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2018 (11) TMI 1419
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....aipur has erred in holding that the order passed by the learned Assessing Officer under section 143(3) of the Income-tax Act, 1961 dated January 29, 2016 was erroneous and prejudice to the interests of the Revenue. 3. In the facts and in the circumstances of the case the learned Principal Commissioner of Income-tax, Jaipur-II, Jaipur has erred in holding that the learned Assessing Officer has erred in granting deduction under section 10AA on the stated sales of the SEZ unit under the given facts. 4. The assessee craves your indulgence to add, amend or alter all or any grounds of appeal before or at the time of hearing. 2. The assessee filed its return of income on September 30, 2013 declaring a total income of Rs. 71,79,770. The assessee claimed exemption under section 10AA which was allowed by the Assessing Officer while completing the assessment under section 143(3) on January 29, 2016. Subsequently, the learned Principal Commissioner of Income-tax on examination of assessment record noted that the Assessing Officer has allowed the claim of deduction under section 10AA of the Act without proper examination of the matter and particularly the eligibility for cl....
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.... of time is not based on any tangible material or fact. The learned authorised representative has referred to the purchase bills and sales vouchers which were duly approved by the SEZ authorities and submitted that when all the transactions of purchase and sale at the SEZ unit were carried out after approval of the SEZ authorities, then there was no question of suspecting the purchases and sales made by the assessee from the SEZ unit. The Assessing Officer thoroughly examined the claim of the assessee and the relevant record. The assessee filed the replies dated July 13, 2015 and July 21, 2015 before the Assessing Officer in respect of the query raised by the Assessing Officer. All these replies filed by the assessee are available in the assessment record. The assessee specifically explained the business address of the firm at H-115, SEZ-II, Sitapura, Jaipur and also filed the copy of LOA for SEZ to show the setting up of a new unit at the SEZ. The agreement for purchase and sale of SEZ was also furnished. The Assessing Officer after making necessary enquiry and examination of the relevant record was satisfied with the claim of the assessee. The learned authorised representative ha....
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.... machinery, therefore, only the workers had carried out the manufacturing job with their own tools. The assessee, however, purchased the machinery and tools such as polish machine and other tools required for the manufacturing activity. He has referred the list of articles and tools which were purchased by the assessee. Thus the learned authorised representative has submitted that the assessee produced the entire relevant record in support of the claim of manufacturing done by the assessee at the SEZ unit and sale of the finished goods which is duly approved by the SEZ authorities. The purchases made by the assessee have not been disputed even by the learned Principal Commissioner of Income-tax though he has doubted only the manufacturing activity done by the assessee within the short span of time. Since the assessee got all the jewellery manufactured through various artisans/workers, therefore, raising the objection and doubt by the learned Principal Commissioner of Income-tax is without any basis. The Principal Commissioner of Income-tax has misunderstood the facts regarding purchase and sale of the goods by considering only the gross weight of the sold jewellery without consider....
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....EZ unit. All these facts were required to be verified by the Assessing Officer. However, when the Assessing Officer has not conducted any enquiry then the said order passed by the Assessing Officer suffers from error and liable to be set aside. He has relied upon the impugned order of the learned Principal Commissioner of Income-tax. 5. We have considered the rival submissions as well as the relevant material on record. The Assessing Officer has accepted the returned income while passing the scrutiny assessment order dated January 29, 2016. However, the Assessing Officer has stated in the assessment order that a notice under section 142 as well as under section 142(1) along with a query letter was issued to the assessee. In compliance, the assessee attended through its authorised representative and filed the necessary details on various queries made by the Assessing Officer. The relevant part of the Assessing Officer's order is as under : "The case was selected for scrutiny and notice under section 143(2) was issued on September 3, 2014 by the Assistant Commissioner of Income-tax, Circle-5, Jaipur which was served on September 9, 2014. On change of incumbent again n....
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....ers in the prescribed format is enclosed herewith. Copy of the partner's capital account is also enclosed here with. (page 3 to 8) 7. That the assessee is maintained current account with ICICI Bank, C Scheme, Jaipur (001205000369) and ICICI Bank (001205030972). (Page No. 9) 8. N.A. 9. That the most of work of manufacturing process is done manually so the assessee is not maintained any register of assets. 10. The assessee is used mainly gold, silver, diamond, precious and semi-precious stone as raw material for gold and silver jewellery. During the financial year the assessee has purchased raw material more than Rs. 10 lakh from the following suppliers. (pages 10 to 11) (a) Sheeta Manufacturing Pvt. Ltd. (b) Mohan Lal Mahendra Kumar Jewelers 11. The assessee is engaged in business of trading and manufac turing of silver and gold jewellery studded with diamond and stone. The main customer of the assessee is Jahangir Singh Noor and Sanscage Ltd. 12. N.A 13. N.A 14. That during the financial year there is no loan raised by the assessee-firm. 15. N.A 16. N.A 17. N.A ....
