Kavita Jayeshkumar Kotak, Ahmedabad V. The Pr. CIT (Central), Ahmedabad

ITA 54/AHD/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 3441 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 22-04-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Revision of order; Question of law; Assessment record; Tax effect
• Section: 132; 143(3); 142(1); 153A; 69A; 2(A)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH (Conducted Through Virtual Court) Before: Ms. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member Kavita Jayeshk u mar Kotak, Ah med aba d PAN: AHPP K2 082E (Appellant) Vs PCIT(Central), Ah med abad (Resp ondent) Asses see b y : Shri Nupur Shah, A. R. & Shri Dhiren Shah, A. R. Revenue by : Shri S ushil Kum ar Madhu, CIT-D.R. Date of hearing : 01-03 -2022 Date of pronouncement : 28-04 -2022 आदेश/ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This is an appeal filed by the assessee against the order of the ld. Pr. Commissioner of Income Tax (Central), Ahmedabad in Order no. ITBA/REV/F/REV5/2020-21/1032088429(1) vide order dated 31/03/2021 passed for the assessment year 2014-15. 2. The assessee has raised following grounds of appeal:- “1. The Ld. PCIT has erred in law and on facts in passing the order u/s. 263 of the Act by making an observation in Para 10 on Page 14 & ITA No. 54 /Ahd/2021 Assessment Year 2014-15 I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 2 15 of the order u/s. 263 of the Act dated 31.03.2021 that" in the light of facts and circumstances narrated above and in law, I hold that the Assessing Officer has erred in making a proper assessment in this case. The assessment order is, therefore, erroneous in as much as it is prejudicial to the interest of Revenue. Hence, in exercise of power conferred in me u/s. 263 of the Act, I set aside the assessment order passed u/s. 153A r.w.s. 143(3) of the IT. Act, 1961 on 30.12.2018 for the A.Y. 2014-15. The Assessing Officer is directed to verify/examine the claim of exemption u/s. 10(38) of the Act in respect of long term capital gain from the sale of shares of "Look Health Care Service Ltd" on the line suggested in foregoing paragraph and pass the assessment order after giving a reasonable opportunity to the assessee of being heard". 2. The Ld. PCIT has erred in law and on facts in not properly considering the submission filed by the appellant vide letter dated 26.03.2021 along with relevant supporting evidences as well as various judicial pronouncements relied upon by the appellant. 3. The appellant has to humbly submit that the Ld. AO during the course of assessment proceedings u/s. 153A vide Notice u/s. 142(1) dated 11.12.2018 specifically asked with respect to the claim of LTCG on sale of shares M/s. Looks Health Care Service Ltd and the appellant submitted detailed reply along with relevant documents and explanation in respect of claim of Long Term Capital Gain u/s. 10(38) of the Act from sale of shares of " Looks Health Care Services Ltd" and hence the allegation of the Ld. PCIT that the Ld. AO has not examined the genuineness of the long term capital gain claimed u/s. 10(38) of the Act is incorrect as the Ld.AO issued detailed show cause notice running into 12 pages in relation to scrip of " Looks Health Care Service Ltd" is not correct. 4. The appellant humbly submits that an assessment proceedings u/s. 153A r.w.s. 143(3) of the IT. Act shall be presumed to have been passed after a full and extensive scrutiny and the formation of opinion shall be on the points raised in the return and in the course of assessment proceedings. Taking into regard the provisions of section 114(e) of the Evidence Act and the essentials that come into operation resultantly it must be presumed that the AO had performed his duty in I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 3 the manner expected of him, that is, after examining and forming an opinion on all aspects of the return as well as various submissions, documents, evidences submitted during the course of assessment proceedings, though he has not been articulate about the same in the assessment order. 5. In view of the aforesaid facts and cogent material evidence placed by the appellant on record establishes that the Long Term Capital Gain earned by the appellant in the share of Looks Health Care Services Ltd is genuine long term capital gain which has been claimed as exempt u/s. 10(38) of the IT. Act, 1961 and hence the order passed by the Ld. AO u/s. 153A r.w.s. 143(3) on 30.12.2018 is neither erroneous nor prejudicial to the interest of revenue. The appellant reserves its right to add, amend, alter or modify any of the grounds stated hereinabove either before or at the time of hearing. PRAYER The appellant therefore respectfully prays that:- 1. The order passed by the Ld. CIT passed u/s. 263 of the Act dated 31.03.2021 setting aside the assessment order passed u/s. 153A r.w.s. 143(3) of the IT. Act, 1961 on 30.12.2018 for A.Y. 2014-15 may kindly be quashed. 