Case Law Details
Narendra Aggarwal Vs PCIT (ITAT Delhi)
Conclusion: AO had applied his mind to the information and details furnished by the assessee and after considering the information, he was of the view that the short term capital gains had been correctly computed by assessee and accordingly accepted the claim, and, which was a possible view. Only in a very gross case of inadequacy in inquiry or where inquiry was per se mandated on the basis of record available before AO and such inquiry was not conducted, the revisional power so conferred could be exercised to invalidate the action of AO.
Held: In the present case it was an undisputed fact that the return of income for the year under consideration was selected for limited scrutiny under CASS for making inquiries on four issues including the Short Term Capital Gain u/s 111. The issues for which the case of assessee was selected for limited scrutiny, notice u/s 143(2) and 142(1) was issued by AO along with questionnaire and assessee was also asked to submit the various details contained therein. Assessee had inter alia filed the computation of capital gains, details from whom the shares were purchased, their PAN numbers, copies of purchase bills, copies of bank account evidencing payment to sellers, contract note for sale of shares, PAN number and SEBI registration number of the broker, copy of the DMAT account, copy of notice for listing of shares by BSE ledger account in the books of sellers, bank account evidencing payment to sellers, contract note for sale of shares. It was also a fact that the purchasing of shares being off market was also informed to the AO and the complete details from whom they were purchased by assessee was also furnished to AO. AO after examining the aforesaid details and on being satisfied with the queries raised, had accepted the contentions of the assessee and had made no addition on that count. AO had applied his mind to the information and details furnished by the assessee and after considering the information, he was of the view that the short term capital gains had been correctly computed by assessee and accordingly accepted the claim, and, which was a possible view. No material had been placed by the Revenue to demonstrate that the view taken by the AO was wholly unsustainable in law. Further, it was a settled law that the order of the AO could not be branded as erroneous if the Commissioner was not satisfied with the conclusion arrived by AO. The order could be brought within the purview of an erroneous order only if it involved an error by deviating from law or upon erroneous application of the legal principle. PCIT had observed that the present case was a case where it was a clear case of lack of inquiry. It was a settled law that the power of revision could be exercised only where no inquiry as required under the law was done. In the present case, AO had raised various queries and the same were also replied by assessee. In such a situation it could not be said that there was lack of inquiry from the end of AO. Only in a very gross case of inadequacy in inquiry or where inquiry was per se mandated on the basis of record available before AO and such inquiry was not conducted, the revisional power so conferred could be exercised to invalidate the action of AO.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal filed by the assessee is directed against the order dated 31.03.2021 of the Pr. Commissioner of Income Tax – Delhi – 7, (PCIT) New Delhi relating to Assessment Year 2015-16.
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