TaxTMI 
TaxTMI 
2015 (6) TMI 931
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.... was completed u/s 143(3) of the Act on 8.12.2010 on total income of Rs. 7,61,920, making an addition of Rs. 1 lac towards disallowance of Conveyance, freight, labour and travelling expenses over and above the declared income. The ld. CIT considered the following points for exercising the jurisdiction under section 263 of the Act : - (i) The assessee showed lesser profit from the trading activity, which was not properly looked into by the Assessing Officer; (ii) The AO did not verify sundry creditors ; (iii) The AO did not verify advances from customers; and (iv) The AO did not verify TDS claim and even TDS certificates were not on record. 3. On the first aspect, the ld. CIT noticed that the assessee had shown turnover of Rs. 13.98 cro....
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....ssment order can be termed as erroneous in several circumstances. Non-investigation by the AO on the relevant issues, which are required to be properly looked into, makes an assessment order erroneous. However, non-examination of the trivial or insignificant issues cannot lead to making an assessment order erroneous. Making due investigation but thereafter taking a patently erroneous view, also makes an assessment order erroneous. A line of distinction should be drawn between patently erroneous view and accepting one of the possible views. Only the former makes an assessment order erroneous and not the later. In other words, if there is a debatable issue and the AO has taken one of the possible and legally sustainable views, then that aspec....
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.... to conduct further inquiry on such issues. 5. Coming to the facts of the instant case, we find the first objection of the ld. CIT about non-production of books of account, etc. before the AO and the resultant rejection of such books and the consequential computation of business income at Rs. 65.84 lac, as unsustainable. We have perused a copy of the order sheet entry of the AO, which is available on pages 368 to 370 of the paper book. It is manifest that the first notice was issued by the AO to the assessee on 26.8.2009. On 4.8.2010, the assessee appeared and was called upon to furnish various details listed at sr. nos. a) to o), inter alia, of sundry creditors, various expenses including discounts, commission, etc. On 17.8.2010, the asse....
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....ch were called for and submitted before the AO, whose copies have been made available to us as well. It can be seen from the order sheet entry of the AO dated 4.8.2010 that the AO did ask for details of Discount on sales and Commission etc., along with all other expenses, which were duly filed. Simply because such expenses account for a higher amount, cannot in itself be a reason to hold that the assessment order, allowing deduction for such expenses, is rendered erroneous and prejudicial to the interest of the Revenue. 7. It is vivid from the assessment order itself that some of the expenses claimed as deduction were on the basis of self-made vouchers. The ld. AR contended that these were petty payments on account of freight, carriage, et....
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....ns at sr. nos. 2 and 3 about the nonverification of sundry creditors and advances from customers are concerned, we find from order sheet entry dated 4.8.2010 that the assessee was called upon to furnish details of sundry creditors along with their copies of accounts, etc., which the assessee complied with. It is not a case that there was some information with the AO casting doubt on the genuineness of creditors and advances and the assessment order was finalized without examining the creditors from that angle. The ld. CIT has not referred to any circumstances suggesting, even remotely, that these creditors were not genuine or at least further inquiry was necessary due to some specific reasons, which the AO failed to do. It is a simple case ....