TaxTMI 
TaxTMI 
2012 (2) TMI 403
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....ment order dated 19th December 2007 passed u/s 143(3) of the Act, the subject matter of the proceedings u/ s 263 of the Act, was passed by the AO after making proper enquiries and was in accordance with law. Hence the assumption of jurisdiction by the CIT u/ s 263 of the Act is wrong and bad in law. 3) That the order of the AO dated 19th December 2007 u/s 143(3) of the Act, passed after making proper enquiries in accordance with law, was not erroneous and prejudicial to the interest of Revenue and hence proceedings u/ s 263 of the Act initiated by the CIT, is wrong and not sustainable under the law. 4) That the order of the AO u/s 143(3) of the Act cannot be held erroneous and prejudicial to the interest of Revenue merely on the basis of ....
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....ed the Assessing Officer to make the addition of Rs.6,69,540/- being the financial charges incurred on the borrowed funds utilized for acquisition of the property at Sunder Nagar. This property was forming part of the closing stock. The CIT has directed the Assessing Officer to make the addition of Rs.6,69,540/- by holding as under :- " I have considered the submission of the Ld. counsel and it is seen that the financial charges of Rs.6,85,860/- debited in the profit & loss account besides the bank charges includes the interest of Rs.6,69,452/-paid to M/s Aravali Securities and Financial Ltd. on a loan of Rs. 90 lacs taken from them. This loan has been utilized for purchasing the Sunder Nagar property which is forming a part of the closing....
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..... The order passed by Assessing Officer was neither erroneous nor prejudicial to the interest of revenue. The order passed by CIT is based on the change of opinion hence not sustainable in law. Learned AR also pleaded that as per Accounting Standard AS-2 interest and borrowing cost are usually not considered as relating to bringing the inventories in their present position and location, therefore, usually not included in the cost of inventories. He pleaded to set aside the order of CIT. 3. On the other hand, the learned DR submitted that the assessment order passed u/s 143(3) was only a five line order. The Assessing Officer has not scrutinized the cost of acquisition of inventories. The issue regarding the financial charges paid by assess....
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....th the sides. The Assessing Officer made the order under section 143(3) which read as under :- " The Return of Income was filed on 31.10.2005 declaring total income of Rs.87,46,659/-. The return was processed u/s 143(1) on 06.10.2006. Later on the case was selected under scrutiny and notice u/s 143(2) was issued and served upon the assessee company on 17.10.2006. In response to this notice Sh. Jiten Oberoi C.A. & AR appeared, furnished requisite details & discussed the case. At the face of the order, it is clear that it was passed without applying the mind or without making proper investigation. There is nothing on record which could show that Assessing Officer had inquired into financial charges paid on the borrowed fund for purchase of ....