

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