TaxTMI 
TaxTMI 
TaxTMI 
2015 (8) TMI 866
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....vide letters, dated May 10, 2013, May 27, 2013, July 14, 2013 and July 15, 2013. 3. That the Commissioner of Income-tax has failed to consider that the assessment as framed by the Assessing Officer was after due application of mind and after considering the detailed replies on various dates as filed before him during the course of assessment proceedings. 4. That the cancellation of earlier assessment by the Commissioner of Income-tax and directing the Assessing Officer to make a fresh assessment, confirms that the Commissioner of Income-tax is not of the confirmed view about the assessment being erroneous and prejudicial to the interests of the Revenue. 5(a) Without prejudice to ground Nos. 1 to 4 above, the learned Commissioner of Income-tax has erred in concluding that the judgment of the hon'ble Punjab and Haryana High Court in the case of Kim Pharma (P) Ltd. is applicable to the facts of the case of the appellant adversely and thereby concluding that the Assessing Officer has failed to make necessary inquiries and failed to apply his mind as regards the set off of loss against the surrendered income. 5(b) That even otherwise, the learned Commissioner of Income-tax h....
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....ejected the books of account and has failed to make enquiry on the same. The show-cause notice was issued to the assessee under section 263 of the Income-tax Act which was attended to by his counsel. The learned Commissioner of Income-tax also directed as to why book results be not rejected. The assessee replied that the book results could not be rejected merely on impossibility of furnishing the information with regard to closing stock, as in the nature of the business of the assessee, it is impossible. The assessee filed written replies before the learned Commissioner of Income-tax explaining the points raised by the learned Commissioner of Income-tax. The learned Commissioner of Income-tax also noted that no quantitative records have been maintained and replies have been given in general. The assessee was asked to furnish list of items manufactured by the assessee and corresponding unit cost and unit sale. However, the assessee explained that it manufactured sweets in large quantity and large items which are prepared by the workers and it is highly impossible in the nature of business of the assessee to furnish detailed quantities of sale. The learned Commissioner of Income-tax....
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..... The Assessing Officer, thereafter called for further reply from the assessee regarding quantitative details of raw material consumed and production data and the assessee explained that in the nature of business of the assessee, where large quantities of sweet items have been manufactured and different items have been used, it was not possible to maintain consumption and production data. The summary of the stock held on March 31, 2010 was explained. The reason for fall of the gross profit rate was also explained because the price of the raw material have increased but the sale prices have not increased. The comparative chart of purchases in the year under consideration and earlier years were filed. The assessee also explained as to why the assessee was entitled for set off of unabsorbed losses and depreciation and comparative chart of pre-survey operation and after survey operation were also explained to show that the gross profit rate was almost static. Learned counsel for the assessee, by referring to these details submitted before the Assessing Officer and books of account produced before him, submitted that the learned Commissioner of Income-tax cancelled the assessment order ....
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....nd and no details of the closing stock of manufactured items have been furnished. Therefore, the learned Commissioner of Income-tax was justified in cancelling the assessment order in the matter. The learned Departmental representative relied upon the following decisions : (i) Fakir Mohmed Haji Hasan v. CIT [2001] 247 ITR 290 (Guj) ; (ii) Tudor Knitting Works Pvt. Ltd. v. CIT [2014] 360 ITR 453 (P&H); and (iii) Axia Engineering Works v. CIT [2007] 292 ITR 577 (P&H). 10. We have considered the rival submissions and material available on record. The assessee has been able to demonstrate before us that the Assessing Officer made detailed enquiry at the assessment stage with regard to the fall in the gross profit rate set off of the brought forward losses and depreciation. The Assessing Officer issued several statutory notices to the assessee and called for complete details with regard to the manufacturing process, month-wise production, consumption, quantitative sales and justification of major expenses. The assessee furnished complete details and replies before the Assessing Officer at the assessment stage and also produced the books of account which have been test checked by ....
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....anation of the assessee, made some additions and rejected the books of account, it could not be said that he had not applied his mind. It is not always necessary that every assessee in the line of the business should have the same rate of profit." 13. The hon'ble Bombay High Court in the case of CIT v. Gabriel India Ltd. [1993] 203 ITR 108 (Bom) held as under (headnote) : "Held, that the Income-tax Officer in this case had made enquiries in regard to the nature of the expenditure incurred by the assessee. The assessee had given a detailed explanation in that regard by a letter in writing. All these were part of the record of the case. Evidently, the claim was allowed by the Income-tax Officer on being satisfied with the explanation of the assessee. This decision of the Income-tax Officer could not be held to be 'erroneous' simply because in his order he did not make an elaborate discussion in that regard. Moreover, in the instant case, the Commissioner himself, even after initiating proceedings for revision and hearing the assessee, could not say that the allowance of the claim of the assessee was erroneous and that the expenditure was not revenue expenditure but an ....
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....e also explained that the Assessing Officer, after consideration of all the replies, has allowed the depreciation and the depreciation chart is filed at page 44 of the paper book. It is, therefore, clear that the assessee submitted complete details before the Assessing Officer at the assessment stage regarding all the issues which have been raised by the learned Commissioner of Income-tax in the impugned order under section 263 of the Act. It is, therefore, clear that the Assessing Officer was satisfied with all the items which have been raised in notice under section 263 of the Act and allowed the claim of the assessee after conducting proper enquiry into the matter. The Assessing Officer, after making complete enquiries has made part addition, which will prove that the issues raised in the proceedings under section 263 of the Act have been correctly examined by the Assessing Officer at assessment stage. Therefore, when the Assessing Officer adopted one of the courses permissible in law and the view taken by the Assessing Officer was not found to be unsustainable in law, the learned Commissioner of Income-tax should not substitute the opinion of the Assessing Officer in the procee....