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| The Tax Publishers2020 TaxPub(DT) 4266 (Del-Trib) INCOME TAX ACT, 1961
Section 263
As creditors were not the loans received by assessee but were part of unpaid expenditure, therefore, reason given for resuming jurisdiction under section 263 to verify genuineness and creditworthiness of sundry creditors was not correct and, therefore, assessment order could not be treated as erroneous and prejudicial.
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Revision under section 263 - Erroneous and prejudicial order - Wrong fact recorded by CIT for invoking revisionary jurisdiction -
CIT held assessment order as erroneous and prejudicial to the interest of revenue on the ground that as per balance-sheet assessee had shown sundry creditors of Rs. 51,44,53,415 comprising of total 70 entites and only one entity of sundry creditor of Rs. 4,65,86,911 was verified and which was found to be bogus and therefore, verification was required of sundry creditors. Held: On careful reading of assessment order, it could be seen that AO could not find that one entity comprising of Rs. 65,86,911 was bogus. The creditors were not the loans received by assessee but were part of unpaid expenditure. Thus reason given for resuming jurisdiction under section 263 to verify genuineness and creditworthiness of sundry creditors was also not correct. Accordingly, assessment order could not be treated as erroneous and prejudicial.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2014-15
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