2. Such and further relief as the nature and circumstances of the case may justify.” 3. The brief facts of the case are that the assessee filed return declaring income of Rs. 6,32,010/- for AY 2014-15 on 31-07-2014. Thereafter, a search action u/s. 132 of the I.T. Act was conducted on JP Iscon Group on 25.02.2016 and the residence of assessee was also covered under that search. Consequently, notice u/s 153A dated 07.02.2017 was issued to the assessee. In response to that the assessee filed ITR on 05.04.2017 showing total income of Rs.6,34,920/-. Order u/s. 153A r.w.s. 143(3) of the I.T. Act for I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 4 A.Y.2014-15 was passed on 30.12.2018 accepting the return of income at Rs.6,34,920/-. 4. On perusal of the case records, Pr. CIT (Central) Ahmedabad (Pr. CIT) noticed that the assessee and other members of JP Iscon Group had traded in scrip named "Looks Health Care Services Ltd'. It was also ascertained in the post search proceedings that the assessee had sold 66,000 shares of 'Looks Health Care Services Ltd for an amount of Rs.2,75,53,600/- in the A.Y. 2014-15 which was claimed as exempt. Further, from the verification of the case records, it appears that the AO has not examined the genuineness of long term capital gain claimed exempt u/s 10(38) of the Act from the sale of shares of 'Looks Health Care Services Ltd.' and no action was taken and no addition was made on account of the same. In the assessment order no mention is made regarding acceptance of reply filed by the assessee dated 12-12-2018. In view of the above, Pr. CIT initiated proceedings u/s 263 of the I.T. Act, 1961 and issued notice dated 17-03-2021 to the assessee. 5. Before, the Ld. Pr. CIT, the assessee submitted the Ld. AO during the course of assessment proceedings u/s. 153A vide notice u/s. 142(1) dated 11.12.2018 specifically asked with respect to the claim of LTCG on sale of shares M/s. Looks Health Care Service Ltd and the appellant submitted detailed reply dated 12-12-2018 along with relevant documents and explanation in respect of claim of Long Term Capital Gain u/s. 10(38) of the Act from sale of shares of " Looks Health Care Services Ltd" and hence the allegation of the Ld. PCIT that the Ld. AO has not examined the I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 5 genuineness of the long term capital gain claimed u/s. 10(38) of the Act is incorrect as the Ld.AO issued detailed show cause notice running into 12 pages in relation to scrip of " Looks Health Care Service Ltd". Since, the Ld. AO has examined various details and explanations provided during the course of assessment proceedings from time to time and after due application of mind to such details and explanation he passed assessment order, it cannot be said that the order passed in erroneous and prejudicial to the interests of the Revenue. 6. The Ld. Pr. CIT however rejected assessee’s arguments and held that the order passed by the Ld. AO is erroneous and prejudicial to the interests of the Revenue by holding as under “8. I have carefully and thoroughly gone through the submission of the assessee. The contentions of the assessee stated in its reply are not acceptable for the following reason:- The assessee contended that all the relevant documents and explanation in respect of the claim of long-term capital gain u/s 10(38) of the Act from the sale of shares of "Looks Health Care Services Ltd" was submitted vide reply dated 12.12.2018. In this case, on perusal of records, it is seen that the Assessing Officer has allowed claim of long term capital gain u/s 10(38) of the Act from the sale of shares of "Looks Health Care Services Ltd" without examining the genuineness of long term capital gain claimed exempt u/s. 10(38) of the Act and no action taken nor any decision made for the assessee’s I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 6 reply dated 12-12-2018 and no addition was made on account of the same. Further, in the assessment order no mention made regarding acceptance of reply. Hence, on this issue the order of the Assessing Officer is erroneous and prejudicial to the interest of revenue. 