TaxTMI 
TaxTMI 
2018 (9) TMI 1314
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....d down .by the honorable Supreme Court of India in the case of MALABAR INDUSTRIAL CO. LTD. Vs. COMMISSIONER OF INCOME TAX(2000)-243-ITR-0083-(SC). 3. The Ld. Pr. CIT(Central) before passing the revision order u/s 263 of the Act, ought to have appreciated that the opinion of the audit party cannot be regarded as new information or fact in his possession. 4. The Ld. Pr. CIT(Central) before invoking the provisions of section 263 of the Act based on audit objections, ought to have followed the ratio laid down by the Apex Court in case of Indian and Eastern News Paper Society Vs. CIT[(1979) 119 ITR 0996 (S.C)]. 5. The Ld. Pro CIT(Central) ought to have appreciated that all the facts relating to the impugned issues are very much available with the AO at the time of passing order that is subjected to the revision. 6. The Ld. Pr. CIT(Central) erred in passing the order U Is 263 of the Act by forming mere change of opinion and without considering the fact that the original assessment had been completed u/s 143(3) of the Act, 1961 after careful verification of impugned issues. 7. Without prejudice to the other grounds, The Ld. Pr. CIT(Central), er....
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....ings u/s 263 of the Act cannot be initiated based on the Audit objection." 4. Brief facts of the case are that assessee being a Tata Motors dealer, filed its return of income for AY 2010-11 electronically on 30/09/2010 declaring income of Rs. 4,18,57,810/-. The assessment was completed u/s 143(3) of the Act making certain additions and disallowances. 4.1 Thereafter, Pr. CIT perused the assessment records of the assessee u/s 263 of the Act and observed that i) the assessee claimed depreciation on trucks own usage @ 30% instead of 15% as entitled, ii) the assessee invested in equity shares at Rs. 8,05,35,000/- the proportionate interest of Rs. 25,16,719/- was required to be disallowed u/s 14A of the Act, but the AO has not examined this issue, and iii) as seen from the balance sheet, capital wok-in-progress shown at Rs. 1,00,18,000/- and the proportionate interest of Rs. 12,52,250/- was not capitalized. Observing that the AO has not examined these issues u/s 143(3), the Pr. CIT held the assessment order to be erroneous in so far as it is prejudicial to the interests of revenue and accordingly issued a show case notice to the assessee. 4.2 In reply to the show cause notice, t....
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....eted u/s 143(3) of the Act and the AO had called for certain details in his questionnaire, but the details with regard to the issues pointed out by the Pr. CIT in his order u/s 263 were not called for and verified by the AO. Assessee, in fact, in reply to the notice u/s 143(3) rws 263 had admitted that it had made an erroneous claim of depreciation @ 30% instead of 15%. Thus, it is clear that on this issue itself, the AO has not made any verification. Similarly, with regard to other issues also we do not find any verification made by the AO. Although the ld. Counsel for the assessee filed additional grounds of appeal and also argued that revision cannot be done on the basis of audit objection, there is no material before us with regard to such audit objection on the basis of which revision has been made. In the case of CIT Vs. Amitabh Bachchan (supra), the Hon'ble Supreme Court held as under: "Held, allowing the appeals, (i) that the Tribunal had not recorded any finding that in the Course of the suo motu revisional proceedings, opportunity of hearing was not afforded to the assessee or that the assessee was denied an opportunity to contest the facts on the basis of which ....
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....nclined to accept the contentions of the ld. DR and uphold the order passed u/s 263 of the Act. Assessee's appeal is accordingly dismissed. 9. In ITA No. 282/Hyd/2017 against the additions and disallowances the assessment completed u/s 143(3) r.w.s. 263 of the IT Act, the assessee has raised the following grounds of appeal: "1. The order of the Commissioner of Income Tax (Appeals) is erroneous both on facts and in law. 2. The CIT(A) erred in confirming the order passed u/s 143(3) rws 263 of the Act, without appreciating that order has emanated on opinion of the audit party which is invalid. 3. The CIT(A) erred in not adjudicating on ground no 3 raised with regard the audit objection. 4. The CIT(A) ought to have appreciated that all the facts relating to the impugned issues were very much available with the AO at the time of passing the order that was subjected to the revision. 5. The CIT(A) erred in confirming the order passed u] s 143(3) rws 263 of the Act by forming mere change of opinion and without appreciating the fact that the original assessment had been completed u/s 143 (3) of the Act,1961 after careful verification of the im....