Sona Alloys Private Limited Vs Jurisdictional Officer –DCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that invocation of revisionary proceedings under section 263 of the Income Tax Act merely taking second opinion unjustified. Further, view taken by AO cannot be set aside or deferred as per provisions of section 263.
Facts- During the assessment proceedings, AO made various additions and disallowances and passed the assessment order. Being aggrieved by the Assessment Order, the assessee filed appeal before the PCIT. The PCIT directed the Assessing Officer to pass a fresh Assessment Order thereby invoking Section 263 of the Act. The PCIT while invoking Section 263 of the Act has observed that AO has not taken into account the difference in closing stock and besides these unsecured loans received from various parties amounting to Rs.71 ,42,1 1,010/- was also not proved by the assessee. Thus, the PCIT observed that the Assessment Order passed by AO is erroneous and prejudicial to the interest of Revenue.
Conclusion- Held that invocation of Section 263 of the Act by the PCIT in respect of difference in valuation of the stock amounting to Rs.6,38,93,21 8/- relating to Closing Stock has already been taken into account by the Assessing Officer and, therefore, merely taking second opinion will not attract the provisions of Section 263 of the Act. As relates to unsecured loans amounting to Rs.71 ,42,1 1,010/- under Section 68 of the Act, the assessee has submitted Moratorium which was declared and also has given the details of outstanding loans which was verified before the Corporate Insolvency Resolution process and thus though the same was a not proved by the assessee but the genuineness, credit worthiness and identity has been established during the assessment proceedings as well as before the PCIT and, therefore, invocation of Section 263 of the Act to that effect will also not be called for on the part of the PCIT. Thus, the Assessing Officer has taken a view which cannot be set aside or deferred as per the provisions of Section 263 of the Act as the Assessment Order is not erroneous or prejudicial to the interest of Revenue.
