TaxTMI 
TaxTMI 
2008 (1) TMI 644
X X X X Extracts X X X X
X X X X Extracts X X X X
....record carefully. The assessee at the relevant point of time was engaged in the trading and providing of services to others. It has filed its return of income on 27-11-2000 declaring total income of Rs. 4,201 and as per section 115JA such income was shown at Rs. 12,254. This return was processed under section 143(1) on 14-3-2002 at Rs. 12,254. However, the assessment was reopened by issuance of notice under section 148 of the Act after recording the following reasons : "1. Out of total purchases of Rs. 12.40 crores, purchases from a sister concern, i.e., M/s. Wind Castle Export (P.) Ltd. along account for 11.57 crores. Possibly, this caused sharp fall in G.O. reasons for the same (like 80HHC benefit to sister concern) need deeper examina....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ice inviting explanation of the assessee as to why action under section 263 be not taken. 5. In response to the show-cause notice the assessee has filed detailed reply which has been reproduced by the ld. Commissioner in the impugned order. In the reply the assessee has stated that it has sold the DoC purchased from the sister concern at a rate of Rs. 7,925, i.e., more than the one purchased from the sister concern, therefore, the provisions of section 40A(2)(b) of Act is not applicable. The ld. Commissioner has rejected this contention of the assessee on the ground that if it is established that the assessee made payments over the fair market value of goods to associate concern for purchases, then such over payments are to be disallowed....
X X X X Extracts X X X X
X X X X Extracts X X X X
....T must record satisfaction that the order of the Assessing Officer is erroneous and prejudicial to the interest of the revenue. Both the conditions must be fulfilled. (ii)Section 263 cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer and it was only when an order is erroneous that the section will be attracted. (iii)An incorrect assumption of facts or an incorrect application of law will suffice the requirement of order being erroneous. (iv)If the order is passed without application of mind, such order will fall under the category of erroneous order. (v)Every loss of revenue cannot be treated as prejudicial to the interests of the revenue and if the Assessing Officer has adopt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e above principle let us examine the facts of the present case. It is the prerogative of the ld. Assessing Officer to pass the assessment order if he failed to discuss a particular issue simply blame could not be put upon the assessee. In a given case the assessee can establish that the Assessing Officer has enquired a particular issue by issuance of a show-cause notice. The assessee has supplied the material and explained the issue to the Assessing Officer. The Assessing Officer was satisfied and did not make additions/disallowance on that issue then merely on the basis that no discussion is discernible in the order of Assessing Officer it should be construed that for want of investigation or an enquiry the order of Assessing Officer is er....