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Facts
A search action on 29/11/2016 resulted in the discovery of gold coins weighing 738.5 grams. The assessee explained that 500 grams belonged to his son and 238.5 grams to him, and had disclosed gold in prior wealth tax returns. The AO made no addition. The PCIT invoked Section 263, deeming the AO's order erroneous for not insisting on purchase bills.
Held
The Tribunal held that the PCIT's exercise of revisionary jurisdiction under Section 263 was not justified. The assessee had already disclosed the gold in prior wealth tax returns, and the quantity in question was not significant enough to warrant further inquiry when already disclosed. The assessment order was not erroneous.
Key Issues
Whether the PCIT was justified in invoking Section 263 to revise the assessment order when the assessee had already disclosed the gold in wealth tax returns and the AO had accepted the explanation.
Sections Cited
132, 263, 143(3)
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Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: Shri Sanjay Garg & Shri Makarand V. Mahadeokar
आदेश/O R D E R Per Sanjay Garg, Judicial Member:
This appeal filed by the assessee is directed against the order of the Learned Principal Commissioner of Income-Tax (Central), Ahmedabad [hereinafter referred to as “Ld. PCIT” for short] dated 31/03/2022 passed in exercise of his revisionary jurisdiction under Section 263 of the Income-Tax Act, 1961 [hereinafter referred to as "the Act"] for Assessment Year (AY) 2017- 18.
The brief facts of the case are that a search action was carried out u/s.132 of the Act in the case of the assessee on 29/11/2016, during which, gold coins weighing 738.5grams were found from the bank locker. During the assessment proceedings, the assessee duly explained that out of the 738grams gold-coins, 500grams gold coins belonged to his son and 238.5 grams gold-coins belonged to him. The assessee also furnished the wealth tax returns for AY 2010-11 and AY 2014-15 before the Assessing Officer (AO) to show that the assessee had duly disclosed gold available with him and that the gold disclosed in the wealth tax return was more than that was found at the residence of the assessee. The Ld. AO after considering the overall facts and circumstances of the case, did not make any addition on account of the said gold-coins weighing 738.5grams.
The Ld. PCIT, however, exercising his power jurisdiction u/s.263 of the Act, observed that the AO has merely believed on the wealth tax returns of the assessee. That the AO had not insisted upon the assessee to produce bills and vouchers regarding purchase of the aforesaid gold-coins. He, therefore, set aside the impugned assessment order holding that the same as erroneous and prejudicial to the interests of the revenue and restored the matter to the file of the AO with a direction to pass a fresh assessment order in accordance with law for the limited purpose of examining the particulars with respect to gold-coins of 238.5grams and its taxability in the hands of the assessee.
Being aggrieved by the said order of the Ld. PCIT, the assessee has come in appeal before us.
We have considered the rival submissions and gone through material available on record. It is to be noted that in this case, the assessee had already Tehmul B. Sethna vs.The Pr.CIT (Central) Asst.Year : 2017-18 3 taken into account and duly disclosed in his wealth-tax returns about the availability of the gold-coins/gold with him and further that the gold-coins found during the search action were not more than that was already disclosed by the assessee in his wealth-tax returns for the AY 2010-11 and AY 2014-15. The AO after considering the overall facts and circumstances of the case and explanation given by the assessee, did not find it a fit case for making any addition. In our view, under such circumstances, the said assessment order cannot be said to be erroneous. The Ld. PCIT in this case has attgempted to substitute the plausible view of the AO with his own view and insisted that the AO should have called upon the evidence in the shape of bills and vouchers vide which the aforesaid gold-coins were purchased. In our view, the said action of the Ld. PCIT is not justified. When the assessee had already disclosed the aforesaid gold in his earlier years’ wealth-tax-returns, there was no requirement of further questioning the assessee on this issue. Moreover, the excess gold weighing 238grams is not a large quantity, which remained unexplained. In view of our above observations, exercise of revision jurisdiction by the Ld. PCIT u/s.263 of the Act, in this case, is not justified. Therefore, the impugned revision order passed by the Ld. PCIT u/s.263 of the Act is hereby quashed.
In the result, the appeal of the assessee stands allowed. Order pronounced in the Open Court on 05 /12/2025.