TaxTMI 
TaxTMI 
TaxTMI 
2017 (12) TMI 46
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....come Tax Act, 1961 by the Learned Assessing officer is erroneous and prejudicial to the interest of the revenue, without appreciating the facts and circumstances of the case. 3) On the fact and circumstances of the case as well as in Law, the Learned Principal CIT has erred in setting aside Assessment order passed by the Learned Assessing Officer and directing him to make fresh assessment, without appreciating the facts and circumstances of the case. 4) On the fact and circumstances of the case as well as in Law, the Learned Principal CIT has erred in giving direction to the Learned Assessing Officer to verify the facts on the issue which was already verified by the Learned Assessing Officer during the course of assessment proceedings, without appreciating the facts and circumstances of the case. 5) On the fact and circumstances of the case as well as in Law, the Learned Principal CIT has erred in considering the explanation 2 to section 263 as retrospective being in the nature of clarification, without appreciating the facts and circumstances of the case. 6) The appellant craves leave to add, amend, alter or delete the said ground of appeal." 2. Both the parties agre....
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....l in place of Rs. 20 lacs in addition to the determination of the total income at Rs. 56,46,390/- in place of Rs. 47,87,600/-. 4. The assessee contended before the CIT that the Assessing Officer had made required inquiry and submitted before the CIT(A) the copy of the letter addressed to the Assessing Officer submitting evidence during the course of hearing. He further relied on the decision of Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. vs. CIT 243 ITR 83 (SC); that of the jurisdictional High Court in the case of CIT vs. Gabriel India Ltd. 203 ITR 108 (Bom); the Gujarat High Court decision in the case of CIT vs. R K Construction Co. 313 ITR 65 (Guj) and various other decisions. However, the CIT did not agree with the submissions of the assesse and took the view that the Assessing Officer while making the assessment order has not examined the issue of unexplained cash credit in respect of capital introduced by the firm M/s. Dev Steel and treated the assessment order to be erroneous and prejudicial to the interests of the Revenue by moving the assessment to section 263. Ultimately the CIT set aside the assessment order and directed the Assessing Officer to mak....
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....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 expenditure of capital nature. He simply asked the Income-tax Officer to re-examine the matter. That was not permissible. The Tribunal was justified in setting aside the order passed by the Commissioner of Income-tax under section 263." Similar view has been taken by the Hon'ble Allahabad High Court in the case of CIT vs. Mahender Kumar Bansal, 297 ITR 0099 in which respectfully following the decision in the case of CIT vs. Goyal Private Family Specific Trust, 171 ITR 698 (Alld.) has held under para no.12 as under :- "As held by this Court in the case of Goyal Private Family Specific Trust (supra,) we are of the considered opi....
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....ns are eligible under s. 44AD to file their returns under presumptive scheme of taxation. All these persons were produced before the AO in revision proceedings and no question was put to them though their statements on oath were recorded. All these persons have confirmed in revision proceedings that the money was not returned by them to any person and was used for their personal benefit. The payments were made to these persons by banking channels and tax was deducted at source in accordance with law. The assessee has also given complete details with respect to labour expenses called for in assessment proceedings. These details were duly verified by the AO with the books and records. No adverse observation was made by the AO and hence, no addition was made in the regular assessment. The AO has also randomly selected two labourers and examined them and their statements were recorded under s. 131. Since all necessary details were furnished by the assessee, there was no reason for the CIT to invoke the revisional jurisdiction under s. 263. The CIT has not stopped merely by issuance of notice under s. 263. Once compliance is made, he went on issuing notice after notice and certain adver....
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....e, unless the view taken by the Assessing Officer is unsustainable in law." 8. In the case of CIT Vs Sunbeam Auto Ltd, 332 ITR 167 Hon'ble Delhi High court has held that inadequacy of enquiry will not give the jurisdiction to CIT u/s 263. In this Hon'ble High court has held as under :- "The Assessing Officer in the assessment order is not required to give a detailed reason in respect of each and every item of deduction, etc. Whether there was application of mind before allowing the expenditure in question has to be seen. If there was any inquiry, even inadequate that would not by itself give occasion to the Commissioner to pass orders under section 263 of the Income-tax Act, 1961, merely because he has a different opinion in the matter. It is only in cases of lack of inquiry that such a course of action would be open. An order cannot be termed erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, it cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. Section 263 does not visualise a case of substitution of the j....