2016 (3) TMI 1231

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....Foundary (P) Ltd., Mandi Gobindgarh belongs to Narain and Company Group of cases. The return of income for A.Y. 2010-11 declaring income of Rs. 59,55,040/- was filed on 09.08.2012. Assessment was completed determining total income of Rs. 1,35,89,928/- vide order dated 25.03.2013 passed u/s 153A r.w.s. 143(3) of the I.T. Act. 2. After going through the assessment records and the relevant seized material, it is noticed that assessment order is erroneous in as much as it is prejudicial to the interest of revenue for the reasons given below :- In the course of search, inter-alia; a note-book (Ledger) marked as A-2 was found and seized from the residential premises of Sh. Narain Singla. Aforesaid ledger recorded details of unaccounted purchases and sale etc. As per facts discussed from page 2 to 8 of the assessment order for A.Y. 2010-11, there are unrecorded purchases of Rs. 8,12,01,500/- and unrecorded sales of Rs. 7,65,43,329/-. On the basis of above working of unrecorded purchases and sale, A.O. has computed peak investment of Rs,i,25,54,782/~ apart from profit on the unaccounted sales. Since assessee had already declared an amount of Rs. 50 lac, A.O, made further ....

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.... aside with the directions to make the assessment denovo. 6. For this purpose, you are hereby given an opportunity of being heard either in person or through an authorized representative in my office situated at Kitchlu Nagar, 2nd Floor, Near B.V.M. School, Ludhiana on 20.01.2015 at 1.30 P.M. On that date, you may submit your objections with evidence, if any, to the proposed action in writing. In case of your failure to attend on the aforesaid date or to submit written reply by that date, it will be presumed that you have no objection to the proposed action and matter shall be decided on merits." 3. In reply to the said notice, the assessee submitted that all the entries recorded in the impounded diary marked as Annexure-A-I have been duly considered by the Assessing Officer during the assessment proceedings. It was an admitted fact that part of the entries not recorded in the books of account representing purchases and sales outside the books of account were taken into account and thereafter calculating peak at Rs. 1,25,54,782/- and after deducting a sum of Rs. 50 lacs being the amount surrendered, the addition of Rs. 75,54,782/- was made by the Assessing Officer. The ....

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....al) has erred in invoking the proceedings u/s 263 and passing the order u/s 263 of the Income Tax Act, 1961 thereby setting aside the order of the Assessing officer with the direction to make fresh assessment. 2. That the Worthy Principal CIT(Central) has also erred in not considering the fact that the assessment was completed u/s 153A r.w.s. 143(3), after thorough investigation and application of mind and, as such, the assessment framed was neither erroneous and nor prejudicial to the interest of revenue. 3. Notwithstanding the above said ground of appeal, the Pr. CIT (C), has erred in not considering the following facts that the assessment was neither erroneous nor prejudicial to the interest of revenue: - i). The entries as confronted by the Pr. C!T( C) by way of Annexure -1 are duly recorded in the books of accounts, which were verified by the Assessing Officer and the evidence of the same was given to, the Principal CIT(C) and which, it did not require any further verification. Further, the typographical error of one figure as shown at item No. 23 of the seized document did not effect the income as already assessed by the Assessing Officer. ....

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.... as such, the order as passed by the Worthy Pr.CIT (C) is not a valid order either. 6. That the detailed submissions filed during the course of hearing has not been considered properly. 7. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off." 6. The learned counsel for the assessee reiterated the submissions made before the lower authorities. In addition, it was submitted that the learned Commissioner of Income Tax has invoked his revisionary powers on the basis of the same documents, which were there before the Assessing Officer. On the same documents, only change in mode and manner of making addition by the Assessing Officer, is not proper on the part of the learned Commissioner of Income Tax to assume jurisdiction under section 263 of the Act. As regards unaccounted entries, our attention was invited to the office note written by the Assessing Officer at the end of his order, whereby he has clearly stated that all unaccounted entries have been considered by him. Further, it was argued that as regards the prejudice caused to the Revenue, no finding has been recorded by the learned Commission....

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....h the decision taken by the Assessing Officer, this cannot be a right occasion to assume jurisdiction under section 263 of the Act. As we have already stated that the conclusion drawn by the Assessing Officer is not one which is in contravention of some law. The Assessing Officer has drawn conclusion to the best of his ability, the learned Commissioner of Income Tax, now cannot impose his own view under section 263 of the Act. The learned Commissioner of Income Tax has held somewhere in his order that the contention of the assessee that all these entries are actually recorded in the books of account is not acceptable. We do not understand how the learned Commissioner of Income Tax assuming jurisdiction under section 263 of the Act, can decide an issue, which has been already decided by the learned CIT (Appeals) and the matter is pending before the I.T.A.T. Further, his observation that there is no evidence that the Assessing Officer has examined the same or not is also not correct, since all along the contention of the assessee has been that these entries are recorded in the books of account and the Assessing Officer as well as the CIT (Appeals) have actually worked on these lines ....