CA Prarthana Jalan
Hon’ble Delhi ITAT while deciding a case involving issue of sec 263 of the Income Tax Act,1961 has held that A.O. is not only an adjudicator but also an investigator.The observation of the Hon’ble bench is as under :-
It is settled law that that frequency and magnitude of transaction are also important factor to decide whether the transaction is business transaction or investment transaction. Now in our considered opinion, the magnitude of share transaction in this case does call for any enquiry on the part of the AO as to whether these are investments transactions or business transactions. A.O. is not only an adjudicator but also an investigator. We find that AO has totally failed to make any enquiry. In these circumstances, we find that the invocation of section 263 by the Ld. CIT is correct and accordingly we hold that the Ld. CIT has rightly asked the AO to examine this aspect.
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