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....ccount. Complete details of loans and advances made along with loan amount and interest rate is enclosed herewith. (page 54) 7. Copy of extension letter of LOA is enclosed herewith. (page 55) 8. As per the provisions of the Wealth-tax Act 1957 a partnership firm is not liable for wealth-tax return. Kindly do the needful and oblige. Thanking you, Yours faithfully, Date: 21-7-2015 Place : Jaipur (S. L. Poddar) Counsel for the assessee It is manifest from the replies filed by the assessee that the assessee has clearly explained all the details of the partnership firm, nature of busi ness of trading and manufacturing and further the SEZ unit of the assessee at Sitapura, Jaipur. Thus the assessee has explained the facts that the original business of the partnership firm was being carried out from the premises A-129, Janta Colony, Jaipur and a new SEZ unit was set up at H- 115, SEZ-II, Sitapura, Jaipur. The assessee also produced LOA of SEZ and manufacturing process being done manually. Therefore, the assessee was not maintaining any register of assets. The comparative turnover details were also pro....
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....t weight at 686.770 gms. The learned Principal Commissioner of Income-tax has further noted that the total gold purchased during the year was 809.89 grams whereas the sale of jewellery having gold of 1087.388 gms. Thus according to the learned Principal Commissioner of Income-tax, the sales shown from the SEZ unit appar ently exceeds the availability of gold at the SEZ unit. All these facts as understood by the learned Principal Commissioner of Income-tax led to the revision of the assessment order. We find that as per the details of purchase and sale bills, the learned Principal Commissioner of Income-tax has taken the gold weight of jewellery sold vide bill dated May 31, 2012 at 686.770 gms. However, the pure gold weight of the said jewellery was 402.399 gms as against the purchases of 509.89 gms vide bill dated May 23, 2012. These details are also shown in the sale invoices that the gold content is only 402.399 gms as per the bill dated May 31, 2012 as against the weight of the gold taken by the learned Principal Commissioner of Income-tax at 686.770 gms. Thus the difference in the weight taken by the learned Principal Commissioner of Income-tax is due to the purity of gold. It ....
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....d lying at Janta Colony office since 2006. The assessee has also shown that the stocks lying at the Janta Colony office was not disturbed either by the Assessing Officer or by the learned Principal Commissioner of Income-tax. These facts were avail able on the assessment record. We find that all the relevant details as well as documents were available on the assessment record and the learned Principal Commissioner of Income-tax has also not pointed out that any further record was required for examination of the claim of deduction under section 10AA of the Act. Rather, the assessment order was set aside on the ground that the Assessing Officer has passed the order without conducting a proper enquiry in respect of the claim made by the assessee which makes the order erroneous and prejudicial to the interests of the Revenue. The learned Principal Commissioner of Income-tax has not given a concluding finding that the claim of the assessee is not allowable but the matter was set aside to the record of the Assessing Officer for re-doing the same. Thus once the entire record relevant to the claim of deduction under section 10AA was available on the assessment record and the Assessing Offi....
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....sed by the Assessing Officer on the merits is erroneous and prejudicial to the interests of the Revenue. The Assessing Officer has conducted an enquiry and took a view which is a possible view under the law then even if the view taken by the Assessing Officer is not acceptable to the learned Principal Commissioner of Income- tax, it would not render the assessment as erroneous and prejudicial to the interests of the Revenue so as to empower the Commissioner to invoke the provisions of section 263 of the Act. Undisputedly, when the case in hand is not in the category of lack of enquiry, then the learned Principal Commissioner of Income-tax cannot exercise his jurisdiction under section 263 for asking the Assessing Officer to re-do the assessment. This view is supported by the decision of the hon'ble Delhi High Court in the case of ITO v. DG Housing Projects Ltd. [2012] 343 ITR 329 (Delhi) wherein the hon'ble High Court has held in paragraph 18 as under (page 340) : "18. It is in this context that the Supreme Court in Malabar Indus trial Co. Ltd. v. CIT [2000] 243 ITR 83 (SC) ; 109 Taxman 66 (SC), had observed that the phrase 'prejudicial to the interests of the ....