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TAXAP/1042/2010 3/ 3 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 1042 of 2010
=========================================================
COMMISSIONER
OF INCOME TAX-III - Appellant(s)
Versus
AJAY
D SHRIDHAR - Opponent(s)
=========================================================
Appearance
:
MRS
MAUNA M BHATT for
Appellant(s) : 1,
None for Opponent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS JUSTICE SONIA GOKANI
Date
: 06/09/2011
ORAL
ORDER
(Per
: HONOURABLE MR.JUSTICE AKIL KURESHI)
1.0 The
revenue has filed this appeal challenging the judgment of the
Tribunal dated 30th October, 2009 raising following
question for consideration.
” Whether
the Appellate Tribunal is right in law and on facts in setting aside
the order passed by the CIT u/s.263 of the I.T.Act?”
2.0 From
the question itself it is apparent that the issue pertains to the
legality of the Commissioner’s exercise of powers under section 263
of the Income Tax Act. Once the Assessing Officer framed the scrutiny
assessment, such order was taken in revision by the Commissioner
under section 263 of the Act. After issuing notice and hearing the
assessee, the Commissioner recorded his reasons for revising the
order passed by the Assessing Officer on the ground that the same is
erroneous and prejudicial to the interest of Revenue.
3.0 The
issue was carried in appeal by the assessee before the Tribunal. The
Tribunal struck down the order observing that from the record it
emerges that there were several letters issued by the Assessing
Officer raising queries which were complied by the assessee. The
assessee was required to file fund flow statement date-wise for the
borrowed amount either with interest or without interest and the
date-wise amounts advanced by the assessee. The assessee was also
required to file a copy of any banakhat or agreement for proposed
purchase of the land for which money was claimed to have been
advanced to the assessee. It was eventually thereafter the Assessing
Officer held that the interest expenditure claimed by the assessee
cannot be denied since the assessee had several interest with funds
otherwise available. On this issue, the Commissioner formed a
different opinion. However, the Tribunal on facts as well as on the
ground that in the notice itself issued by the CIT (Appeals) certain
aspects were not included, found that the order was not sustainable.
The Tribunal recorded that the CIT (Appeals) observed that no
evidence was adduced to show that the advances received from Chennai
parties were utilized interest free loans, however, this issue has
not been considered by the CIT (Appeals) in the show cause notice.
Inter alia on this ground, the Tribunal was pleased to set aside the
order of the Commissioner passed under section 263 of the Income Tax
Act, 1961.
4.0 We
are broadly in agreement with the Tribunal. The issue is based
primarily on facts. The Tribunal having examined the materials on
record came to the conclusion that the order of the Commissioner was
not sustainable.
5.0 Since
there is no question of law arising, Tax Appeal is dismissed.
[AKIL
KURESHI, J. ]
[Ms.
SONIA GOKANI, J.]
Amit
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