9. The assessee has relied on various judgments in support of its claim. The facts of this case are different from the decision relied on by them. Therefore, the decision relied on by them are not applicable in this case. The other arguments stated in its reply are in general nature. 9.1 The Hon'ble Apex Court has upheld the validity of action u/s.263 in case no proper enquiry has been made by the A.O. [Malabar Industries Co. Ltd. Vs. CIT, 243 ITR 83 (S,C.)]. In this connection, it is also pertinent to mention here that an Explanation 2(a) has been inserted below section 263(1) which states as under: "[Explanation 2. - For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner, - 1. The order is passed without making inquiries or verification which should have been made." 9.2 In view of the above and looking to the facts of the case under consideration, it is found that the fact of this case is similar to facts of the case of Malabar Hills whereas Hon'ble Supreme Court has upheld the decision of High Court in favour of Revenue. In case law as stated I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 7 supra, the Hon'ble Supreme Court has held that where the Assessing Officer has accepted entry in statement of account filed by the assessee, in absence of any supporting material without making any enquiry, exercise of jurisdiction by Commissioner under Section 263(1) was justified. This particular ratio of the judgment of Hon'ble apex Court, along with the provisions of Explanation 2(a) below section 263(1), makes it clear that the AO's orders were erroneous in so far as they are prejudicial to the interest of revenue. In this regard, it is reiterated that monetary quantum is not the only criteria to decide whether the order passed by the A.O. is prejudicial to the interest of revenue. Therefore, the only criteria to decide whether the order passed by the A.O. is prejudicial to the interest of revenue, is whether the A.O. has gone into the crux of the matter, made proper inquiries and made well reasoned and sustainable addition. Further, Hon’ble Apex Court in the case of Mahalaxmi Sugar Mills, 160 ITR 920(SC) has held that the there is a duty cast on the ITO to determine the true figures of assessee’s taxable income and the consequential tax effect. In the present case, the funds were borrowed for purchase of share, which was returned back immediately after LTCG. This indicates the intention of assessee to create capital without any cost or tax. The Assessing Officer has not examined the potential of M/s Looks Health Care Services Ltd and its balance-sheet with reference to sudden price rise in its share. No enquiries made with reference to the trading pattern in the market in the shares of I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 8 company, its other buyers and shares, whether sudden jump in price just before sale. It is also not examined whether any investigation/enquiry has taken place to ascertain the genuineness of company and sales of shares. I also rely upon the case of Udit Kalra, Suman Poddar Vs ITO, ITA 841/2019 by Hon'ble Delhi High Court and Sanjay Bemalchand Jain Vs ITO 4(2), Nagpur (Ban HC) where share transaction have been held bogus and only an entry. Further, there is plethora of judgements in the favour of revenue on this issue. 10. In the light of facts and circumstances narrated above and in law, I hold that the Assessing Officer has erred in making a proper assessment in this case. The assessment order is, therefore, erroneous in as much as it is prejudicial to the interest of Revenue. Hence, in exercise of power conferred in me u/s.263 of the Act, set aside the assessment order passed u/s. 153A r.w.s 143(3) of the I.T. Act, 1961 on 30.12.2018 for the A.Y.2014-15. The Assessing Officer is directed to verify/examine the claim of exemption u/s 10(38) of the Act in respect of long term capital gain from the sale of shares of "Looks Health Care Services Ltd" on the lines suggested in foregoing paragraph and pass the assessment order after giving a reasonable opportunity to the assessee of being heard.” 