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Having arrived at the conclusion on merits for lack of jurisdiction of the Revisional Commissioner under s.263 of the Act, we are not inclined to dwell upon a legal ground questioning existential position of clause (i) of Section 92BA of the Act in this proceeding.

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Sec. 263 of Income Tax Act, 1961— Revision —The ingredients of Section 263 are clearly not fulfilled in view of the domestic transaction with AE not falling in the sweep of Section 92BA at the threshold, any alleged inaction attributable to the AO in this regard would not vitiate assessment order as erroneous nor did it cause any prejudice to the interest of the Revenue.

Facts: In the captioned appeal, assessee has challenged the action of the Pr.CIT assumed under s.263 whereby assessment order passed by AO under s.143(3) was sought to be set aside for consequential enquiries on transactions undertaken by the assessee with sister concern having regard to provisions of Section 92BA.

Held, that it is an admitted fact that the so called ‘SDT’ under lens of the Pr.CIT primarily represents ‘sale’ made by the assessee to its sister concern. Naturally a ‘sale’ made by the assessee gets outrightly excluded from the ambit of clause (i) of Section 92BA which is meant to deal with ‘expenditure’ incurred by the assessee to the benefit of sister concern/AE. As a corollary, merely because a prescribed Form No. 3CEB was filed in accordance with Rule 10E r.w.s. 92BA would not make an assessee susceptible to onerous investigation proceedings on such transactions where the assessee prima facie demonstrates that Section 92BA is wholly inapplicable in any manner at the first instance. The Pr.CIT was seized with the relevant facts and could have easily satisfied himself of such prima facie assertions. The allegations made by the Pr.CIT have been successfully rebutted on behalf of the assessee. In view of the domestic transaction with AE not falling in the sweep of Section 92BA at the threshold, any alleged inaction attributable to the AO in this regard would not vitiate assessment order as erroneous nor did it cause any prejudice to the interest of the Revenue. The ingredients of Section 263 are thus clearly not fulfilled. Hence, revisional order passed under s.263 seeking to set aside the assessment order passed under s.263 requires to be quashed. - ASHISH SUBODHCHANDRA SHAH (HUF) V/s PR. CIT - [2020] 26 ITCD Online 119 (ITAT-AHMEDABAD)