TaxTMI 
TaxTMI 
2017 (9) TMI 960
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....plastic granules. The Assessee filed its return of income declaring total income of Rs. 87,590/. The assessment was completed on a total income of Rs. 6,09,95,031/-by making additions of Rs. 6,05,32,441/- u/s. 68 of the Act and Rs. 3,75,000/- u/s 40(a)(ia) of the Act. 3. Before making the assessment, a notice u/s. 142(1) of the Act dt. 12.03.2015 was issued by the AO calling upon the Assessee to furnish supporting documents for all expenses claimed as deduction. The assessee furnished audited books of accounts and other documents as per requirements. In the course of assessment proceeding u/s 143(3) of the Act the assessee in support of the debit entry in its audited P /L Account for Rs. 86,88,687 /- as 'Clearing and Forwarding Charg....
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....aning Agency P. Ltd. reflected that the very company had earned Rs. 45,04,818/- from 'service charges'. So, the Assessee's claim of payment of Rs. 70,52,892/- to the said party was not correct. It was the further case of the CIT in the show cause notice that the Assessee had claimed excess deduction of Rs. 25,48,074/- [Rs.70,52,892 - Rs,45,04,818] under the head clearing and forwarding charges which should have been brought to tax. 5. In reply to the aforesaid show-cause notices, the assessee filed its written submission on 24.01.2017. In its reply the Assessee filed copies of all the 26 bills issued by M/s.Sayan Shipping & Cleaning Agency P. Ltd., ledger account of the said party, bank statement of the assessee and a summary of ....
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....espect of M/s Sayan Shipping & Cleaning Agency P. Ltd. aggregating the expenditure of Rs. 70,52,892/- [Rs.46,16,904/- towards clearing and Forwarding charges and Rs. 24,35,988/- as reimbursement of CFS]. 4. The bills were cross checked with the ledger account statement submitted by Sayan Shipping & Cleaning Agency P. Ltd. [against 133(6)] and it was found that bill numbers are not tallying. The heads for such bills and the breakups of the bills and supplementary bills do not match in figurative terms. This requires presentation of original bills, customs documents and all allied documents to arrive at a definite conclusion. It is further found that the original assessment was completed u/s 144 due to non compliance of the ....
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.... submitted that the CIT has exercised powers u/s.263 of the Act on surmise and conjecture and allowed to pass second round of assessment order on the same set of facts and evidence already on record. It was submitted that the action of the C.I.T. in having totally relied on the reply in response to notice u/s.133(6) of the Act which was obtained from M/S. Sayan Shipping & Cleaning Agency P. Ltd., by the AO in the course of assessment proceedings behind the back of the assessee and without pointing out any flaw in the audited accounts or bills and ledger accounts produced before him was an arbitrary action. 9. The learned counsel also drew our attention to the 26 bills produced before the C.I.T. incorporating details as per quotation and ....
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....t. It was submitted that it was not the case of the C.I.T. that the said party denied to have received the said amount of Rs. 70,52,892/- through banking channel. It was submitted that M/s.Sayan Shipping & Cleaning Agency P. Ltd. might have given only the figures of first part, which the C.I.T. has mentioned in his order. 10. The ld. Counsel for the assessee placed reliance on the decision in the case of CIT v. Gabriel India Ltd. reported in [1993] 203 ITR 108 (Bom) wherein the Hon'ble Court held that jurisdiction u/s.263 of the Act cannot be invoked to make a fishing or a roving enquiry. 11. In light of the aforesaid submissions, it was urged that the order of the CIT u/s 263 of the Act directing to frame the assessment order de ....
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....- had been duly paid by the assessee to M/s. Sayan Shipping and Cleaning Agency Pvt. Ltd.. In the reply to the show cause notice by CIT u/s 263 of the Act all the above facts are brought to the notice of CIT and CIT had not disputed the facts as stated by the assessee in such reply. The CIT however cross checked the ledger account statement submitted by M/s. Sayan Shipping and Cleaning Agency Pvt. Ltd. received in response to the notice issued by the AO u/s 133(6) of the Act while concluding the original assessment proceedings with the bill nos as produced by the assessee and found discrepancies in its bills. The order of CIT does not spell out as to what was the discrepancy. It is also not disputed that the CIT had not confronted the asses....