7. Before us, the Ld. Counsel for the assessee submitted that proceedings u/s. 153A were carried on in respect of the assessee and order u/s 143(3) of the I.T. Act for A.Y.2014-15 was passed on 30.12.2018 accepting the return of income at Rs.6,34,920/- after due application of mind. The Counsel drew I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 9 our attention to Para 1 and 2 of CIT(A) order to submit that the entire issue has been considered in detail by Ld. AO. in the assessment proceedings. The Counsel drew our attention to copy of notice dated 11-12-2018 issued by Ld. AO at pages 55 to 66 of Paper Book-I, wherein a detailed questionnaire was given to the assessee requiring details of purchase and sale of scrip named "Looks Health Care Services Ltd'. The Counsel submitted that whatever allegations have been mentioned by Ld. Pr. CIT in the 263 notice are also part of the above notice dated 11-12-2018 issued by Ld. AO. The Counsel then drew our attention to detailed response filed the assessee in response to the above notice dated 12-12-2018 at pages 67 to 75 of the Paper Book-I for AO’s consideration. The Counsel submitted that all the Ld. AO’s queries regarding the company and rationale behind investment in the scrip, details of shareholders of the company, the fact that transaction took place on listed stock exchange, all transactions took place through banking channels, details of share capital and details of revenue from operations of the company etc. were furnished during the course of assessment proceedings and duly considered by Ld. AO while passing the assessment order. The Counsel for the assessee invited our attention to Para 3, page 2 of assessment order, wherein the Ld. AO made mention of the above notice dated 11-12-2018 ( in which he had enquired into details of the scrip namely M/s Looks Health Care Services Ltd.) to contend that the Ld. AO had given due application to the issue of investment made in the aforementioned scrip. The Counsel further submitted that while passing order u/s 153A of the Act, views of Ld. Jt. CIT are also sought and therefore, the assessment order passed u/s 153A r.w.s. 143(3) of the Act was passed after due application of mind. The Counsel relied on the Ahmedabad ITAT decision in the case of Anupama I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 10 Bharat Gupta v. ITO in ITA No. 1685/ Ahd/ 2018 (at para 10) to contend that when from perusal of notice it is evident that the Ld. AO had called for details of investment made by the assessee by issuance of a notice, then it cannot be said that AO has not applied his mind while allowing the claim of the assessee if he has not discussed each and every aspect in detail in the assessment order. 8. The Ld. DR in response submitted that the assessment order is a summary order and if the AO made any enquiries, they are not visible from the records of the assessment order. He relied on observations made by Pr. CIT in the 263 order and submitted that the order passed is erroneous and prejudicial to the interests of the Revenue. 9. We have heard the rival contentions and perused the materials available on record. The issue for consideration before us is the scope of enquiry under Explanation 2(a) to section 263 and whether in the instant facts can it be said that the order is passed by Ld. AO is without making inquiries or verification which should have been made, and hence erroneous and thus requiring revision by Pr. CIT u/s 263 of the Act. 9.1 An inquiry made by the Assessing Officer, considered inadequate by the Commissioner of Income Tax, cannot make the order of the Assessing Officer erroneous. In our view, the order can be erroneous if the Assessing Officer fails to apply the law rightly on the facts of the case. As far as adequacy of inquiry is considered, there is no law which provides the extent of inquiries to be made by the Assessing Officer. It is Assessing Officer’s I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 11 prerogative to make inquiry to the extent he feels proper. The Commissioner of Income Tax by invoking revisionary powers under section 263 of the Act cannot impose his own understanding of the extent of inquiry. There were a number of judgments by various High Courts in this regard. 9.2 Delhi High Court in the case of CIT Vs. Sunbeam Auto 332 ITR 167 (Del.), made a distinction between lack of inquiry and inadequate inquiry. The Hon’ble court held that where the AO has made inquiry prior to the completion of assessment, the same cannot be set aside u/s 263 on the ground of inadequate inquiry “12. ..... There are judgments galore laying down the principle that the Assessing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between “lack of inquiry” and “inadequate inquiry”. If there was any inquiry, even inadequate, that would not by itself, give occasion to the Commissioner to pass orders under section 263 of the Act, merely because he has different opinion in the matter. It is only in cases of “lack of inquiry”, that such a course of action would be open. ——— From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 12 Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualised where the Income- tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at conclusion and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion. There must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 13 15. Thus, even the Commissioner conceded the position that the Assessing Officer made the inquiries, elicited replies and thereafter passed the assessment order. The grievance of the Commissioner was that the Assessing Officer should have made further inquires rather than accepting the explanation. Therefore, it cannot be said that it is a case of ‘lack of inquiry’.” 