TaxTMI 
TaxTMI 
1998 (7) TMI 122
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....2,000 55,000 3. Smt. Indrawati 4% 3,488 2,000 55,000 4. OmPrakash 4% 3,488 2,000 5,000 5. BhopalSingh 43% 47,496 85,167 5,000 6. Shiv Kumar 43% 37,496 45,934 5,000 3. A scrutiny of the record show that capital investment made by Smt. Devki Devi, Indrawati and Om Prakash was only Rs. 2,000 each with 4 per cent share. All these three partners were also partners in about 10 other firms of this group of liquor contractors. It is seen that Smt. Devki Devi, Smt. Indrawati and Om Prakash earned a profit of Rs. 3,488 each they made gifts as under: Smt. Devki Devi (i) 50,000 Raj Kumar . (ii) 5,000 Mool Raj Singh Smt. Indrawati (i) 50,000 Raj Kumar . (ii) 5,000 Mool Raj Singh OmPrakash (i) 55,000 Raj Kumar . (ii) 5,000 Mool Raj Singh Shiv Kumar earned a profit of Rs. 37,496 and he made gift of Rs. 5,000 to Mool Raj Singh. Gopal Singh also made a gift of Rs. 5,000 to Mool Raj Singh. 4. Mool Raj Singh and his sons were liquor contractors during the year. Raj Kumar is his son. 5. The assessment records of the firms in which the donors were partners w....
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....r dt.25th March, 1987, to prove genuineness of the firm. The assessee filed a written reply dt. 31st March, 1987, stating that the reply filed by it on 21st Nov., 1986, be considered which was filed in reply to this office requirements made vide letter dt. 19th Sept., 1986, and has further stated that the firm was genuinely constituted through a deed of partnership that regular books of accounts were maintained; and the profits of the firm had been divided amongst the partners as per stipulations in the deed. In the circumstances it has been requested that the firm be allowed registration as claimed. 4. The claim of the assessee has been examined in the light of the submissions made by the assessee in the petitions filed on21st Nov., 1986, and31st March, 1987. In view of the replies filed by the assessee and the fact that the deed of partnership drawn on 27th Feb., 1985 was filed within the time prescribed; that the profits have been divided amongst the partners in the share ratio stipulated in the deed and that the order of stipulation in the deed have also been acted upon, it appears that a genuine firm had come into existence. Therefore, the firm is allowed registration for t....
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....of Revenue. These two conditions are cumulative. Therefore, the CIT must prove these two conditions before setting aside the order of the AO. In this connection reliance was placed on the following decisions: (i) H.H. Maharaja Raja Pawar Dewas vs. CIT (1982) 138 ITR 518 (MP); (ii) CIT vs. Gabriel India Ltd. (1993) 114 CTR (Bom) 81 : (1993) 203 ITR 108 (Bom); (iii) V.G. Krishnamurthy vs. CIT (1985) 152 ITR 683 (Kar); (iv) Fatechand Rajmal Jain vs. IAC (1997) 60 ITD 47 (Pune); (v) Jagatjit Industries Ltd. vs. Asstt. CIT (1998) 60 TTJ (Del) 544 : (1997) 60 ITD 295 (Del); (vi) Bharat Dairy Farm vs. Dy. CIT (1997) 60 ITD 321 (Pune); (vii) Tajinder S. Makkar vs. Asstt. CIT (1997) 58 TTJ (Bom) (TM) 416 : (1997) 61 ITD 57 (Bom) (TM); (viii) Sanco Trans Ltd. vs. Asstt. CIT (1997) 58 TTJ (Mad) 619 : (1997) 61 ITD 317 (Mad); (ix) J.P. Srivastav & Sons (Kanpur) Ltd. vs. CIT (1978) 111 ITR 326 (All); (x) CIT vs. Kashi Nath & Co. (1987) 64 CTR (All) 17 : (1988) 170 ITR 28 (All); (xi) CIT vs. Jagadhri Electric Supply & Industrial Co. (1981) 25 CTR (P&H) 94 : (1981) 140 ITR 490 (P&H); and (xii) CIT vs. Smt. Minalben S. Parikh (1995) 127 CTR (Guj) 333 : (1995) 21....
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....rtue of the order being erroneous prejudice must have been caused to the interests of Revenue. An order cannot be termed as erroneous unless it is not in accordance with law. If an AO acting in accordance with law makes certain assessment, the same cannot be branded as erroneous by CIT simply because, according to him, the order should have been written more elaborately. This section does not visualise a case of substitution of judgment of the CIT for that of the AO, who passed the order unless the decision is to be held erroneous. The second condition is that it must be prejudicial to the interest of Revenue. But that by itself would not be enough to vest the CIT with the power of suo motu revision because the first requirement, namely, that the order is erroneous is absent. Similarly, if an order is erroneous but not prejudicial to the interest of Revenue, then the power of suo motu revision cannot be exercised. Any and every erroneous order cannot be subject-matter of revision because the second requirement must be fulfilled. There must be some prima facie material on record to show that tax, which was lawfully exigible, has not been imposed or that by the application of relevan....
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....iture was bogus or inflated expenditure. He simply said that the matter required detailed verification and investigation without applying his mind to the various details and documents submitted before him. The error envisaged under s. 263 could not be the one which was dependant on the possibility or guesswork but it should be actual error either of fact or of law. The existence of any such specific error has not been pointed out by the CIT nor be had pointed out any mistake or discrepancy in the voluminous details. He had not even scrutinised and considered detail submitted before him in response to show-cause notice. In view of this the order passed under s. 263 was held to be invalid. 11. Applying the principles laid down by various High Courts and the Tribunal discussed above, to the facts of the present case, we find that the assessment in this case was firstly completed under s. 143(1), wherein the status of URF was determined, thereby refusing registration. Against that order the assessee filed appeal and the learned first appellate authority set aside the matter with the direction to make order of registration afresh after considering the reply of the assessee dt.21st No....