INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Erroneous and prejudicial order - AO took possible view on the matter -

Pr. CIT invoked jurisdiction under section 263 on the ground that assessee had traded in four scrips and incurred loss and these scrips were also part of the 84 penny stock companies investigated by Kolkata IT Department and loss claimed by assessee on these four scrips ought to have been disallowed by AO in view of the findings of Kolkata Investigation Wing of IT Department. Since assessment order was completed without making necessary enquiries and verification in respect of those four scrips, order of AO was erroneous and prejudicial to the interest of revenue. Held: Entire details of profit earned from sale of shares and loss incurred on sale of shares were indeed submitted by the assessee before AO in the course of assessment proceedings. Moreover, assessee during the year had dealt with 160 scrips and out of that, it had incurred losses in respect of 45 scrips during the year. Out of the same, Pr. CIT identified four scrips and decided to treat the said loss as bogus loss in the light of findings of the DIT (Investigation), Kolkata and not based on his independent analysis and undoubtedly said details were indeed filed before AO. AO in examination of details of all the scrips had chosen to disallow loss only in respect of three scrips. Hence, it could be safely concluded that AO had indeed taken a possible view on the matter. Pr. CIT merely because he had got a different view on the same set of facts could not substitute his view in place of the view already taken by AO by invoking his revision jurisdiction under section 263. Therefore, revision order passed under section 263 was set aside.

Followed:Gabriel India Ltd. (1993) 203 ITR 108 (Bom-HC) : 1993 TaxPub(DT) 1357 (Bom-HC) and Nirav Modi (2017) 390 ITR 292 (Bom-HC) : 2016 TaxPub(DT) 3506 (Bom-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2015-16

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