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Income Tax Appellate Tribunal, DELHI BENCH: ‘A’ NEW DELHI
Before: SHRI R. K. PANDA & MS SUCHITRA KAMBLE
This appeal is filed against the order of Principal Commissioner of Income Tax, Karnal u/s 263(1) passed on 22nd December, 2016.
The assessee is doing the business of timber woods at Kaithal & Gandhidham, Yamuna Nagar and Delhi. Return of income for the Assessment Year 2012-13 was e-filed on 24/09/2012 declaring an income of Rs.5,34,126/-. The same was processed u/s 143(1) on 22nd August, 2013. The case was selected for scrutiny.
Subsequently, a notice u/s 143(2) was issued on 7/8/2013. During the course of assessment proceedings the assessee was asked to furnish the necessary detailed information as per questionnaire before by the Assessing Officer. The assessee through his counsel filed details. The same was placed on record before the Assessing Officer. During the course of assessment proceedings it was noticed by the Assessing Officer that there was a deposit of Rs.70 lakhs on different dates and the same was confronted to the assessee. It was stated that the assessee received additions of Rs.70 lakhs from Shri Vipul Shakti NRI from NRI account. He was a nearest friend under resident of Ukrain. The assessee further filed an affidavit of his father regarding confirmation in the affidavit. It was stated that the assessee received Rs. 70 lakhs for purchase of land at Gandhidham but due to dispute between the brothers of Shri Ashok Kumar, the deal was pending. The assessee’s counsel filed copy of bank account, certificate from HDFC, Bank copy of sale agreement in favour of Shri Vipul Shakti and copy of purchase deed of land situated at Gandhidham purchase by Shri Ashok Kumar. In assessment addition of Rs. 2,50,000 was made. The Principal Commissioner of Income Tax, Karnal vide order u/s 263 of the Income Tax Act held as under:-
The A.O passed the order without making the efforts and without making requisite enquiries or verifications in respect of unsecured loans totally Rs. 23,30,460/-.
The Ld. AR submits that the assessment in this case was completed u/s 143(3) vide order dated 13/1/2015 which was neither erroneous nor prejudicial to the interest of Revenue. The show cause notice u/s 163 was regarding receipt of 70 lakhs plus alleged fresh unsecured and squared up loans but the same was duly considered by the Assessing Officer and queries were made at the time of assessment proceedings by the Assessing Officer . The said queries were answered/replied by the assessee and after verification and satisfaction of the Assessing Officer, no addition was made as no payment was received in cash by the assessee. Therefore, the CIT cannot take an opinion from the Assessing Officer’s order, as the Assessing Officer’s order is properly passed. The Ld. AR relied upon the decision of the Hon'ble High Court in case of Principal CIT Vs. Delhi Airport Metro Express Pvt. Ltd. (ITA No. 705/2017 order dated 5/9/2017) wherein it is held that for the purposes of exercising jurisdiction u/s 263 of the Act. The conclusion that the order of the A.O is erroneous and prejudicial to the interest of the Revenue has to be preceded by some minimal enquiry.
The Ld. DR relied upon the order of the Principal CIT and submitted that there was no confirmation filed by the assessee. Therefore, the order of the Assessing Officer was not just and proper.
We have heard both the parties and perused the material available on record. From the record shown before the Assessing Officer as well as before the Principal CIT. The records shows that the details of the loans as well as the confirmations of the accounts were submitted before the Assessing Officer. The order under 263 is merely a second opinion of the Principal CIT. Therefore, the same cannot be sustained under the law. In-fact, if the Principal CIT is of the view that the A.O did not undertake any enquiry it becomes incumbent on the Principal Commissioner of Income-Tax to conduct such enquiry. But in the present case all that Principal Commissioner of Income Tax has done in the impugned order is to refer to the factual aspects which were already adjudicated and verified by the Assessing Officer. There was no new material or there was no demonstrations in the order u/s 263 of the Act that the Assessing Officer as well as the assessee has not particularly address the issue raised by the Principal CIT. The decision of the Hon’ble Delhi High Court in case of Principal CIT Vs. Delhi Airport Metro Express Pvt. Ltd. relied by the Ld. AR is relevant in the present case. We, therefore, relied upon the order of the High Court and the grounds raised by the assessee are allowed.
In result, the appeal of the assessee is allowed.
Order pronounced in the Open Court on 07th November, 2017.