AO's assessm't order held neither erroneous nor prejudicial to int. of revenue.

Facts in Brief:

1. Assessment order was made u/s. 143(3) (of Income Tax Act, 1961), invoking powers conferred upon him u/s. 263 (of Income Tax Act, 1961).

2. In assessment, Assessing Officer mechanically accepted the opening balance and then debits of interest, brokerage, TDS and commission totaling to Rs. 7,37,493/- and accepted the capital gain of Rs. 3,16,843/-, without making any inquiry to verify the allow ability of the claim of assessee.

On appeal CIT(A) held,

3. Assessee’s claim on account of capital gains has been accepted without proper enquiry resulting into underassessment of capital gains.

4. CIT(A) concluded in his show cause notice by observing that the order dated 18.07.2012 passed by the ITO Ward-4(3), Ahmedabad is erroneous in so far as it is pre-judicial to the interest of revenue.

On appeal ITAT held,

5. The Bombay High Court in CIT Vs Gabrial India Ltd., (1993) 203 ITR 108 has held that "the decision of the Income Tax Officer could not be held to be erroneous simply because in his order, he did not make an elaborate discussion in that regard".

6. Considering the facts in totality in the light of the judicial decisions discussed hereinabove, in our understanding of law, the assessment order is neither erroneous nor prejudicial to the interest of the revenue.

7. We, therefore, set aside the impugned order passed by the Ld. Commissioner u/s. 263 (of Income Tax Act, 1961) and restore that of the Assessing Officer passed u/s. 143(3) (of Income Tax Act, 1961). A similar view has also been taken by the jurisdictional High Court of Gujarat in the case of Nirma Chemicals Works P. Ltd. 309 ITR 67.

8. In result, appeal filed by the assessee is allowed. 

Case Reference - Income Tax Appellate Tribunal - Ahmedabad Ginger Properties Pvt. Ltd., , ... vs Assessee.