IN INCOME TAX APPELLATE TRIBUNAL KOLKATA C BENCH, KOLKATA (Before Sri J. Sudhakar Reddy, Accountant Member & Sri S.S. Viswanethra Ravi, Judicial Member) I.T.A. No. 794/Kol/2019 Assessment Year: 2014-15 Smt. Archana Salarpuria.... ..Appellant Salarpuria Jajodia & Co. 3rd Floor 7, Chittaranjan Avenue Kolkata [PAN : ANBPS7098C] Vs. Assistant Commissioner of Income Tax, Circle-22, Kolkata . ...Respondent Appearances by: Shri S. Jhajaria, FCA, appeared on behalf of assessee. Dr. P.K. Srihari, CIT, Sr. D/R appearing on behalf of Revenue. Date of concluding hearing : July 29th, 2019 Date of pronouncing order : August 28th , 2019 ORDER Per J. Sudhakar Reddy, AM :- This appeal filed by assessee is directed against order of Learned Principal Commissioner of Income Tax, Kolkata - 8, (hereinafter ld. Pr. CIT ), dt. 28/03/2019, passed u/s 263 of Income Tax Act, 1961 (hereinafter Act ), relating to Assessment Year 2014-15. 2. assessee is individual and filed her return of income for Assessment Year 2014-15 on 31/07/2014, declaring total income of Rs.3,70,13,650/-. Thereafter, she filed her revised return of income on 31/05/2015, declaring total income of Rs.4,83,88,250/-. Assessing Officer completed assessment u/s 143(3) of Act on 06/12/2016 accepting returned income. ld. Pr. CIT issued showcause notice u/s 263 of Act, dt. 22/02/2019, proposing to revise order of assessment passed u/s 143(3) of Act on 06/12/2016. assessee gave detailed reply vide letter dt. 08/03/2019. She has filed number of enclosures along with this reply. ld. Pr. CIT, passed order u/s 263 of Act on 28/03/2019, revising assessment order passed u/s 143(3) of Act on 06/12/2016, by holding that said assessment order is erroneous, insofar as, it is prejudicial to interest of revenue. He set aside assessment order only to extent of observations made in this order u/s 263 of 2 I.T.A. No. 794/Kol/2019; Assessment Year: 2014-15 Smt. Archana Salarpuria Act and directed Assessing Officer to pass fresh assessment order by taking into account facts and legal position as discussed by ld. Pr. CIT-8, Kolkata, in impugned order passed u/s 263 of Act. 3. Aggrieved assessee is in appeal before us. 4. ld. Counsel for assessee, Shri Siddhartha Jhajharia, submitted that order passed u/s 263 of Act is bad in law for reason that a) ld. Pr. CIT held that this is suspicious sale transaction and while doing so, he did not rely on any evidence whatsoever that made him come to such conclusion. Thus, it is his case where said conclusion is based on surmises and conjectures. b) ld. Pr. CIT held that purchase bills and sale transactions required verification/investigation. He submitted that this cannot be ground for exercise of jurisdiction by ld. Pr. CIT u/s 263 of Act, as no error prejudicial to interest of revenue in order of assessment is pointed out. c) Assessing Officer in his notice u/s 143(1) of Act, dt. 21/10/2016, at point no. 6, directed assessee to furnish details of sales transactions in shares and that assessee in his reply dt. 16/11/2016, has at point no. 6, annexure B1, B2 & B3, (copies of which were placed in paper book) had furnished all necessary information to Assessing Officer. He further pointed out that vide letter dt. 22/11/2016, details of capital gains were furnished to Assessing Officer. Copies of details were placed in paper book. Thus, he submits that Assessing Officer called for all necessary records and after verifying same had accepted claim of assessee. He submitted that view taken by Assessing Officer was possible view and that it is not case of ld. Pr. CIT that view taken by Assessing Officer was wrong and untenable and hence under these circumstances, exercise of jurisdiction u/s 263 of Act was bad in law. d) That assessee has in its reply to showcause notice issued u/s 263 of Act, brought to notice of ld. Pr. CIT that, assessee had made declaration of transactions of sale of shares to Reserve Bank of India, 3 I.T.A. No. 794/Kol/2019; Assessment Year: 2014-15 Smt. Archana Salarpuria through Vijaya Bank and this declaration also consisted of valuation certificate of shares given by chartered accountant (copy of which was placed at page 208 of paper book) and hence transaction was genuine and at fair value of shares. e) He submits that it is wrong on part of ld. Pr. CIT to conclude that transactions in question were suspicious and that ld. Pr. CIT has no evidence whatsoever, that these stocks in question are penny stocks. f) He submitted that ld. Pr. CIT has not conducted any investigation or verification of transactions by himself and has not pointed out as to what was error committed by Assessing Officer which caused prejudice to interest of revenue. g) That ld. Pr. CIT had made factual mistake in holding that assessee claimed capital loss on purchase and sale of said shares of M/s. Goodwill Griha Nirman Pvt. Ltd., despite assessee verifying same. He relied on number of case-law in support of his contentions, which we would be referring to, as when necessary. 5. ld. CIT D/R, Dr. P.K. Srihari, on other hand, supported order of ld. Pr. CIT and submitted that perusal of assessment order demonstrates non application of mind by Assessing Officer. He argues that it is mandatory on part of Assessing Officer to record reasons as to why particular view has been taken on facts of this case. He submits that Explanation 2(a) to Section 263 of Act, comes into play. He relied on notice issued by ld. Pr. CIT u/s 263 of Act and order passed u/s 263 of Act and case-law referred to in order by ld. Pr. CIT and submitted that order of ld. Pr. CIT is required to be upheld. 6. We have heard rival contentions. On careful consideration of facts and circumstances of case, perusal of papers on record, orders of authorities below as well as case law cited, we hold as follows:- 7. Assessing Officer during course of scrutiny proceedings, in notice given u/s 142(1) of Act on 21/10/2016, directed assessee to furnish details of 4 I.T.A. No. 794/Kol/2019; Assessment Year: 2014-15 Smt. Archana Salarpuria sale transactions in shares. assessee in his reply dt. 16/11/2016, at para 6, stated as follows:- 6. Details of Capital Gain earned on Sales of Shares, as recorded in accounts are enclosed at Annexure B1; details of Capital Gain offered to tax are enclosed at Annexure B2. Details of Profit on Sale of Shares are enclosed at Annexure B3. (Point 6) 7.1. Later assessee submitted following details to Assessing Officer vide his letter dt. 22/11/2016:- 1. Details of Capital Gains offered to tax have been filed with your goodself vide written submission dated 03.11.2016, point 6, Annexure B2. assessee had earned Long Term Capital Gains on sale of land at Jaipur. Details of Long Term Capital Gain on sale Jaipur property, recorded in books of assessee, are enclosed at Annexure A. Copies of Conveyances deeds, with respect to sale of such lands, are enclosed therewith. 2. Details of Capital Gains offered to Lax have been filed with your goodself vide written submission dated 03.11.2016, point 6, Annexure B2. assessee had earned Long Term Capital Gains on sale of shares of M/s. Goodwill Griha Nirman Pvt. Ltd. Copy of Sale Bill, with respect to sale of such shares, is enclosed at Annexure B. 3. Copy of bank statement of assessee, highlighting receipts with respect to sale of land and sale of shares of M/s. Goodwill Griha Nirman Pvt. Ltd. is enclosed at Annexure C. 4. Reconciliation statement with respect to Income and TDS reflecting in Form 26AS vis-a vis same considered in Income Tax Return of assessee, along with copy of Form 26AS is enclosed at Annexure D. 5. Details of Profit on Sale of Shares have been filed with your goodself vide written submission dated 03.11.2016, point 6, Annexure B3. Reconciliation statement with respect to sale of such shares reflecting in Individual Transaction Statement and books of assessee is enclosed at Annexure E. 7.1.1. Copies of all documents in question which were submitted before Assessing Officer, have been filed before us from pages 166 to 188 of paper book. perusal of same demonstrates that Assessing Officer has asked for and obtained all necessary details. Under these circumstances, presumption is that Assessing Officer has examined transactions in question. Non discussion or brief discussion of issue by Assessing Officer in assessment order, under these facts and circumstances of case, does not lead us to conclusion that there is non 5 I.T.A. No. 794/Kol/2019; Assessment Year: 2014-15 Smt. Archana Salarpuria application of mind to issue on hand, specifically when voluminous details were obtained by Assessing Officer after raising specific queries on issue. 7.1.2. Hon ble Jurisdictional High Court in case of Principal Commissioner of Income-tax-5, Kol. v. Ivory Consultants (P.) Ltd. [2018] 96 taxmann.com 539 (Calcutta) held as follows:- Section 43(5), read with sections 73 and 263, of Income-tax Act, 1961 - Speculative transactions (Derivatives) - Assessment year 2011-12 - In course of assessment, Assessing Officer made sufficient inquiries on derivative loss claimed as business loss by assessee - After said inquiries Assessing Officer completed assessment holding that loss from derivative's was genuine loss and had to be allowed as normal business loss - However, Commissioner (Appeals) passed order under section 263 setting aside assessment order on ground that no proper inquiry was made - Tribunal, however, found on facts that inquiry was conducted in proper manner and thus, Tribunal confirmed order passed by Assessing Officer - Whether on facts, impugned order passed by Tribunal was to be confirmed - Held, yes 7.1.3. Hon ble Jurisdictional High Court in case of CIT vs. J.L. Morrison [2014] 366 ITR 593 (Calcutta), held as follows:- As regard submission on behalf of Revenue that power under Section 263 of Act can be exercised even in case where issue is debatable, it was held that case of CIT vs. M. M. Khambhatwala was not applicable. observation that Commissioner can exercise power under Section 263 of Act even in case were issue is debatable was mere passing remark which is again contrary to view taken by Apex Court in thecase of Malabar Industrial Company Ltd. & Max India Ltd. If Assessing Officer has taken possible view, it cannot be said that view taken by him is erroneous nor order of Assessing Officer in that case can be set aside in revision. It has to be shown unmistakably that order of Assessing Officer is unsustainable. Anything short of that would not clothe CIT with jurisdiction to exercise power under Section 263 of Act. CIT vs. M. M. Khambhatwala reported in 198 ITR 144; CIT vs. Ralson Industries Ltd. reported in 288 ITR 322 (SC), not applicable; Malabar Industrial Co. Ltd. v. CIT reported in 243 ITR 83, relied on. (Para 72) As regard third question as to whether assessment order was passed by Assessing Officer without application of mind, it was held that Court has to start with presumption that assessment order was regularly passed. There is evidence to show that assessing officer had required assessee to answer 17 questions and to file documents in regard thereto. It is difficult to proceed on basis that 17 questions raised by him did not require application of mind. Without application of mind questions raised by him in annexure to notice under Section 142 (1) of Act could not have been formulated. Assessing Officer was required to examine return filed by assessee in order to ascertain his income and to levy appropriate tax on that basis. When Assessing Officer was satisfied that return, filed by assessee, was in accordance with law, he was under no obligation to justify as to 6 I.T.A. No. 794/Kol/2019; Assessment Year: 2014-15 Smt. Archana Salarpuria why was he satisfied. On top of that Assessing Officer by his order dated 28th March, 2008 did not adversely affect any right of assessee nor was any civil right of assessee prejudiced. He was as such under no obligation in law to give reasons. fact, that all requisite papers were summoned and thereafter matter was heard from time to time coupled with fact that view taken by him is not shown by revenue to be erroneous and was also considered both by Tribunal as also by us to be possible view, strengthens presumption under Clause (e) of Section 114 of Evidence Act. prima facie evidence, on basis of aforesaid presumption, is thus converted into conclusive proof of fact that order was passed by assessing officer after due application of mind. Meerut Roller Flour Mills Pvt. Ltd. vs. C.I.T., ITA No. 116 /Coch/ 2012; CIT vs. Infosys Technologies Ltd., 341 ITR 293 (Karnataka); S.N. Mukherjee vs. Union of India, AIR 1990 SC 1984; A. A. Doshi vs. JCIT, 256 ITR 685; Hindusthan Tin Works Ltd. Vs. CIT, 275 ITR 43 (Del), distinguished. (Paras 90-92, 102) 7.1.4. Hon ble Bombay High Court in case of CIT vs. Fine Jewellery (India) Ltd. [2015] 372 ITR 303 (Bombay), has held as follows:- 8. We find that impugned order of Tribunal does record fact that specific queries were made during Assessment proceedings with regard to details of expenditure claimed under head "miscellaneous expenses" aggregating to Rs. 2.94 crores. respondent-assessee had responded to same and on consideration of response of respondent-assessee, Assessing Officer held that of amount of Rs. 17.98 lakhs incurred on account of repairs and maintenance out of Rs. 2.94 cores is capital expenditure. This itself would be indication of application of mind by Assessing Officer while passing impugned order. fact that assessment order itself does not contain any discussion with regard to balance amount of expenditure of Rs. 1.76 crores i.e. Rs. 2.94 crores less Rs. 17.98 lakhs claimed as revenue expenditure would not by itself indicate non application of mind to this issue by Assessing Officer in view of specific queries made during assessment proceedings and Respondent- assessee's response to it. In fact this Court in case of "Idea Cellular Ltd. v. Dy. CIT [2008] 301 ITR 407" has held that if query is raised during assessment proceedings and responded to by Assessee, mere fact that it is not dealt with in Assessment Order would not lead to conclusion that no mind had been applied to it. 7.1.5. Assessing Officer while accepting claim of assessee, in our view has taken possible view. ld. Pr. CIT in his order, has not demonstrated as to how view taken is erroneous to extent that it is prejudicial to interest of revenue. Hon ble Supreme Court in case of CIT vs. Kwality Steel Suppliers Complex reported in [2017] 395 ITR 1 (SC), held as follows:- power given to Commissioner to revise order of Assessing Officer is held to be constitutionally valid having regard to fact that department has no right of appeal to Commissioner (Appeals) against any order passed by Assessing Officer. It is for this reason, section 263 is enacted to empower Commissioner with authority 7 I.T.A. No. 794/Kol/2019; Assessment Year: 2014-15 Smt. Archana Salarpuria of revising order of Assessing Officer, where order is erroneous and error has resulted in prejudice to interests of revenue. As is clear from language of section 263, there has to be proper application of mind by Commissioner to come to firm conclusion that order of Assessing Officer is erroneous and prejudicial to interests of revenue. Thus, two conditions need to be satisfied for invoking such power by Commissioner, which are: i) order sought to be revised by Assessing Officer is erroneous; and ii) it is prejudicial to interest of revenue [Para 7] It is clear from above that where two view are possible and Assessing Officer has taken one view and Commissioner again revised said order on ground that he does not agree with view taken by Assessing Officer, in such circumstances assessment order cannot be treated as order erroneous or prejudicial to interest of revenue. Reason is simple. While exercising revisionary jurisdiction, Commissioner is not sitting in appeal. [Para 9] 7.1.6. Applying propositions of law laid down in above case-law to facts of this case, we have to necessarily hold that exercise u/s 263 of Act, by ld. Pr. CIT, is bad in law as there is application of mind by Assessing Officer during assessment proceedings and as Assessing Officer has taken possible view on examination of issue on hand. It cannot be said that view of Assessing Officer is not tenable. 7.2. Further, we find that ld. Pr. CIT in show cause notice dt. 22/02/2019 at para 2 & 3 observed as follows:- 2. On verification, it is observed that Short term & Long term Capital Gains on sale of shares were made by you during period 01.04.2013 to 31.03.2014 and also you had purchased 3500 shares of Goodwill Gridha Pvt. Ltd. on 02.04.2004 for amount of 35000/- and same was sold at Rs.2,51,12,500/- on 02.05.2013. However, from your bank statement amount has been shown to be credited as RTGS by Alayama Mathew. While no purchase bill of share is available on record, sale bill being also internal voucher and keeping in mind quantum of gain vis-a-vis discrepancies pointed above, it was required thorough verification/investigation. Moreover, this being case of suspicious sale transactions in share. Further, from details of shares transaction, it is seen that you had purchased and sold shares with same price and also set off loss arising out of purported sales with Capital Gains made during year which required verification/investigation keeping in mind fact that being case of suspicious sale transactions in shares. Hence, assessment completed u/s.143{3} on 06.12.2016 is erroneous in so far as it is prejudicial to interest of Revenue. 8 I.T.A. No. 794/Kol/2019; Assessment Year: 2014-15 Smt. Archana Salarpuria 3. I, therefore, propose to assume jurisdiction u/s 263 in this case and pass such order, as deemed fit and proper, to safeguard interest of revenue. (emphasis ours) 7.3. Thereafter in his order passed u/s 263 on 28/03/2019 at page 10 para 5, concluded as follows:- 9 I.T.A. No. 794/Kol/2019; Assessment Year: 2014-15 Smt. Archana Salarpuria 7.4. On going through above, we find that assumption of jurisdiction by ld. Pr. CIT u/s 263 of Act in case on hand was on allegation that purchase and sale transactions are suspicious. No evidence is brought on record by ld. Pr. CIT to come to such conclusion. 8. assessee had clarified before Assessing Officer as well as ld. Pr. CIT that shares in question of M/s. Goodwill Griha Nirman Pvt. Ltd., were originally held by Late Shri Rakesh Salarpuria, who passed away on 07/04/2012 and that impugned shares were transmitted to assessee through will which was probated and hence, question of producing purchase bills does not arise and that cost of acquisition to Late Shri Rakesh Salarpuria, was cost of acquisition to assessee. It was further submitted that this transfer of shares were at price as valued by chartered accountant and under those circumstances, allegation that this is suspicious sale transaction is baseless. It was further submitted that value of shares was based on intrinsic value of assets held by company and hence sale value was justified. This explanation supported by evidence proves case of assessee. These replies, in our view, were not properly considered by ld. Pr. CIT. allegations that sale of shares transactions was suspicion is not supported by facts. No revision can take place based on mere suspicion. ld. Pr. CIT has not controverted submissions and evidences filed by assessee. When assesee has furnished all details, including purchase details and sale details, ld. Pr. CIT has not explained, as to how he came to conclusion that there is error that caused prejudice to interest of revenue. There is no verification or enquiry by ld. Pr. CIT of information furnished by assesee to him. ld. Pr. CIT has simply set aside matter to file of Assessing Officer for fresh adjudication, without himself conducting any enquiry into matter. law requires ld. Pr. CIT to himself conduct enquiry and then only come to conclusion that order in question is erroneous and prejudicial to interest of revenue. If ld. Pr. CIT had not applied his mind to replies, details and evidences filed by assessee then order passed, without application of mind or verification is bad in law. 10 I.T.A. No. 794/Kol/2019; Assessment Year: 2014-15 Smt. Archana Salarpuria 9. Hon ble Delhi High Court in case of CIT vs. Sunbeam Auto Ltd. (supra) has held as follows:- 12. We have considered rival submissions of counsel on other side and have gone through records. first issue that arises for our consideration is about exercise of power by Commissioner of Income-tax under section 263 of Income-tax Act. As noted above, submission of learned counsel for revenue was that while passing assessment order, Assessing Officer did not consider this aspect specifically whether expenditure in question was revenue or capital expenditure. This argument predicates on assessment order which apparently does not give any reasons while allowing entire expenditure as revenue expenditure. However, that by itself would not be indicative of fact that Assessing Officer had not applied his mind on issue. There are judgments galore laying down principle that Assessing Officer in assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from record as to whether there was application of mind before allowing expenditure in question as revenue expenditure. Learned counsel for assessee is right in his submission that one has to keep in mind distinction between "lack of inquiry" and "inadequate inquiry". If there was any inquiry, even inadequate, that would not by itself, give occasion to Commissioner to pass orders under section 263 of Act, merely because he has different opinion in matter. It is only in cases of "lack of inquiry", that such course of action would be open. In Gabriel India Ltd.'s case (supra), law on this aspect was discussed in following manner : ". . . From reading of sub-section (1) of section, it is clear that power of suo motu revision can be exercised by Commissioner only if, on examina-tion of records of any proceedings under this Act, he considers that any order passed therein by Income-tax Officer is 'erroneous insofar as it is prejudicial to interests of revenue'. It is not arbitrary or unchartered power. It can be exercised only on fulfilment of requirements laid down in sub-section (1). consideration of Commissioner as to whether order is erroneous insofar as it is prejudicial to interests of revenue must be based on materials on record of proceedings called for by him. If there are no materials on record on basis of which it can be said that Commissioner acting in reasonable manner could have come to such conclusion, very initiation of proceedings by him will be illegal and without jurisdiction. Commissioner cannot initiate proceedings with view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against well-accepted policy of law that there must be point of finality in all legal proceedings, that stale issues should not be reactivated beyond particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity. [See : Parashuram Pottery Works Co. Ltd. v. ITO[1977] 106 ITR 1 (SC) at page 10]. ****** 11 I.T.A. No. 794/Kol/2019; Assessment Year: 2014-15 Smt. Archana Salarpuria From aforesaid definitions it is clear that order cannot be termed as erroneous unless it is not in accordance with law. If Income-tax Officer acting in accordance with law makes certain assessment, same cannot be branded as erroneous by Commissioner simply because, according to him, order should have been written more elaborately. This section does not visualise case of substitution of judgment of Commissioner for that of Income-tax Officer, who passed order unless decision is held to be erroneous. Cases may be visualised where Income-tax Officer while making assessment examines accounts, makes enquiries, applies his mind to facts and circumstances of case and determines income either by accepting accounts or by making some estimate himself. Commissioner, on perusal of records, may be of opinion that estimate made by officer concerned was on lower side and left to Commissioner he would have estimated income at figure higher than one determined by Income-tax Officer. That would not vest Commissioner with power to re-examine accounts and determine income himself at higher figure. It is because Income-tax Officer has exercised quasi-judicial power vested in him in accordance with law and arrived at conclusion and such conclusion cannot be termed to be erroneous simply because Commissioner does not feel satisfied with conclusion. . . . There must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by application of relevant statute on incorrect or incomplete interpretation lesser tax than what was just has been imposed. ****** We may now examine facts of present case in light of powers of Commissioner set out above. Income-tax Officer in this case had made enquiries in regard to nature of expenditure incurred by assessee. assessee had given detailed explanation on that regard by letter in writing. All these are part of record of case. Evidently, claim was allowed by Income-tax Officer on being satisfied with explanation of assessee. Such decision of Income-tax Officer cannot be held to be "erroneous" simply because in his order he did not make elaborate discussion in that regard. 