2014 (8) TMI 876

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....ntial question of law : "Whether the Income Tax Appellate Tribunal was justified in law in cancelling the order u/s 263 of the Income Tact Act 1961 passed by the Commissioner of Income Tax (Appeals)-1, Kanpur ignoring the fact that the order of the Assessing Officer was erroneous in so far as prejudicial to the interest of revenue and the CIT had correctly passed the order u/s 263 of the Income Tax Act, 1961 by invoking the provisions of Section 263 of the Income Tax Act" The brief facts of the case are that the assessee is a firm of civil contractors consisting of five partners. During the assessment year under consideration, it has constructed 32 flats. On 23.2.2000, a survey was conducted at the business premises of the assessee. A....

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....eas the cost of 32 flats has been deducted while working out the closing stock of Rs. 1,29,04,107/-. One Shri Suresh Kumar Rochlani, made a vague statement without knowing the facts, so CIT has rightly passed an order under Section 263 of the Income Tax Act. On the other hand, Shri S.D. Singh, learned Senior Counsel assisted by Sri Krishna Dev Vyas, learned counsel for the assessee-respondent has justified the impugned order passed by the Tribunal. He submits that the assessment order was neither prejudicial to the interest of the revenue nor it was erroneous as mentioned by CIT in his order, passed under Section 263 of the Income Tax Act. For the purpose, he relied on the ratio laid down in the following cases :- (i) Malabar Industri....