9.3. In Gabriel India Ltd. [1993] 203 ITR 108 (Bom), law on this aspect was discussed in the following manner (page 113) “ The consideration of the Commissioner as to whether an order is erroneous in so far as it is prejudicial to the interests of the Revenue, must be based on materials on the record of the proceedings called for by him. If there are no materials on record on the basis of which it can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well- accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity. I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 14 9.4 The Mumbai ITAT in the case of Sh. Narayan Tatu Rane Vs. ITO, I.T.A. No. 2690/2691/Mum/2016, dt. 06.05.2016 examined the scope of enquiry under Explanation 2(a) to section 263 in the following words: “20. Further clause (a) of Explanation states that an order shall be deemed to be erroneous, if it has been passed without making enquiries or verification, which should have been made. In our considered view, this provison shall apply, if the order has been passed without making enquiries or verification which a reasonable and prudent officer shall have carried out in such cases, which means that the opinion formed by Ld Pr. CIT cannot be taken as final one, without scrutinising the nature of enquiry or verification carried out by the AO vis-à-vis its reasonableness in the facts and circumstances of the case. Hence, in our considered view, what is relevant for clause (a) of Explanation 2 to sec. 263 is whether the AO has passed the order after carrying our enquiries or verification, which a reasonable and prudent officer would have carried out or not. It does not authorise or give unfettered powers to the Ld Pr. CIT to revise each and every order, if in his opinion, the same has been passed without making enquiries or verification which should have been made. In our view, it is the responsibility of the Ld Pr. CIT to show that the enquiries or verification conducted by the AO was not in accordance with the enquries or verification that would have been carried out by a prudent officer. Hence, in our view, the question as to whether the amendment brought in by way of Explanation 2(a) I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 15 shall have retrospective or prospective application shall not be relevant. 9.5 Before deciding the issue, it would be useful to refer to some Supreme Court decisions on this subject which would throw useful light on the scope of enquiry under Explanation (a) to section 263 of the Act. 9.6 Recently the Supreme Court of India in the case of Principal Commissioner of Income-tax, Surat-2 v. Shreeji Prints (P.) Ltd.[2021] 130 taxmann.com 294 (SC) dismissed SLP filed by the assessee against order passed by High Court holding that where assessee-company had received unsecured loans from two different companies and Assessing Officer had made inquires in detail and accepted genuineness of same, such view of Assessing Officer being a plausible view could not be considered erroneous or prejudicial to interest of revenue. The facts of this case were that respondent assessee has filed its return of income showing total income of Rs. 62,55,900/- which was assessed under section 143(3) of the Act, 1961 by an assessment order dated 14th March 2016. The respondent company received unsecured loans from M/s. Georgett Tradecom Pvt Ltd and M/s. Purba Agro Food Pvt Ltd amounting to Rs. 2.49 Crore and the Assessing Officer allowed these unsecured loans. The Principal Commissioner of Income-tax invoked section 263 of the Act, 1961 for revising the assessed income of the respondent assessee. It was noticed by the PCIT that the unsecured loans obtained by the respondent assessee are shown as investment in the name of the assessee in the share application as well as in the balance sheet of the respective companies. The PCIT passed an order I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 16 under section 263 of the Act directing the Assessing Officer to pass fresh assessment order under section 143(3) of the Act, 1961 on the aspect of unsecured loans shown by the respondent assessee. The Hon’ble Supreme Court made the following observation while deciding in favour of the assessee: “Thus, the Tribunal has considered in detail the aspect of revisional power to be exercised by the PCIT in the facts of the case and has given a finding of facts that the Assessing Officer has made inquiries in detail and after applying mind, accepted the genuineness of loans received by the respondent assessee from the aforesaid two companies and such view of the Assessing Officer is a plausible view, and therefore, the same cannot be said to be erroneous or prejudicial to the interest of the Revenue.” 