Direct Media Distribution Ventures Pvt. Ltd. Vs Pr. CIT (ITAT Mumbai)
We find that the ld CIT at the beginning of his show cause notice stated that no enquiry was made by the ld AO in the instant case on the subject mentioned transactions of gift of shares of Dish TV India Ltd by assessee to its related concern. But in the final para of his order stated that the ld AO had concluded without making proper enquiries. This shows the complete departure by the ld CIT from his show cause notice. We find that by his version in final para of his order, the ld CIT had conceded the fact that the ld AO had indeed made enquiries on the impugned issue of transfer of shares by way of gift to another related concern. Hence once an issue which had been enquired by the ld AO and assessee having given detailed reply explaining the purpose, factual and legal position thereon and ld AO having taken a possible view thereon, it cannot be said that the order passed by the ld AO is erroneous and hence no revision proceedings u/s 263 of the Act would lie on the same. The Hon’ble Supreme Court had categorically held that the twin conditions are to be satisfied cumulatively by the ld CIT before invoking his jurisdiction u/s 263 of the Act viz (i) order of the AO should be erroneous and (ii) it should be prejuducial to the interests of the revenue. In the instant case, the aforesaid detailed observations go clearly to prove that the order of the ld AO cannot be construed as erroneous. Hence the revision order passed by the ld CIT u/s 263 of the Act deserve to be quashed and is hereby quashed.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal in ITA No.2211/Mum/2019 for A.Y.2014-15 preferred by the order against the revision order of the Id. Principal Commissioner of Income Tax-6, Mumbai u/s.263 of the Act dated 14/03/2019 for the A.Y.2014-15.
2. Though the assessee had raised several grounds of appeal, the effective issue involved in this appeal is as to whether the Id CIT was justified in invoking revisionary jurisdiction u/s 263 of the Act in the facts and circumstances of the case.
3. The brief facts of this appeal are that the assessee is engaged in the media distribution business of all type, form and manner including distribution of television channels via cable network and / or satellite system etc. The assessment was originally completed u/s 143(3) of the Act on 27.12.2016 determining total loss of Rs 9,85,38,256/- after making disallowance u/s 14A of the Act to the tune of Rs 1,56,966/-. Later this assessment was sought to be revised by the ld CIT u/s 263 of the Act by treating the order framed by the ld AO as erroneous in as much as it is prejudicial to the interests of the revenue. Accordingly, a show cause notice was issued by the ld CIT as under:-
Office of the
PRINCIPAL COMMISSIONER OF INCOME TAX – 6,
Room No. 507: 5th floor, Aayakar Bhavan, Maharshi Karve Road,
Mumbai 400020
No. Pr. CIT-6/2 63/Direct Media/2017-18
30th October, 2017
The Principal Officer.
M/s. Direct Media Distribution Ventures Pvt Ltd, 135, Continental Buiiding,
Dr. Annie Besant Road,
Mumbai-400018
Sir,
Sub: Notice u/s 263 of the I. T.Act, 1961 in the case of M/s Direct Media Distribution Ventures Pvt. Ltd for A. Y. 2014-15-Reg. –
In this case assessment was completed u/s 143(3) of the I T.Act, 1961 on 27.12.2016 determining total loss at Rs, (-) 9,85,38,260/- against total less as per return of income of the assessee of Rs. (-) 9,86,95,222A. There has been only one addition of Rs. 1,56,966/- u/s 14A. During the course of assessment proceedings, in the submission dated 16.12.2016, you have submitted the following calculation for the loss on sale of non current investment as follows:
