TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 1310
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.... to furnish complete details of the Directors along with their assessment particulars, name, address, source and assessment particulars of the share-holders, details of sundry debtors, loans and advances given and squared-up during the year. The details of work-in-progress, copies of VAT returns and also copies of lease deeds in respect of lease rentals received, were called for apart from directing the assessee to produce the books of account. As noticed from Annexure-A (page-54 of the paper book) the assessee was called-upon to furnish brief note on the nature of the business carried on during the previous year and all other financial statements along with annexures. In response thereto, the assessee furnished the following details : 1. "Books of accounts of the company for the A.Y. 2010-2011 in printed format. 2. Confirmation of investment into the shareholding of the company by M/s. Starline Holdings Inc. and M/s. Sujana Metal Products Limited. 3. Ledger copy of share premium account. 4. Bank reconciliation statement along with bank statement. 5. Ledger copy of interest received. 6. Details of loans and advances given in the prescribed format. 7. Ledger acco....
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....of the assessee-company he learned Representative adverted the attention of the Principal Commissioner to the questionnaire issued by the Assessing Officer wherein the assessee was called-upon to furnish gross profit/net profit margins shown with corresponding turnover for the current and past two years and the Assessing Officer had also directed the assessee to furnish the copies of the VAT returns and after considering all the details filed, the Assessing Officer had come to the conclusion that the assessee was merely engaged in trading activity. Since the Assessing Officer had taken one of the possible views on the matter, revision proceedings by the Principal Commissioner - merely because he holds a different view on the matter - is not permissible. 4.2. It was further contended that the learned Principal Commissioner proposes to take a different view, merely on presumptions/surmises; according to the Pr.CIT the Assessing Officer had not made any enquiries into the alleged trading activity and in particular the nature of round-tripping, which is based on the assumption that the entities with whom the activities are conducted are of the same group companies. In the reply furnis....
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....by the Pr. CIT, assessee-company is in appeal before us. Learned Counsel for the assessee submitted that the Assessing Officer has followed a prudent approach, of calling-upon the assessee to furnish all details and after thorough examination of the facts in detail he concluded that the assessee is not engaged in manufacturing activity and merely carried-out trading activity in this year. Since he has called for all the details with regard to the investments made by the assessee, merely because the Commissioner holds a different view it cannot be alleged that the activity was in the nature of round-tripping. In fact, the Ld. Commissioner had not specifically mentioned as to how the activity can be considered as round-tripping activity and even he could not point-out as to how the investment into shareholding of Star Line Holdings etc., was not properly investigated. In fact confirmations from Star Line Holdings Inc., and M/s. Sujana Metal Products Ltd., were already furnished before the Assessing Officer and it is not known as to what further investigation is required. In otherwords, the Assessing Officer having arrived at a fair view on the issues raised by the Commissioner, merel....
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....e and interest income shown to have been received by the assessee would be sufficient to come to the conclusion that the order passed by the Assessing Officer is erroneous.) 3. CIT vs. Infosys Technologies Ltd., 341 ITR 293 (Karnataka) (HC) (If the assessing authority failed to verify the particulars/details, more so in extending a tax relief to the assessee, the order definitely constitutes an order not merely erroneous but also prejudicial to the interests of the Revenue.) 7. Joining the issue, the Learned Counsel for the assessee submitted that in the instant case, the Assessing Officer had conducted detailed enquiry before determination of income and in fact disallowed a portion of the claim i.e., amount claimed as deduction referable to interest paid to APSFC, and thus merely because the CIT holds a different opinion the order passed by the Assessing Officer cannot be said to be erroneous. He also relied upon the decision of Hon'ble Delhi High Court in the case of D.G. Housing Project Ltd., 20 taxman 587 in support of his contention that the CIT cannot direct the Assessing Officer to conduct further enquiry to verify as to whether first order passed by the Assessing Of....
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.... for the assessee, thus, strongly submitted that even during the course of 263 proceedings the assessee specifically mentioned that the revisional authority has not specifically found anything before jumping to the conclusion, except on surmises, with regard to nature of round-tripping activity, and no further investigation was made by the Commissioner before holding that the order passed by the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. 8. We have carefully considered the rival submissions and perused the record and we have also carefully gone through the case law relied upon by both the parties. There is no dispute with regard to the principle as to what is the fine line to be drawn beyond which an order has to be treated as erroneous and prejudicial to the interests of the Revenue and at what stage it can be held that the Assessing Officer had taken a reasonable view on the matter which cannot be set-aside merely because the Commissioner holds a different view. It is also not in dispute, based on the case law cited (supra), that when an Assessing Officer makes a reasonable enquiry before reaching appropriate conclusions, it is for the Commis....