Kanha Capital Services Ltd. v. Pr. CIT

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The Tax Publishers2021 TaxPub(DT) 5909 (Del-Trib)

INCOME TAX ACT, 1961

Section 263

In the documents found by investigation wing, assessee was mentioned as a beneficiary and name of the facilitator Mr. Goyal Sahab as mediator for arranging accommodation entries was also found. The details of cash trail was also shown from the documents from Mr. S.K. Jain and Mr. Virendra Kumar Jain. Despite all these information, AO did not make any enquiry. He ignored the above facts and passed assessment order in a cryptic manner without making any enquiries. Therefore, Pr. CIT rightly treated order passed by AO as erroneous and prejudicial to the interest of revenue.

Revision under section 263 - Erroneous and prejudicial order - No enquiry made by AO -

Pr. CIT treated order passed by AO as erroneous and prejudicial to the interest of revenue on the ground that there was detailed information available with AO about accommodation entries obtained by assessee from Jain Brothers, however, no enquiry was made by AO as regards thereto. Assessee pleaded that it was not a case of no enquiry, but of inadvertent enquiry. Held: In the documents found by investigation wing, assessee was mentioned as a beneficiary and name of the facilitator Mr. Goyal Sahab as mediator for arranging accommodation entries was also found. The details of cash trail was also shown from the documents from Mr. S.K. Jain and Mr. Virendra Kumar Jain. Despite all these information, AO did not make any enquiry. He ignored the above facts and passed assessment order in a cryptic manner without making any enquiries. Pr. CIT himself verified the records and after verification of records took out relevant pages of the information. He further looked at the return of income filed by assessee and perused the information supplied by the assessee during assessment proceedings. Even otherwise the documents were so glaring and clear-cut that Pr. CIT after applying his mind and verifying return of income as well as the assessment records has come to the conclusion that no enquiry was made by AO. Therefore, order passed under section 263 was sustained as valid.

Applied:Deniel Merchants P. Ltd. & Anr. v. ITO & Anr. 2017 TaxPub(DT) 5217 (SC) and Paramount Communications Ltd v. Pr. CIT [2017 TIOL 253-SC-IT] : 2017 TaxPub(DT) 4022 (SC). Rlied:Rajmandir Estate Pvt. Ltd. v. Pr. CIT (2016) 386 ITR 162 (Cal) : 2016 TaxPub(DT) 2834 (Cal-HC).

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2010-11

IN THE ITAT, DELHI BENCH