Suresh Kantilal Thakkar Vs PCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that assessment order passed by AO without conducting adequate inquiry is erroneous and prejudicial to the interest of revenue and hence revisionary proceeding under section 263 rightly invoked by PCIT.
Facts- The case of the assessee was reopened u/s. 147 of the Act on information received from DDIT (Inv.) and the assessment u/s. 147 of the Act was finalized on 29.03.2022, by accepting the returned income.
Thereafter, the PCIT observed that the assessee has undertaken transaction of trading in shares of M/s. Excel Castronics Ltd., (ECL) during the impugned assessment year, which was found to be a company stock. The modus operandi of the whole business is to facilitate introduction of unaccounted income in the form of exempt capital gain or short term capital loss, over the years. The assessee was found to be one of the beneficiaries of such transaction by trading in the scrip of ECL. PCIT after taking the submissions of the assessee on record set-aside the assessment order as being erroneous and prejudicial to the interest of the Revenue.
Conclusion- Held that in the assessment order the Assessing Officer has failed to enquire into these important aspects regarding treatment of LTCL on sale of shares of ECL and LTCG on sale of shares of Saya which were both not reflecting in the return of income, and therefore, the assessment order passed by the Assessing Officer is erroneous in so far as prejudicial to the interest of Revenue. The Assessing Officer is, therefore, directed to carry out a de-novo assessment in accordance with law, after giving due opportunity of hearing to the assessee.
