| The Tax Publishers2021 TaxPub(DT) 1599 (Del-Trib) INCOME TAX ACT, 1961
Section 263
Thorough enquiries were conducted by AO at the time of reassessment proceedings. Full details such as names, addresses, number of shares of nominal value and share premium amount of all the shareholders along with their bank statements, copy of IT returns, PAN, etc., were filed before AO. Even if shareholders were bogus as per allegation of the revenue in view of the reasons recorded for reopening, however, as per law prevailing at that time, addition could not have been made in the hands of assessee and addition, if any, could have been made only in the hands of such bogus share holders. Since AO had taken a plausible view, therefore, it could not be held as erroneous and prejudicial.
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Revision under section 263 - Erroneous and prejudicial order - AO had taken a plausible view after due application of mind -
AO received information from Investigation Wing about accommodation entry of Rs. 40 lakhs received by assessee from M/s. Victory Software Pvt. Ltd., Zenith Automotive Pvt. Ltd. and Humtum Marketing Pvt. Ltd. Based on the above, AO issued notice under section 148 after recording the reasons. Subsequently, AO issued notice under section 143(2)/142(1) in reply to which assessee filed the requisite details. Thereafter, AO completed assessment under section 147/143(3) accepting income returned therein. AO made proposal under section 263 for revising assessment Order stating that certain facts had emerged which were not available on record at the time of assessment under section 147. On the basis of the proposal given by AO, Pr. CIT treated order passed by AO as erroneous and prejudicial to the interest of Revenue alleging that AO failed to apply his mind to the case in all perspective. Held: Thorough enquiries were conducted by AO at the time of reassessment proceedings. Full details such as 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 the revenue in view of the reasons recorded for reopening, however, as per law prevailing at that time, addition could not have been made in the hands of assessee and addition, if any, could have been made only in the hands of such bogus shareholders. Since AO had taken a plausible view, therefore, it could not be held as erroneous and prejudicial.
Relied:PCIT v. Delhi Airport Metro Express Private Limited vide ITA No. 705/2017 Order, dated 5-9-2017 : 2017 TaxPub(DT) 4058 (Del-HC), DIT v. Jyoti Foundation 2013 TaxPub(DT) 2463 (Del-HC), CIT v. Sunbeam Auto Ltd. 2011 TaxPub(DT) 88 (Del-HC) and CIT v. Lovely Exports (P) Ltd. 2009 TaxPub(DT) 261 (SC). Distinguished:Deniel Merchants (P) Ltd. & Anr. v. ITO & Anr. 2017 TaxPub(DT) 5217 (SC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11
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