9.7 The Supreme Court in another recent case of Principal Commissioner of Income-tax 2 v. Shree Gayatri Associates*[2019] 106 taxmann.com 31 (SC), held that where Pr. CIT passed a revisional order making addition to assessee's income under section 69A in respect of on- money receipts, however, said order was set aside by Tribunal holding that AO had made detailed enquiries in respect of on-money receipts and said view was also confirmed by High Court, SLP filed against decision of High Court was liable to be dismissed. The facts of this case were that pursuant to search proceedings, assessee filed its return declaring certain unaccounted income. The Assessing Officer completed assessment by making addition of said amount to assessee's income. The Principal Commissioner passed a revisional order under section 263 on ground that Assessing Officer had I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 17 failed to carry out proper inquiries with respect to assessee's on money receipt. In appeal, the Tribunal took a view that Assessing Officer had carried out detailed inquiries which included assessee's onmoney transactions and Tribunal thus set aside revisional order passed by Commissioner. The High Court upheld Tribunal's order. The Supreme Court while dismissing the SLP filed by the Department held as under: “We have heard learned counsel for the Revenue and perused the documents on record. In particular, the Tribunal has in the impugned judgment referred to the detailed correspondence between Assessing Officer and the assessee during the course of assessment proceedings to come to a conclusion that the Assessing Officer had carried out detailed inquiries which includes assessee's on-money transactions. It was on account of these findings that the Tribunal was prompted to reverse the order of revision. No question of law arises. Tax Appeal is dismissed” 9.8 The Supreme Court in the recent case of Principal Commissioner of Income-tax-2, Meerut v. Canara Bank Securities Ltd[2020] 114 taxmann.com 545 (SC), dismissed the Revenue’s SLP holding that 263 proceedings are invalid when AO had made enquiries and taken a plausible view in law, with the following observations: “Having heard learned counsel for the parties and having perused the documents on record, we see no reason to interfere with the view of the Tribunal. The question whether the income should be I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 18 taxed as business income or as arising from the other source was a debatable issue. The Assessing Officer has taken a plausible view. More importantly, if the Commissioner was of the opinion that on the available facts from record it could be conclusively held that income arose from other sources, he could and ought to have so held in the order of revision. There was simply no necessity to remand the proceedings to the Assessing Officer when no further inquiries were called for or directed” 9.9 The Supreme Court in the case of Principal Commissioner of Income-tax- -8 Mumbai v. Sumatichand Tolamal Gouti [2019] 111 taxmann.com 287 (SC) held that where High Court upheld Tribunal's order holding that AO had made detailed enquiries while allowing assessee's claim for deduction of business expenditure and, thus, revisional order passed by Commissioner was not sustainable, SLP filed against High Court's order was liable to be dismissed. The facts of this case were that in course of assessment, Assessing Officer allowed assessee's claim for deduction of certain expenditure on purchase of CDs on Jain Religion by expending an amount of Rs. 10.4 crores, after due examination. The Commissioner passed revisional order holding that Assessing Officer had not carried out any enquiries as to nature of expenditure being capital or not. The Tribunal, however, allowed assessee's appeal holding that Assessing Officer had carried out detailed enquiries and taken a view which was a plausible view. Accordingly, Tribunal set aside revisional order passed by Commissioner. The High Court