Invocation of jurisdiction u/s 263 on same subject which was duly verified in reassessment proceeding unjustified

Mukesh Agarwal Vs PCIT (ITAT Chennai)

ITAT Chennai held that AO duly verified the subject matter in re-assessment proceedings and concluded that LTCG declared by the assessee is genuine. Accordingly, setting aside the assessment order invoking revisional jurisdiction u/s 263 on the same subject matter unjustified.

Facts- The case has been re-opened u/s. 147 of the Act, for the reasons recorded as per which information received by AO shows that, the assessee is one of the beneficiary of bogus LTCG derived from sale of certain shares through M/s. Onkar Supply Pvt Ltd.

The case has been subsequently taken up for revision proceedings by the PCIT and show cause notice u/s. 263 of the Act, was issued and called upon the assessee to explain as to why the assessment order passed u/s. 143(3) r.w.s. 147 of the Act dated 02.12.2019 should not be revised.

The PCIT, after considering relevant submissions of the assessee and also taken note of certain judicial precedence, opined that assessment order passed by the AO is erroneous in so far it is prejudicial to the interests of the revenue. In so far as the issue of bogus LTCG derived from sale of certain shares through certain companies, it is evident from the fact that Shri. Ashok Kumar Kayan, the broker acted as an entry operator in providing accommodation entries in long term capital gains through various companies. In his sworn statement, he has admitted the fact that, the assessee is one of the beneficiary of such bogus transactions. Therefore, rejected arguments of the assessee and set aside assessment order passed by the AO u/s. 143(3) r.w.s. 147 of the Act dated 02.12.2019, and directed AO to carry out necessary enquiries and to decide the issue in accordance with law.

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