TaxTMI 
TaxTMI 
2018 (7) TMI 374
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....sions relied upon were carefully perused. 4. Briefly stated, the facts of the case are that the assessee is engaged in the business of transportation of material. The assessee owns 8 big trucks and also hires outside trucks for carrying out its business. Return for the year was filed on 06.10.2008 declaring net income of Rs. 12.94 lakhs. Return was selected for scrutiny assessment and accordingly statutory notices were issued and serviced upon the assessee. Assessment was completed vide order dated 30.11.2010 framed u/s 143(3) of the Act. The operative part of the assessment order is as under: "After discussion and taking in to consideration the information filed by the counsel of the assessee the assessment is completed here under as:- The assessee is an individual and engaged in transportation of goods/ materials for various big companies under his proprietorship firm. During the course of assessment proceedings, it was found that in the profit and loss account the assessee has claimed expenses at Rs. 2,27,552/- towards repair & maintenance and Rs. 83,138/- towards telephone expenses. On eexamination of books of account and bills/vouchers it was foun....
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....ed TDS for Rs. 2J 5,452/- ' against freight receipts. In form 26AS, Freight Receipts were declared at R s. 1,11,51,690/- and TDS at Rs. *2,15,452/-, whereas the assessee had declared Rs, 94,70,611/- for Freight Receipts in his P&L A/c. As such, freight receipts of Rs. 16,81,079/- should have been added back into the income of the assessee, i.e. (Rs. 1,11,51,690 - Rs. 9470,611). The omission has resulted in short levy of tax for Rs. 7,34,247/- per details given below "Tax on Rs. 16,81,079 @ 30% Rs. 5,04,324/- Surcharge (ft) 10% Rs. 50,432/- Total Rs. 5,54,756/- Education Cess @ 3% + Rs. 16,643/- Interest u/s 234.B (w.e.f) Rs. 5,71,399/- 01 .04.2008 to 30. 11.2010) Rs. 1,82,848/- i.e. for 32 months Total Rs. 7,54,247/- The above tax of Rs. 7,54,247/- needs to be revised and recovery from the assessee is proposed, (to be effected u/s i54cfIT Act 1961. As such, the assessee is required to file his objection, if any, to the' proposed .rectification and revision, as aforesaid, within three days of receipts of this Notice,, failing which it would be considered that the assessee accepts the above revision and recovery of the....
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.... captioned notice the assessee has not received freight for Rs. 1,11,51.690/- but total freight receipt of the assessee for the year are as under: Freight on own Tankers (Credited in P&L A/c) Rs. 94,70,611/- Freight on Hired Tankers(As per details enclosed) Rs.,1,97,71,591 TOTAL FREIGHT RECEIPTS Rs. 2,92,42,202/- TDS Deducted on Freight Rs. 6,35,598/- IDS Deducted on Interest Rs. 6,667/- . Total IDS as claimed by assessee in the return of income Rs. 6,42,265/- . 2 Further it is humbly requested that as per the assessment order u/s 143(3) for the above assessment year a sum of Rs. 369650/- is the amount of tax on total income of 1257525/- whereas the TDS as above is Rs. 642265/-. Hence a sum of Rs. 272614/- + interest till date is payable to the assessee. A request for rectification u/s section 154(2) was also filed before your honor on 01-02-201) which is still pending at your end. The assesses has already filed with you the photocopy of all the TDS certificates on 10th July 2009. Any other information, if required, will be submitted. Hope you will find the above in order. Thanking. You ....
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....8-09. Insurance claim likely to be added in total income of the assessee for A.Y 2008-09. The assessee had paid freight to the following persons on which TDS was not deducted: Name of the person Freight paid 1. M/s D.P. Khanna & Sons 700965 2. Shri Jahangir Ahmad 208599 3. Shri Karan malhotra 1051311 4. Shri Mahendra Singh 83247 5. Shri O.P. mahendru 1125170 6. Shri Rajendra Kumar malhotra 1596248 7. M/s Rajendra Kumar & Sons 397327 8. Shri Ranjit Singh 8 96784 9. Mrs. Rekha Khanna 2145926 10. Shri Shaeis Ahmad 219523 Total 8425100 During the year under consideration the assessed had paid Freight to I lit eel Tanker owners Rs. 84,25,100/- to the different Parties, but, TDS was not deducted on such * payments. But, the assessee had debited total Freight Expenses before taken into account in Total Freight Received In P & L Account and on which TDS was also . not deducted by the assessee. The assessee >vas liable to deduct TDS on payment of * Freight Rs. 84, 25,100/- u/s 40 (a)(ia) of Income Tax Act, 1961. Hence, the payment of Freight Rs. 84, 25,100/- on which TDS was not deducted by the assesse....
