| The Tax Publishers2019 TaxPub(DT) 5897 (Del-Trib) INCOME TAX ACT, 1961
Section 263
Where AO after conducting thorough enquiry had taken a plausible view and did not make addition as regards information emanated from investigation wing, assessment order could not be held as erroneous and prejudicial.
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Revision under section 263 - Erroneous and prejudicial order - AO after due application of mind having taken a plausible view -
CIT held assessment order to be erroneous and prejudicial to the interest of revenue AO without applying his mind to information emanated from investigation wing as to assessee having received bogus share application money simply accepted case decision relied on by assessee did not make any further enquiry regarding share applicants.Held: Thorough enquiries were conducted by AO both at the time of original assessment and at the time of reassessment proceedings. Full details giving the names, addresses, number of shares of nominal value and share premium amount of all the share holders along with their bank statements, copy of IT returns, PAN, etc., were filed before AO. Even if shareholders were bogus, as per allegation of revenue, in view of reasons recorded for reopening, however, as per prevailing law at that time addition could not have been made in the hands of assessee and addition, if any, could be made only in the hands of such bogus share holders. Since AO had taken a plausible view, therefore, assessment order could not be treated as erroneous and prejudicial.
Distinguished:Deniel Merchants (P) Ltd. & Anr. v. ITO & Anr. 2017 TaxPub(DT) 5217 (SC).
REFERRED : CIT v. Lovely Exports (P) Ltd. (2008) 216 CTR (SC) 195 : 2009 TaxPub(DT) 261 (SC).
FAVOUR : In assessee's favour.
A.Y. : 2006-07
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