Case Law Details
Brief of the Case
ITAT Mumbai held In the case of M/s Vidyasagar Enterprises LLP vs. Principal CIT that AO accepted the loss s263ustained by the assessee in this project to be allowed to be set off against other income of the assessee after application of mind and considering relevant material on record which was one of the plausible view taken by the AO which view cannot be considered as an erroneous view. The CIT also has not brought on record that how the view undertaken by the AO could be considered as erroneous and prejudicial to the interest of Revenue. We, therefore, hold that the order passed by the CIT u/s 263 is not sustainable in law.
Facts of the Case
The assessee company is engaged in the business of renting of immovable property and development of property. The assessee company case was selected for scrutiny and the assessment order dated 01st March 2013 was passed by the AO u/s 143(3). Further notice u/s. 263 was issued to the assessee on 13th March 2015 by the CIT and the assessee company was called upon to explain about inadequate sale price in case of sale of immovable property. The assessee submitted that it was a disputed property so there was no proper realization. The CIT, there-after, examined the records of assessment and observed that the Assessing Officer has not examined two issues, in the course of assessment proceedings and they have important bearing on the assessment of the correct income of the assessee company. The CIT held that the AO has failed to verify the correctness of loss declared by the assessee company in the construction project. The AO has also not examined the comparative selling rate of immovable properties in Dist. Gandhinagar, Gujarat. Thus, the loss of construction project declared by the assessee company has been accepted by the AO without verification.
Further the CIT called for and examined the assessment records and observed that the AO has issued two notices u/s 133(6) calling for details from M/s. Silverline Enterprise which notices were duly served but there are no evidence on record of compliances of these notices and hence, creditworthiness of M/s Silverline Enterprise was not examined by AO. Thus, the CIT held that the assessment order dated 01.03.2013 passed u/s 143(3) by the AO is considered erroneous and prejudicial to the interest of the Revenue and is set aside to the extent mentioned in the reasons given above for which the directions were issued to AO to examine these issue afresh and issue fresh assessment order.
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