TaxTMI 
TaxTMI 
2014 (11) TMI 212
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....essment proceedings wrongly allowed rebate of 35% on such unrecorded, unfounded expenditure. Any expenditure incurred wholly and exclusively for the purpose of earning an income is to be allowed as a deduction. However, the basic condition is that such expenditure should have been incurred. As already indicated no such expenditure has either been debited in the books or supported by any documents seized during the search or otherwise. The order of the AO is, therefore, clearly erroneous as well as prejudicial to the interest of Revenue as no such deduction was allowable while computing the total income of the assessee, as per the provisions of the Act. 8. The assessee has also, in response to the second issue regarding capital gain, mentioned that the alleged unexplained investment in the hands of the firm M/s R.B.Enterprises does not make the order prejudicial to the interest of Revenue as it was taxed on higher rate of tax i.e.30%. Even if this was shifted to individual hands then the tax quantum would not exceed the highest rate of 30%. On this basis, the assessee claimed the addition in the hands of M/s R.B.Enterprises was not erroneous as it was based on the past and accept....
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....ssessing Officer while framing the assessment under Section 153A/143(3). Thus, the notice issued and the impugned order are beyond the preview of Section 263 and hence, the order passed under Section 263 is liable to be quashed. 5. That the CIT has agreed with the submissions of the Appellant that the Assessing Officer has taken the view after considering all the aspects. Moreover the view taken by the Assessing Officer is a possible view. Hence, the CIT has erred in law and on facts in setting aside the assessment to be redone afresh. 6. That the without prejudice to our appeal filed before the CIT(A), there is no error committed by the Assessing Officer in allowing the rebate of 35% on account of negotiation in property deals and the CIT has no jurisdiction to invoke Section 263 on the ground that he is holding a different view. 7. That the observations of the CIT are based on surmises and conjectures and on the basis of the different view taken by the Assessing officer after framing the Assessment Order Section 153A/143(3) and do not afford any legal justification to the findings given. 8. That the proceeding under Section 263 are initiated at the instance of Assessi....
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....ed the order u/s 263 by holding as under. "20. In the light of above, let us examine the issues before us. The first aspect is whether Explanation "C" appended to sec. 263 prohibits the Learned Commissioner in the present appeals to take action under sec. 263. The contentions of the Learned DR on the strength of authoritative pronouncements was that the issue to the extent of 35% sales consideration which have not been added by the Assessing Officer on the grounds that this much expenditure must have been incurred by the assessee is concerned, does not travel to the Learned CIT(Appeals). He emphasized upon the decision of Hon'ble Delhi High Court in the case of Printer House as well as of Hon'ble Bombay High Court in the case of Rati Lal Bacheri Lal (supra). In the case of Printer House, the assessee has imported two machines from abroad and claimed deduction under sec. 35. Learned Assessing Officer accepted the claim of assessee in respect of one machine but disallowed a similar claim in respect of Machine No.2. The assessee has challenged this disallowance before the Learned CIT(Appeals) in an appeal. While the appeal of the assessee was pending, Learned Commissioner t....
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....would come. The object of inserting Explanation C with sec. 263 is to avoid this contradiction among authorities having identical powers. They may not be called for to exercise their powers simultaneously because exercise of such powers by two authorities may lead to different opinion. Therefore, in our opinion the action taken by the Learned Commissioner under sec. 263 is not sustainable on this fold of submissions. 22. The next fold of submissions raised by the learned counsel for the assessee was based upon the decision of Hon'ble Delhi High Court in the case of ITO vs. DC Housing Project (supra). Learned Commissioner has set aside the assessment order and remitted the issue to the file of the Assessing Officer. Ld Assessing Officer has already made an analysis of the record. He has estimated the unaccounted sales on the basis of seized material. Nothing has to be brought on the record apart from those material. They are already on the record. Therefore, Learned Commissioner ought to have not set aside the issue to the file of the Assessing Officer without recording a firm finding. Hon'ble Delhi High Court in the case of DC Housing (supra) has appraised the adjudicati....
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....cation/inquiry. The order of the Assessing Officer may be or may not be wrong. CIT cannot direct reconsideration on this ground but only when the order is erroneous. An order of remit cannot be passed by the CIT to ask the Assessing Officer to decide whether the order was erroneous. This is not permissible. An order is not erroneous, unless the CIT hold and records reasons why it is erroneous. An order will not become erroneous because on remit, the Assessing Officer may decide that the order is erroneous. Therefore CIT must after recording reasons hold that the order is erroneous. The jurisdictional precondition stipulated is that the CIT must come to the conclusion that the order is erroneous and is unsustainable in law. We may notice that the material which the CIT can rely includes not only the record as it stands at the time when the order in question was passed by the Assessing Officer but also the record as it stands at the time of examination by the CIT [see CIT vs. Shree Manjunathesware Packing Products, (1998) 231 ITR 53 (SC)]. Nothing bars/prohibits the CIT from collecting and relying upon new/additional material/evidence to show and state that the order of the Assessing....