Kishore Kumar Gurnani Vs ACIT (ITAT Jaipur)
Both assessees had sold equity shares of M/s Vankon Moduler Pvt. Ltd. & declared capital gains after computing fair market value @ ₹32 per share. Their assessments were completed u/s 143(3) after compulsory scrutiny, where AO issued notices u/s 143(2) & 142(1) & specifically recorded that he had examined all details & verified the facts, & accordingly accepted the returned income.
PCIT invoked revision u/s 263, holding that AO passed the orders in a “routine & casual manner” without verifying the FMV of shares. According to PCIT, the FMV should have been ₹45.54 per share, & AO ought to have recomputed capital gains. He set aside the assessments & directed AO to redo verification of FMV.
Before the Tribunal, Assessees argued that all documents relating to share valuation, sale consideration, working of capital gains & supporting evidence were duly submitted during the assessment, & AO had taken a conscious & informed view after due enquiry. Therefore, invoking Section 263 merely because PCIT desired “deeper enquiry” was unjustified. Reliance was placed on Ganpat Ram Bishnoi (Raj HC) & Malabar Industrial Co. Ltd. (SC), which held that once AO conducts enquiry & takes a plausible view, PCIT cannot revise just to make further enquiry.
