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

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ITA 3278/DEL/2018Status: DisposedITAT Delhi18 September 2023AY 2010-11Bench: SHRI N.K. BILLAIYA (Accountant Member), SHRI ANUBHAV SHARMA (Judicial Member)7 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Assessing Officer (AO) had conducted sufficient inquiry into the transaction, including issuing a notice under Section 133(6) and receiving a confirmation from the party involved. Therefore, the assessment order was neither erroneous nor prejudicial to the revenue.

What were the facts?

The Principal Commissioner of Income Tax (PCIT) initiated proceedings under Section 263 of the Income Tax Act, 1961, to revise an assessment order. The PCIT believed the assessment order was erroneous and prejudicial to the revenue's interest regarding an alleged accommodation entry.

What were the issues?

Whether the PCIT erred in assuming jurisdiction under Section 263 when the AO had already conducted adequate inquiry into the transaction in question.

Which sections of the Income-tax Act were involved?

Section 263,Section 147,Section 143(3),Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘B’: NEW DELHI

Before: SHRI N.K. BILLAIYA & SHRI ANUBHAV SHARMA

For Appellant: Shri Varun Gupta, CA
For Respondent: Shri T James Singson, CIT(DR)
Hearing: 13.09.2023Pronounced: 18.09.2023

ORDER PER N.K. BILLAIYA, AM

This appeal by the Assessee is preferred against the order of the PCIT-2, New Delhi, dated 28/03/2018 framed U/s 263 of the Act.

2.

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.

3.

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

ITA No.- 3278/Del/2018 Crosslink Finlease Pvt. Ltd. carefully perused and the relevant documentary evidences brought on record duly considered in the light of Rule 18(6) of the ITAT Rules.

4.

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:

ITA No.- 3278/Del/2018 Crosslink Finlease Pvt. Ltd.

ITA No.- 3278/Del/2018 Crosslink Finlease Pvt. Ltd.

5.

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:

ITA No.- 3278/Del/2018 Crosslink Finlease Pvt. Ltd.

6.

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:

ITA No.- 3278/Del/2018 Crosslink Finlease Pvt. Ltd.

7.

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.

8.

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.

9.

In the result, Appeal of the assessee is allowed.

Order pronounced in the Open Court on 18.09.2023

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