2018 (6) TMI 1045

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....income was filed on 24.04.2012 declaring total income of Rs. 28,18,860/-. The assessment was completed on 30.01.2015 under Section 143(3) of the Income Tax Act, 1961 at an income of Rs. 29,18,860/-. During the year under consideration, the assessee has shown income from business/profession, Income from House Property, Income from Capital Gain and Income from Other sources. The Pr. CIT noticed that the Assessing Officer had completed the assessment without carrying out necessary and proper enquiry which he ought to have carried out. The Pr. CIT observed that scrutiny of assessment records revealed that the assessee during the previous year purchased 1643 kg. of gold bar for Rs. 3,77,46,98,443/- and sold 1641 kg for Rs. 3,43,89,91,867/-. The average price for purchase of Gold worked out to Rs. 22,97,442/- per kg and average selling price worked out to Rs. 20,95,668/-. Thus, there was difference in sale/purchase price by Rs. 2,01,774/- per kg. There was sharp hike/ difference in the month of Sep., 2011 and March, 2012 in the value of sale price and purchase price, which is tabularized as under: Month Gold bar Purchased Gold bar Sold Difference   Weight (in kg.) Amount ....

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....old 1639 kg Gold bars (.995%) for Rs. 382,33,90,969/- and not 1641 kg for Rs. 343,89,91,867/-. The average price of gold sold comes to Rs. 23,32,758/- and not Rs. 20,95,668/- as mentioned in the notice under Section 263 of the Act. The Ld. AR further submitted that no purchases and sales are effected after 21.03.2012 for one kg. gold bar (.995%). The closing stock as on 31.03.2012 is 2 kg only while entering closing stock of 2 kg, but due to inadvertent clerical mistake entry on 31.03.2012 of 2 kg gold bars was reflected in purchases while actually no purchases were made after 21.03.2012 and similarly due to inadvertent clerical mistake entry on 31.03.2012 of 2 kg gold bar was reflected in sales though actually no sales were made of 2 kg gold bars. Due to above inadvertent clerical mistake purchases and sales are increased by 2 kg. In fact purchase of gold bar (one kg) are 1641 kg and not 1643 kg as mentioned in the notice. Similarly, sales of gold bar are 1639 kg and not sales of gold bars are 1641 kg as mentioned in notice. The Ld. AR further submitted that the assessee is trading in bullion (Gold & Silver) and artificial stones and 100 grams pcs also. The Ld. AR submitted that t....

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....puted on hypothetical way is legally wrong despite the entire position is crystal clear from the details produced before the Pr. CIT. The Ld. AR relied upon the following decisions: i) Amira Pure Foods Pvt. Ltd. vs. Pri. CIT (2018) 63 ITR 355 (Del. Tri.) ii) Narayan Tatu Rane vs. ITO (ITA No. 2690, 2691/Mum/2016 order dated 06.05.2016) 6. The Ld. DR relied upon the order of Pr. CIT. The Ld. DR also relied upon the following decisions: 1) Supreme Court in the case of Deniel Merchants P. Ltd. vs. ITO (Appeal No. 2396/2017) dated 29.11.2017; 2) Malabar Industrial Co. Ltd. vs. CIT (2000) 109 Taxman 66 (SC)/(2000) 243 ITR 83 (SC)/(2000) 159 CTR 1 (SC); 3) Rajmandir Estates (P) Ltd. vs. PCIt [70 taxmann.com 124 (Calcutta)/[2016] 240 Taxman 306 (Calcutta)/[2016] 386 ITR 162 (Calcutta)/[2016] 287 CTR 512]; 4) Rajmandir Estates (P) Ltd. vs. PCIT (2017) 77 taxmann.com 285 (SC)/[2017] 245 Taxman 127 (SC); 5) Shree Manjunathesware Packing Products & Camphor Works vs. CIT [1998] 96 Taxman 1 (SC)/[1998] 231 ITR 53 (SC)/[1997] 143 CTR 406 (SC) 7. We have heard both the parties and perused all the records. In the present case, it is pertinent to note that the assessee admitted that....

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.... by the assessee which is admitted by the assessee before the Pr. CIT that there is a clerical error. Regarding the Mumbai Tribunal's decision in case of the Narayan Tatu Rane (supra) also will not be applicable in the present case as the Assessing Officer after reopening the assessment u/s 147 of the Act, has taken the cognizance of the incriminating documents. Thus, both the case laws cited by the assessee will not be applicable in the present case. As regard the case laws submitted by the Ld. DR of the Apex Court as well as of the Jurisdictional High Court the same are applicable in the case where the Assessing Officer fails in his/her duty to assess the income properly and because of that there is a prejudicial interest of the Revenue. The Pri. CIT has looked into the aspect of the Assessment Order in the present case to the extent of erroneous & prejudicial to the interest of the Revenue and thus, Section 263 of the Act is attracted in the present case. Section 263 of the Act is not invoked simply for correcting mistake or error committed by the Assessing Officer in the present case. It can be observed that the Pr. CIT has considered all the contentions of the assessee and the....