AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 691
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....nt craves leave to add, alter, amend any ground of appeal. 3. The CIT-Gandhinagar, Ahmedabad issued a notice to the assessee vide No.GNR/263/SKB/2010-11 dated 13.10.2010 u/s 263 of the Act, which is reproduced hereunder:- "No. GNR/263/SKB/2010-11 Date: 13.10.2010 To, Shri Satyanarayan K. BharadwaJ, AT: Khabdosan, Tal: Visnagar, Mehsana Dist. Sub: Re-opening of assessment proceedings u/s. 263 of the IT Act for A.Y. 2008-09 - regarding - The assessment order u/s. 143(3) was made on 19/04/2010 determining total income at Rs. 1,15,990/- as against Rs. 90,990/- declared by the assessee. 2. On going through the return of income, it has been found that report under the contract work has been disclosed at Rs. 99,84,332/- whereas the net profit declared is Rs. 90,992/- which is around 1% of the gross receipt. 3. The A.O. during the course of assessment proceedings did not call for the details of the following: (i) Raw Material exps. Rs. 10,47,040/- (ii) Diesel & Fuel exps. Rs. 14,38,751/- (iii) Labour exps. Rs. 17,48,095/- (iv) Spare Parts Exps Rs. 1,19,533/- (v) Site Exps Rs. 1,79,250/- (vi) Salary to staff Rs. 12,82,800/- (vii) Site Rent Exps Rs. 48,000/- (viii) Office ....
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....ble on record. 7. On going through the copies of Bank Accounts in the books of accounts, the following receipts have been noticed. (i) Saraswati Construction Rs. 200000 on 16-4-2007 (ii) Saraswati Builder Rs. 40000 on 24-05-2007 (iii) Babulal Sharma Rs. 100000 on 6-2-2008 (iv) Saraswati Construction Rs. 215000 on 26-2-2008 (v) Babulal Sharma Rs. 100000 on 19-3-2007 (vi) Narendrakumar Rs. 50000 on 26-3-2008 Whether these are cash credits/loans are not ascertainable as no confirmations from the parties are available on record. If it is contract receipt, why the same were remain undisclosed is not known. 8. In the all items ledger account, there are following debit and credit. Dena Bank Thara (7875) (1) Chamunda Trading Co. Payment Rs. 200000 on 3-7-2007 (2) Nandram Rs. 61960 on 11-7-2007 (3) Ramkumar Sharma Rs. 10000 on 11-7-2007 (4) -do- Rs. 20000 on 22-9-2007 (5) -do- Rs. 10000 on 25-10-2007 (6) -do- Rs. 10000 on 29-10-2007 (7) -do- Rs. 20000 on 30-11-2007 (8) Veljibhai Bahubhai Chaudhary Rs. 10000 on 18-10-2007 (9) -do- Rs. 10000 on 2-11-2007 (10) -do- Rs. 7000 on 8-11-2007 (11) Baublkal Sharma Rs. 150000 on 1-1-2008 The nature of payment and copies of ....
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....found Correct as per books of accounts and records. For your ready reference, we again submit aforesaid details for your kind verification. (Refer Page No: 28 to 31) 4. Reply to Para 5 : As Per Notice u/s 142(1) of Act dated 22/02/2010 (Refer Para 1 & 8) Assessee has submitted on dated 17/03/2010 Copy of TDS Certificate and Bank Statements for verification of TDS Certificate Entry withy Bank Statement which has been examined and verified by Assessing Officer and found Correct as per books of accounts and records. For your ready reference, We again Submit afore said details for your kind verification. (Refer Page No: 32 to 49) 5. Reply to Para 6 : As Per Notice u/s 142 (1) of Act dated 22/02/2010 (Refer Para 8) Assessee has submitted on dated 17/03/2010 Copy of bank Statements and books of Accounts wherein payment made to item no i to xxii as Stated in your notice dated 13/10/2010, with statement of Ledger account and contra confirmation which has been examined and verified by Assessing Officer and found Correct as per books of accounts and records. For your ready reference, We again Submit afore said details for your kind verification. (Refer Page No: 50 to 73 and 144 to 152....
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....error must be prejudicial to the interest of the revenue. The words "prejudicial to the interest of the revenue" have not been defined but legally it is well settled that they mean that the orders under consideration are such as are not in accordance with law, in consequence whereof the lawful revenue due to the state has not been realized or cannot be realized. (2) In the case of Malabar Industrial Co. Ltd. Vs. CIT (supra) The Honourable Supreme Court had an opportunity to deal with the issue as to what is an error. The Honourable Supreme Court thus observed "there can be no doubt that 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 fail the orders passed without applying the principle of natural justice or without application of mind." (3) In CTI Vs. Bhagat Shyam & Co (188 ITR 608) the Honourable Allahabad High Court quashed the revisional proceedings because the commissioner had initiated ....
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....ural justice has to be strictly adhered to. Further the order passed under this section must be reasoned orders otherwise the same would be vitiated. (B) DURING THE COURSE OF ASSESSMENT PROCEEDING WE HAD SUBMITTED DETAILS DATED 17/03/2010 BEFORE ASSESSING OFFICERS WHICH ARE CONSIDERED AS PART OF OUR REPLY In view of the aforesaid observation, the order u/s 143(3) dated 19-04-2010 is NOT treated as erroneous and prejudicial to the interest of revenue. With Thanks Yours Faith fully Sd/- Satyanarayan K Bhardwaj Proprietor" 5. The CIT-Gandhinagar, Ahmedabad has held as under:- "ORDER UNDER SECTION 263 OF THE I.T. ACT, 1961 The assessment in this case was completed U/s.143 (3) on 19/04/2010 on a total income of Rs. 1,15,990/- as against the revised returned income of Rs. 90,990/-. While completing the assessment, the Assessing Officer has disallowed part of Telephone expenses, office expenses and Travelling expenses, totaling to Rs. 25,000/-. Subsequently on examination of the case records it was found that the Assessing Officer had not examined. (i) In the Xerox copy of TDS certificate the page no.2 of the TDS certificate as difference serial no. and does not match. (ii) The a....
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....hence this amount not treated as revenue therefore, reduced from the total (Shown in account) receipt of Rs. 1,07,33,184/-. In view of this there is a difference as per P&L account and as per ledger account comes to Rs. 73,476/-(Rs 10733184 - Rs. 675406). 4. As per the details available on record, the Assessing Officer did not called for the details. In respect of Tractor rent and machinery rent, on verification of the ledger accounts of the parties to whom the payments were made it is seen that the most of the person has given confirmation without PAN, address and identity therefore, it is not possible to confirm whether it pertain to Tractor rent or machinery rent and if prima facie applicable u/s 40a (ia) of the Act or not. 5. The above facts clearly show that proper verification In respect of Tractor rent and machinery rent and other item listed as per paras (i) & (v) have not been verified by the Assessing Officer during the assessment proceedings. The Assessing Officer has also not conducted any enquiry so as to establish the identity of the person to whom the tractor rent and machinery rent was paid. 6. The contentions raised have been considered. It is clear from the fac....