upheld order passed by Tribunal. The Supreme Court on consideration of above facts held that SLP filed against High Court's order I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 19 was to liable to be dismissed. The Supreme Court made the following observations, while passing the order: “It is by now well settled that, the Commissioner can exercise revisional powers under Section 263 of the Act only when it is found that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of Revenue. In the present case, the Tribunal noted the observations of the Assessing Officer in the order of remand to the effect that Jain munis do not advocate spread of religion through use of computers, source of electronic media is usually shunned, very small section of the community uses computer technology for religious purposes as plenty of printed literature is available in the market. All these factors led to the market value of the CDs declining dramatically. It was on account of these reasons, that the assessee had incurred substantial loss arising out of reduction in the value of stock lying at the end of the year. The Tribunal, therefore noted that the Assessing Officer had carried out detailed enquiries and taken a plausible view.” 9.10 Now in the facts before us the case of the assessee, order was passed u/s 153A of the Act r.w.s. 143(3) of the Act. We note that during the course of assessment proceedings, the Ld. AO made detailed enquiries on this issue of LTCG on sale of shares of M/s Looks Health Care services Ltd. vide notice dated 11-12-2018 and assessee filed detailed response vide reply dated 12-12-2018. The Ld. AO in the assessment order made specific mention of the aforesaid notice dated 11-12-2018 (wherein he had issued a detailed questionnaire enquiring into sale of shares of M/s Looks Health I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 20 Care services Ltd.) and after consideration of the written submissions filed by the assessee and documents / evidence placed on record, the Ld. AO accepted the return filed by the assessee and allowed exemption from LTCG on sale of shares of M/s Looks Health Care services Ltd. u/s 10(38) of the Act. The Pr. CIT initiated 263 proceedings on the ground that the AO has passed order in a hurried manner without making proper enquiring and verification. It is not the case of the Pr. CIT that the Ld. AO did not apply his mind to the issue on hand or he had omitted to make enquiries altogether or had taken a view which was not legally plausible in the instant facts. In the instant set of facts, the Ld. AO had made detailed enquiries vide notice dated 11-12-2018 and Ld. AO vide reply dated 12-12-2018 submitted that the transaction of purchase and sale of shares were duly supported by contract notes, demat account and payments were made through banking channel, assessee produced details of share-holders, details of revenue earned by the company over the years and gave a detailed rationale for investment in shares of M/s Looks Health Care services Ltd. After consideration of material placed on record, Ld. AO allowed claim of exemption on sale of shares of M/s Looks Health Care services Ltd. u/s 10(38) of the Act. Now on the issue that the Ld. AO passed a cryptic order and did not discuss in detail regarding assessee’s claim of the allowability of exemption u/s 10(38) of the Act on sale of shares of M/s Looks Health Care services Ltd, in our view it is a well settled position of law that if from the assessment records, it is evident that the Ld. AO has made due enquiries in response to which assessee has filed detailed submissions, then even if the assessment order does not discuss all aspects in detail with regards to claim of the assessee, it cannot be held that the order is erroneous and prejudicial I.T.A No. 54/Ahd/2021 A.Y. 2014-15 Page No. Kavita Jayeshkumar Kotak vs. Pr. CIT(Central) 21 to the interests of the Revenue. The above proposition has been upheld in the case of CIT v. Reliance Communication 69 taxmann.com 109 (Bombay), Smt. Anupama Bharat Gupta v. ITO in ITA 1685/Ahd/ 2018, Goyal Private Family Specific Trust [1988] 171 ITR 698, CIT v. Mahendra Kumar Bansal [2008] 297 ITR 99 (All.) (para 10) etc. We thus find no error in the order of Ld. AO so as to justify initiation of 263 proceedings by the Ld. Pr. CIT. The Ground of appeal raised by the assessee is thus allowed. 10. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 28-04-2022 Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 28/04/2022 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/ आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद