| The Tax Publishers2023 TaxPub(DT) 4108 (Chen-Trib) INCOME TAX ACT, 1961
Section 263
Where certain additions of on-money had been made in hands of assessee on protective basis, however, it was noted by revisionary authority that figures of the on-money on substantive basis, were much higher and a portion of the same was omitted to be considered by AO while framing the assessment order; it was a clear case where error had incurred, which was prejudicial to the interest of Revenue and hence, no fault could be found in the revision order passed by PCIT under section 263 and the same was upheld accordingly.
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Revision under section 263 - Erroneous and prejudicial order - Error incurred by AO while framing assessment that was prejudicial to the interest of Revenue -
Assessee was a director of an entity 'E'. Assessment was made under section 143(3) read with section 147 after making addition of unexplained cash credit for Rs. 60.81 crores. The said order was subjected to revision by PCIT on the ground that the assessee received excess amounts in cash in respect of sale of certain plots over and above officially recorded price. The excess amount was quantified at Rs. 85.58 crores and on that basis, case of the assessee was reopened to tax the amount of Rs. 85.58 crores. However, while completing the assessment, only an addition of Rs. 60.81 crores was made and balance sum of Rs. 24.77 crores was omitted to be added. Assessee opposed the same on the ground that the impugned amount was already taxed in the hands of 'E'. However, the PCIT observed that 'E' collected money of Rs. 60.81 crores from 51 buyers out of 70 buyers and for remaining 19 buyers, the AO of 'E', took average on-money received from 51 buyers and added further amount of Rs. 24.77 Crores. Therefore, the PCIT opined that the AO of the assessee should have brought to tax the said amount also for taxation but he failed to take note of it. Accordingly, assessment order was held to be erroneous and prejudicial to the interest of Revenue. Held: From the fact, it emerged that certain additions of on-money had been made in hands of assessee on protective basis. However, it was noted by revisionary authority that figures of the on-money on substantive basis were much higher and a portion of the same was omitted to be considered by AO while framing the assessment order. Thus, it was a clear case where error had incurred, which was prejudicial to the interest of Revenue. Therefore, no fault could be found in the revision order passed by PCIT under section 263 and accordingly, the same was upheld.
REFERRED :
FAVOUR : Against the assessee
A.Y. : 2010-11
IN THE ITAT, CHENNAI BENCH
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