TaxTMI 
TaxTMI 
2014 (7) TMI 382
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.... on various factual and legal grounds including the following: a) Provisions of sections 263 in terms had no application to the facts of appellant's case because the issue regarding NP rate raised by the ld.CIT had already been dealt with, verified and then accepted by the ld.Addl. CIT vide order dated 22/12/2010 u/s 144A and by the ld.AO vide the assessment order dated 27/12/2010 u/s 143(3). b) The assessment order as passed by the AO was neither erroneous nor prejudicial to the interest of Revenue. The onus was on the ld.CIT to prove that the assessment order as passed was erroneous and prejudicial to the interest of Revenue which had not at all been discharged." 3. At the time of hearing before us, the learned counsel referred to the n....
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....e order of learned CIT passed under Section 263 may be sustained. 5. We have carefully considered the submissions of both the sides and perused relevant material placed before us. At page 1 & 2 of the assessee's paper book, there is a copy of show cause notice dated 12th February, 2013 issued by the CIT under Section 263 of the Income-tax Act, 1961. The relevant portion of the notice reads as under:- "An assessment order for assessment year 2008-09 was passed under section 143(3) of the Income Tax Act on 27.12.2010 by the Asstt. Commissioner of Income Tax, Circle-1, Meerut. 2. On examination of the records, it is evident that the said assessment order was passed without proper enquiry in view of the following points:- a) The assessee co....
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....ideration the assessee company has declared GP and NP rates @ 2.17% and 0.73% respectively which are remarkably lower than the corresponding rates of immediate preceding year. Necessary details with regard to items of balance sheet, income and expenses have been filed. Also the books of accounts alongwith the bills and vouchers were produced & examined on test check basis. 3. During the course of assessment proceedings the assessee was asked to justify the lower net profit. He was also required to show cause why the net profit rate (0.76%) was lower than the net profit rate (28.81%) in the case of M/s Milestone FAB which is engaged in the similar business. The assessee could not file any satisfactory reply and he filed an application u/s 1....
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....onsidering all these facts, the Additional Commissioner of Income Tax held as under:- "6. I have considered the submission made by the assessee and also the concerns raised by the AO. On verification of the books of accounts it was seen that most of the sales for Meerut unit are against HPSEB tender. In view of the hike in the price of input raw material, the adverse impact on profitability is inevitable. Because of the contractual nature of sales the assessee is bound to supply even if there may be some loss. The sales being to the government departments, can not be manipulated. The only manipulation could be in purchases. I have compared the purchase price as reflected in assessee's books on a particular date with the relevant purchase p....