The New Delhi bench of the Income Tax Appellate Tribunal ( ITAT) quashed the revision order passed without jurisdiction by the Commissioner of Income Tax (Appeals) under section 263 of the Income Tax Act, 1961.
Manohar Lal Sarraf and Sons Pvt. Ltd, the appellant assessee appealed against the order passed by the Commissioner of Income Tax (Appeals) under section 263 of the Income Tax Act on the ground that the order passed by the Assessing Officer under section 143(3) of the Income Tax Act was not as per the law.
Prem Lata Bansal, Vinay Sahni, and Shivang Bansal, the counsels for the assessee contended that the Commissioner had passed the impugned order under section 263 of the Income Tax Act based on audit objection which was contrary to the settled legal position.
It was also submitted that the assessing officer had examined all the details produced before him during the assessment proceedings and then arrived at his conclusions. Thereafter, the Commissioner cannot invoke the revisionary powers under section 263 of the Income Tax Act.
Sarita Kumari, the counsel for the department contended that the assessee had incorrectly claimed the cost of acquisition while calculating the capital gain arising from the sale of the properties and reduced the quantum of capital gain by claiming the indexed cost of an improvement on account of conversion charges which was not properly verified by the assessing officer.
It was also submitted that during the assessment proceedings, the same explanation was submitted before the assessing officer who after considering all the details had concluded that the assessee had correctly computed and declared the capital gain.
The two-member bench comprising Shamim Yahya (Accountant) and Astha Chandra(Judicial) observed that the assessing officer had examined all the records, evidence, supporting documents, and books of account and passed the assessment order only after due diligence and after making the necessary examination and after application of mind.
It was also held that the assumption of jurisdiction by the Commissioner under section 263 of the Income Tax Act was not under the law and is liable to be quashed while allowing the appeal filed by the assessee.
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