TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 437
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....ncome Tax-II, Amritsar. Counsel for the revenue submits that findings recorded by the Tribunal are not only perverse and arbitrary but devoid of any reasons much less did the Tribunal have jurisdiction to appraise facts and record an opinion that the Commissioner could not have assumed jurisdiction under Section 263 of the Income Tax Act (hereinafter referred to as 'the Act'). Counsel for the revenue further submits that a perusal of the record reveals that even if it is accepted that the Commissioner of Income Tax committed an error in tabulating the number of blankets, the huge difference in valuation detected by the CIT is sufficient to infer prejudice to the revenue and as a consequence an erroneous consideration by the Assessi....
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....w cause notice upon the assessee proposing to revise the assessment by referring to facts that are not inferable from any document on record much less the assessee's documents and made an addition of Rs. 56,29,470/- to the income of the assessee. The Tribunal has after referring to the inventory as on 22.12.2004 which includes finished and unfinished goods as well as raw material, held that as these documents were already before the Assessing Officer who after examining the documents added Rs. 29,80,453/- to the income of the assessee, the case of the revenue at its best was a case of under assessment or under valuation of goods and not a case that would require exercise of jurisdiction under Section 263 of the Act. The Tribunal has als....
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....ed goods and sales wherein available on record. Items Tally as 22.12.04 Production in Jan. to March, 2005 Sales in Jan.-March, 2005 Closing stock Closing Stock as disclosed Difference in closing stock Double blankets 9204 7224 3020 13408 6004 7404 Single blankets 12448 6899 6859 12448 7236 5212 Baby blankets 4035 676 279 4432 4091 341 The aforesaid analysis shows that the quantity of closing stock is short by the following value:- Item Number Average Price (Rs.) Value (Rs.) Double blankets 7404 500 3702000 Single blankets 5212 360 1876320 Baby blankets 341 150 51150 This analysis which shows that the stock has been shown short by a value of Rs. 56,29,470/-. Therefore, instead of applying....
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....04. Also from the copy of the order sheet available at PB 16 to 20 and the various explanation given by the assessee vide different letters available at PB 27 to 29 and the quantitative tally and pre-survey and post survey profit & loss account and the summary of purchase and production available at PB 30 to 32, the AO had done extensive inquiry of the production, sale etc. and accordingly addition of Rs. 29,80,453/- has been made to the income of the assessee. The details of unfinished goods found at the time of survey with regard to 12165 pcs. Available at PB 12 and that of the finished goods available at PB 8 & 9 have already been taken into consideration in the production tally by the AO available at PB 30 to 32. Therefore, the Ld. CIT ....
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.... leave no ambiguity, that the CIT had no jurisdiction to exercise power under Section 263 of the Act and re-assess an already concluded assessment. Section 263 of the Act confers power to examine an assessment order so as to ascertain whether it is erroneous and prejudicial to the interest of the revenue but does not confer jurisdiction upon the CIT to substitute his opinion for the opinion of the Assessing Officer. The words prejudicial and erroneous have to be read in conjunction and therefore, it is not each and every error in an assessment that invites exercise of powers under Section 263 of the Act, but only orders that are erroneous and prejudicial to the interest of the revenue. A perusal of the order passed by the CIT reveals that i....