| The Tax Publishers2020 TaxPub(DT) 0056 (Mum-Trib) INCOME TAX ACT, 1961
Section 263 Section 68
Where impugned loan was already added by AO and ultimately it was attained finality in quantum assessment and in one case it was old loan carry forward in relvant year hence, Pr.CIT was not justified in his order directing verification, further provisions of section 2(22)(2) would not be applied to an old loans, however, as regards to two other issues viz. excess grant of TDS and applicability of section 43B on professional tax were to be tested in revisional assessment proceeding.
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Revision under section 263 - Erroneous and prejudicial order - Lack of enquiry and non-application of mind by AO -
Upon perusal of case records. Pr. CIT, noticing lapses in assessment order, issued show-cause notice under section 263 directing assessee to clarify certain issues, viz., (i) Unsecured loans from of party remained unverified, (ii) applicability of provisions of section 2(22)(e) in case of loans received from M/s. Suchitra Homes Entertainment (I) (P) Ltd. (iii) Grant of excess TDS credit and applicability of section 43B on professional tax in the absence of evidence of actual payment. However, finding the explanation of assessee to be non-satisfactory, the quantum assessment order was termed as erroneous and prejudicial to the interest of the revenue since it was a case of lack of inquiry and Explanation 2 to section 263 was found clearly applicble to the factual matrix. Pr.CIT, set aside the quantum assessment order and directed AO to pass fresh assessment order.Held: The final directions of Pr. CIT to be erroneous to some extent was noted that there was blanket set-aside of the quantum assessment order overlooking the fact that the addition of Rs. 7.50 lakhs as made by AO in the quantum assessment order had already attained finality and there would be no occasion to revisit the same in revisional jurisdiction since the quantum assessment order could not be said to be prejudicial to the interest of the revenue, to that extent. AO was, therefore, directed not to delve into the verification of loan of Rs. 7.50 lakhs stated to be obtained from M/s Reiva Sarees. It was incumbent on the part of Pr. CIT to appreciate the assessee's submissions in the correct perspective. The Pr. CIT, in the show-cause notice, had observed that unsecured loans obtained from certain entities remained to be verified. However, the loan obtained from Anuj Gems (wrongly referred to as Anju Gems) was only a brought forward loan which was repaid by the assessee during the year. Therefore, there could be no occasion to consider the same from the point of view of addition under section 68. AO was, therefore, directed to restrict the verification with respect to remaining two entities, viz., Dharam Oberoi & Diyas Productions Private Ltd. Similarly, the provisions of section 2(22)(e) would not be applicable against loans obtained from M/s Suchitra Homes Entertainment (I) Pvt. Ltd. since the confirmation on record would show that the said loans were merely brought forward loans and there were no fresh receipts of loans during the year. Therefore, the order could not be termed as erroneous or prejudicial to revenue to that extent. So far as excess of grant of TDS was concerned, it would suffice to direct AO to grant due TDS credit as per law in revisional assessment proceedings since as per assessee's submissions, the assessee, in fact, had been granted short TDS credit. The last issue viz. applicability of section 43B on professional tax was factual one. The AO was directed to verify the same during revisional assessment proceedings.
Distinguished:CIT v. Fine Jewellery (I) (P) Ltd. ITA No. 296 of 2013, dt. 3-2-2015 : 2015 TaxPub(DT) 1385 (Bom-HC), Small Wonder Industries Ltd. v. CIT ITA No. 2464/Mum/2013, dt. 24-2-2017, Idea Cellular Ltd. v. Dy.CIT (2008) 301 ITR 407 (Bom) : 2008 TaxPub(DT) 1640 (Bom-HC).
REFERRED : Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC), dt. 10-2-2000, CIT v. Vikas Polymers (2010) 194 Taxman 57 (Del) : 2010 TaxPub(DT) 2189 (Del-HC), dt. 16-8-2010, CIT v. Max India Ltd. (2007) 295 ITR 282 (SC) : 2007 TaxPub(DT) 1548 (SC), Grasim Industries Ltd. v. CIT (2010) 321 ITR 92 (Bom) : 2010 TaxPub(DT) 1431 (Bom-HC), CIT v. Gabriel India Ltd. (1993) 203 ITR 108 (Bom) : 1993 TaxPub(DT) 1357 (Bom-HC), CIT v. Ballarpur Industries Ltd. (2017) 85 Taxmann.com 10 (Bom) : 2017 TaxPub(DT) 4015 (Bom-HC), Jeevan Investment & Finance P. Ltd. v. CIT (2017) 291 CTR 241 (Bom) : 2017 TaxPub(DT) 400 (Bom-HC) & Shoreline Hotel P. Ltd. v. CIT (2018) 98 Taxmann.com 234 (Bom) : 2018 TaxPub(DT) 6459 (Bom-HC).
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