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....s found in Form No. 26AS is not matching and wanted to add the difference by rectifying the mistake u/s 154 of the Act. However, as mentioned elsewhere till date no action has been taken by the AO, but it cannot be said that the AO never made any verification on this count. 14. It is true that the assessment order is silent on this issue. The Hon'ble Bombay High Court in the case of Gabriel India Ltd 203 ITR 108 has held as under: "The power of suo motu revision under subsection (1) is in the nature of supervisory jurisdiction and the same can be exercised only if the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to exercise power of revision under this sub-section, viz., (i) the order is erroneous; (ii) by virtue of the order being erroneous prejudice has been caused to the interests of the Revenue. It has, therefore, to be considered firstly as to when an order can be said to be erroneous. We find that the expressions "erroneous", "erroneous assessment" and "erroneous judgment" have been defined in Black's Law Dictionary. According to the definition, "erroneous" means "involving error; deviating from the law". "....
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.... motu revision cannot be exercised. Any and every erroneous order cannot be the subject-matter of revision because the second requirement also must be fulfilled. There must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. We, therefore, hold that in order to exercise power under sub-section (1) of section 263 of the Act there must be material before the Commissioner to consider that the order passed by the Income-tax Officer was erroneous in so far as it is prejudicial to the interests of the Revenue. We have already held what is erroneous. It must be an order which is not in accordance with the law or which has been passed by the Income-tax Officer without making any enquiry in undue haste. We have also held as to what is prejudicial to the interests of the Revenue. An order can be said to be prejudicial to the interests of the Revenue if it is not in accordance with the law in consequence whereof the lawful revenue due to the State has not been realised or cannot be realised. There....
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....he Act to the file of Assessing Officer even though the working of allowability of deduction under section 54F is available in the order under section 263 which is not disputed by the assessee before ITAT." 10. And the Hon'ble High Court, after considering the facts, held as under:- "6. It can thus be seen that though final order of assessment was silent on this aspect, the Assessing Officer had carried out inquiries about the nature of sale of land and about the validity of the assessee's claim of deduction under section 54F of the Act. Learned counsel for the Revenue however submitted that these inquiries were confined to the claim of deduction under section 54F of the Act in the context of fulfilling conditions contained therein and may possibly have no relevance to the question whether the sale of land gave rise to a long term capital gain. Looking to the tenor of queries by the Assessing Office and details . A.Y. 2009-10 supplied by the assessee, we are unable to accept such a condition. In that view of the matter, the observation of the Tribunal that the Assessing Officer having made inquiries and when two views are possible, revisional powers could not be....
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....s. 4,52,360/-. 20. The CIT is of the opinion that insurance claim was not received in A.Y 2007-08 and since the assessee is following the mercantile system of account, he was liable to credit insurance claim receivable in profit and loss account on accrual basis 21. Third issue relates to non verification of TDS details in respect of 10 persons to whom total freight paid to hire tanker owners totalling to Rs. 84.24 lakhs. 22. A perusal of the assessment order vis a vis the enquiry made during the assessment proceedings show that the AO did not make any enquiry on these issues and the CIT has rightly assumed jurisdiction u/s 263 of the Act and has rightly set aside these issues to the file of the AO for proper verification. Therefore, to the extent of these issues, we do not find any infirmity in the order framed u/s 263 of the Act and accordingly to this extent the order of the CIT is confirmed. 23. To sum up, on the first issue, the CIT has wrongly assumed jurisdiction u/s 263 of the Act and to that extent the order of the CIT is set aside and that of the AO is restored. On the other two issues, the order of the CIT is upheld. 24. In the result, the appeal of the as....