9.1. Hon ble Delhi High Court in case of DIT vs. Jyoti Foundation (supra) , it has been held as follows:- order under Section 263 itself records that Director felt that inquiries were not sufficient and further inquiries or details should have been called. However, in such cases, as observed in case of ITO v. D.G. Housing Projects Ltd. [2012] 343 ITR 329/20 taxmann.com 587/[2013] 212 Taxman 132 (Mag.), inquiry should have been conducted by Commissioner or Director himself to record finding that assessment order was erroneous. He should not have set aside order and directed Assessing Officer to conduct said inquiry. 12 I.T.A. No. 794/Kol/2019; Assessment Year: 2014-15 Smt. Archana Salarpuria 9.2. Hon ble Delhi High Court in case of ITO vs. D.G. Housing Projects Ltd. [2012] 343 ITR 329 (Delhi) held as follows:- In instant case, findings recorded by Tribunal are correct as Commissioner has not gone into and has not given any reason for observing that order passed by Assessing Officer was erroneous. finding recorded by Commissioner is that 'order passed by Assessing Officer may be erroneous'. Commissioner had doubts about valuation and sale consideration received but Commissioner should have examined said aspect himself and given finding that order passed by Assessing Officer was erroneous. He came to conclusion and finding that Assessing Officer had examined said aspect and accepted assessee computation figures but he had reservations. Commissioner in order has recorded that consideration receivable was examined by Assessing Officer but was not properly examined and, therefore, assessment order is 'erroneous'. said finding will be correct, if Commissioner had examined and verified said transaction himself and given finding on merits. As held above, distinction must be drawn in cases where Assessing Officer does not conduct enquiry; as lack of enquiry by itself renders order being erroneous and prejudicial to interest of revenue and cases where Assessing Officer conducts enquiry but finding recorded is erroneous and which is also prejudicial to interest of revenue. In latter cases, Commissioner has to examine order of Assessing Officer on merits or decision taken by Assessing Officer on merits and then hold and form opinion on merits that order passed by Assessing Officer is erroneous and prejudicial to interest of revenue. In second set of cases, Commissioner cannot direct Assessing Officer to conduct further enquiry to verify and find out whether order passed is erroneous or not. [Para 19] 9.3. Applying propositions of law laid down in these case-law, to fact of this case, we have to necessarily hold that exercise of power by ld. Pr. CIT u/s 263 of Act, was bad in law. 10. We also find that in her reply, assessee has stated before ld. Pr. CIT that assessee has earned capital gain on sale of shares of M/s. Goodwill Griha Nirmal Pvt. Ltd., and that she has not incurred any loss as alleged in said notice. details were furnished. Despite these explanation and evidences filed, ld. Pr. CIT had committed factual error in concluding at page 10 para 5 of his order that assessee has claimed capital loss on account of share transactions of M/s. Goodwill Griha Nirman Pvt. Ltd.. order passed u/s 263 of Act, based on mistake of fact, cannot be sustained. This is not case of non enquiry or non application of mind. allegation of ld. Pr. CIT is that issue requires further verification and investigation. 13 I.T.A. No. 794/Kol/2019; Assessment Year: 2014-15 Smt. Archana Salarpuria 11. In view of above discussion, we quash order passed u/s 263 of Act and allow appeal of assessee. 12. In result, appeal of assessee is allowed. Kolkata, 28th day of August, 2019. Sd/- Sd/- [S.S. Viswanethra Ravi] [J. Sudhakar Reddy] Judicial Member Accountant Member Dated : 28.08.2019 {SC SPS} Copy of order forwarded to: 1. Smt. Archana Salarpuria Salarpuria Jajodia & Co. 3rd Floor 7, Chittaranjan Avenue Kolkata 2. Assistant Commissioner of Income Tax, Circle-22, Kolkata 3. CIT(A)- 4. CIT- , 5. CIT(DR), Kolkata Benches, Kolkata. True copy By order Assistant Registrar ITAT, Kolkata Benches Archana Salarpuria v. Assistant Commissioner of Income-tax, Circle-22, Kolkata