CROSSLINK FINLEASE PVT. LTD.,NEW DELHI vs. PR.CIT- 2 , NEW DELHI

The sum and substance of grievance of the assessee is that the PCIT erred in assuming jurisdiction U/s 263 of the Act and further erred in holding that the Assessment Order dated 11.02.2016 framed U/s 147 r.w.s. 143(3) of the Act, is not only erroneous but also prejudicial to the interest of the revenue.

Representatives of both the sides were heard at length. The case records Page 1 of 7

A perusal of the order of PCIT shows that he has assumed jurisdiction by issuing the following Show-cause notice U/s 263 of the Act:

The issue which needs to be addressed is whether the AO has made any enquiry in respect of the alleged accommodation entry amounting to Rs. 6,00,000/- through M/s Avail Financial Services Pvt. Ltd. The answer lies in the reasons recorded for reopening the assessment which reads as under:

After the reopening the assessment on the basis of the abovementioned reasons, the AO issued a Notice U/s 133(6) of the Act to M/s Avail Financial Services Pvt. Ltd., who responded as under:

The above undisputed facts show that not only the AO had made sufficient enquiry but also the said party has confirmed the transaction on the basis of which the AO accepted the return of the assessee inspite of reopening the assessment on the very same ground which prompted the PCIT to assume jurisdiction U/s 263 of the Act.

Considering the facts of the case from all possible angle, we are of the considered opinion that the assessment order dated 11.02.2016 is neither erroneous nor prejudicial to the interest of the revenue. Therefore, the assumption of jurisdiction by the PCIT U/s 263 of the Act is bad in law and the order deserves to be set aside. We accordingly restore the assessment order dated 11.02.2016.

In the result, Appeal of the assessee is allowed.