Provisions of Sec 263 can be invoked merely on the basis of suspicions: Mumbai ITAT


Provisions of Sec 263 can be invoked merely on the basis of suspicionsMumbai ITAT

Bhavna B Kothari Vs ITO
ITA No.3740/Mum/2019
Short Overview of the Case: 
Assessee is individual, filed return of income for relevant AY and complete details of computation of LTCG.
 The assessee earned LTCG on sale of certain shares of single entity namely M/s SRK Industries Ltd.
After appreciating the same and being satisfied with assessee’s claim, the assessment was framed wherein AO chose not to alter the returned income of the assessee.
Subsequently, Pr. CIT, after perusal of case records, noted that the reason for selection of case under scrutiny was suspicious long-term capital gain on shares.
It was seen that there was an information by DGIT (inv.) related to trade by assessee in penny stock. As per the information, the assessee sold 44000 shares of M/s SRK Industries for Rs.80.41 Lacs.
 The assessee, submitted that issue of LTCG was duly examined by AO during the course of regular assessment proceedings.
 The Pr. CIT, not convinced with assessee’s submissions, the assessment order was termed as erroneous and prejudicial to Revenue in terms of Exp -2 to Sec263, the order was set-aside and AO was directed to redo the assessment after giving opportunity of hearing to the assessee.
On appeal, the Tribunal on the issue as to whether provisions of Sec 263 can be invoked merely on the basis of suspicions, observed as under:
 there was due application of mind by AO on the stated issue and the claim was admitted after due verification.
 Merely because the issue was not elaborately discussed in the quantum assessment could not be a ground to invoke revisional jurisdiction u/s 263 particularly when the details called for by AO were submitted and placed on record.