TaxTMI 
TaxTMI 
2016 (11) TMI 712
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....turn of income for the A.Y 2008-09 on 30- 09-2008 admitting a total income of Rs. 49,98,490/-. The same was initially processed u/s. 143(1) of the Act on 24-03-2010 and subsequently the assessment was taken up for scrutiny u/s. 143(3) of the Act. During the course of assessment, Assessing Officer (AO) observed that though the assessee during the course of survey has offered to pay tax on the excess income discovered during the course of survey estimated at Rs. 62,13,730/-, the assessee has only shown an amount of Rs. 44,90,295/- in the return of income as the income offered u/s. 133A. AO therefore, asked the assessee to explain as to why the difference of Rs. 17,23,435/- should not be treated as 'escaped income' and added to the assessee's ....
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.... The CIT however, was not convinced with the assessee's contentions and held the assessment order to be erroneous and directed the AO to make enquiries and complete the assessment in accordance with the directions of the CIT. Against this order of CIT, assessee is in appeal before us. 3. The Ld. Counsel for the assessee submitted that the assessee, in his return of income, has offered a sum of Rs. 44,90,295/- as 'additional income' u/s. 133A of the Act. He submitted that in the computation of income itself, the assessee has given a note stating that this additional income consists of the value of difference in stock found at the Head Office and Branch Office at Panjagutta and also additional capital introduced by the partners of the firm....
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....ncome towards introduction of additional income by the partners and therefore, the same cannot be the basis for making any addition during the course of assessment without any further corroborative evidence. Further, he has also drawn our attention to the statement of Shri Naganath Mashetty u/s. 133A of the Act to justify the above contention. Thus, according to him, the order of CIT u/s. 263 is not sustainable. 4. The Ld. DR, on the other hand, supported the order of the CIT and submitted that though assessee has made a note in the computation of income that the additional income offered u/s. 133A includes the introduction of an additional capital by the partners, the assessee has not given any split-up or break-up of the same and none ....
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....the partners of the firm. Clearly, the AO has not verified this claim of the assessee. Thus, that would make the assessment order erroneous. But to revise an assessment order u/s 263 of the Act, the twin conditions are that the assessment order is erroneous as well as prejudicial to the interest of the Revenue are to be satisfied. Though the assessee has explained the sources for introduction of additional capital by the partners, the CIT has neither verified any of these contentions before him nor has he given any reason as to why such contentions are not acceptable holding that the assessment order is prejudicial to the interest of the Revenue. 5.1. As held by the Hon'ble Delhi High Court in the case of ITO Vs. D.G. Housing Project....