TaxTMI 
TaxTMI 
2014 (12) TMI 554
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....terest on loans given to others. Therefore, interest was to be disallowed on proportionate basis. b) Sundry creditors of Rs. 3,21,71,459/- have not been enquired into properly before accepting the same. c) Unsecured loan at Rs. 95,28,007/- has not been enquired into properly before accepting the same. d) Assessee has made an addition in capital of Rs. 16,00,000/- but not verified the source of addition in capital. e) During the year, assessee has made an addition in fixed assets of Rs. 23,13,334/- but the A.O. has not obtained the bills nor verified the source of investment. f) The A.O. has not taken commission expenses into account for which the case was selected for scrutiny. g) The assessee is engaged in the business of manufacturing & exporter of stainless steel and pet products and has shown sales of 11,31,40,469/-. Against this, the assessee has shown a N.P. of Rs. 7,47,494/- only which is aprox. 0.66% of the sales. The A.O. has accepted the same without any enquiry into the same." 4. In view of above, the order of the A.O. was found to be erroneous and prejudicial to the interest of the Revenue since, at the time of assessment, the A.O. was duty bound to....
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....at.) 326 xiii) CIT Vs Pushpa Devi, 173 ITR 445 (Pat.) The Hon'ble Jurisdictional ITAT Delhi Bench in the case of Shri Virendra Kumar Gupta Vs CIT (I.T.A. No. 2595/Del/2009 dated 21.01.2011 relying upon aforesaid judgements, has held that the facts of the case were in pari-materia with above judgements. Further, on consideration of these cases, the Hon'ble ITAT viewed that the Ld. CIT was right in exercising the revisionary jurisdiction dismissing the appeal filed by the assessee. In view of the foregoing, it is evident that the order passed by the A.O. is erroneous as well as prejudicial to the interests of the Revenue for the reasons as stated above. 5. In the course of the proceedings u/s 263, Ld. counsel for the assessee attended and filed written submissions but failed to produce the books of account and the case was also discussed with him and Ld. CIT after taking each of the points raised in the notice u/s 263(1) and various case law as mentioned by him in his order, has concluded to set aside the order of assessment to the extent mentioned in the order and the A.O. was directed to pass fresh order expeditiously after affording opportunity to the assessee. 6. Aggr....
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....served upon the assessee. Thereafter, in view of various notices issued u/s 143(2) and 142(1) of I. T. Act, 1961. Shri Rajeev Jain, CA, attended the proceedings form time to time and furnished the replies to the various queries raised by this office. Books of accounts have been produced and have been examined on test check basis. After discussion and taking in to consideration the information filed by the Ld. AR of the assessee the assessment is completed here under as: Assessee is the proprietor of M/s. Swastik Industries engaged in the manufacturing and export of stainless steel and pet products. During the year under consideration the assessee has not deposited the tax deducted at source in time at Rs. 3,46,592/- payable to the shipping agency u/s 194C of the I. T. Act, 1961. The same is disallowable u/s 40a(i) of I. T. Act, 1961 during the year under consideration as the same has been paid on 31.03.2009. Accordingly, the addition of Rs. 3,46,592/- is made to the income declared by he assessee. During the year under consideration, the assessee has claimed the car running expenses at Rs. 1,89,914/- and depreciation on the same at Rs. 2,95,114/-. Personal use of the conveyance ....
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....t is prejudicial to the Revenue- recourse cannot be had to section 263(1) of the Act. The provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer, it is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. The phrase "prejudicial to the interests of the Revenue" is not an expression of art and is not defined in the Act. Understood in its ordinary meaning it is of wide import and is not confirmed to loss of tax. The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue. If due to an erroneous order of the Income-tax Officer, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the Revenue..." 10.1 It has been further held in the above judgement as under: "........... He accepted the entry in the statement of account filed by the....