AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (11) TMI 1421
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....ufacture, purchase, sale and export of sports goods. The original assessment was completed u/s 143(3) of the Act at an income of Rs. 3,47,02,620/- vide order dated 09.11.2010. Subsequently the Ld. CIT, Meerut issued a show cause notice u/s 263 of the Act on the ground that the assessee had paid an amount of Rs. 25,87,500/- to cricket players during the year which was not of any value to the business of the assessee and further the AO had failed to make an inquiry in this regard. The Ld. CIT partly set aside the assessment order with the direction to consider the admissibility and reasonableness of these expenses. The assessee is in appeal against this order of the Ld. CIT in ITA No. 3225/Del/2013 and has raised the following grounds of appeal :- "1.That the learned Commissioner of Income Tax erred in law and on facts in invoking the provisions of Section 263 of the Income Tax Act, 1961 and passing the order dated 21.03.2013. The order passed and the various directions given are bad in law, arbitrary, erroneous and uncalled for in view of the facts and circumstances of the case and the material on record. The order therefore, deserves to be quashed. 2. That in view of the writt....
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....1/-. The assessee preferred an appeal before Ld. CIT (A) who partly allowed assessee's appeal by directing deletion of addition of Rs. 25,00,547/-. However, the Ld. CIT (A) upheld the other two additions. Against this adjudication by the Ld. CIT(A), the assessee is in appeal before the ITAT in ITA No. 695/Del/2016 and has raised the following grounds of appeal :- "1. That on the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals) is not justified in holding that the expenditure of Rs. 25,87,500/- on payments made to cricket players, booked by the appellant under the head 'Advertisement and Publicity' was deferred capital expenditure and therefore, restricting the claim to 1/5 of Rs. 25,87,500/- i.e. Rs. 5,17,500/- to be allowable, and remaining amount of Rs. 20,70,000/- to be added to the income of the assessee. 2. That on the facts and circumstances of the case, the learned Commissioner of Incom Tax (Appeals) is further not justified in sustaining the addition of Rs. 98,531/- on account of 10% of expenses claimed under the head "Conservancy & Gardening Expenses". 3.0 With respect to the assessee's appeal against the 263 order, the Ld. A....
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....unt of gardening expenses, it was submitted that this was an ad hoc disallowance and the same could not be sustained in absence of specific finding pointing out specific defect/s in the books of accounts. The Ld. Authorised Representative prayed that both the appeals of the assessee deserved to be allowed. 4.0 In response, the Ld. CIT-DR submitted that the payments to cricket players were made on account of fee for displaying of the assessee's company's logo which helped in improving the brand value of the company and, therefore, the AO had erred in allowing the entire expenditure rather than allowing 1/5of the expenditure. The Ld. CIT-DR submitted that the Ld. CIT had rightly initiated the proceedings u/s 263 of the Act as the AO had not carried out proper inquiry in this regard. The Ld. CIT-DR also placed reliance on number of judicial precedents to support his contention that the assumption of jurisdiction u/s 263 of the Act by the Ld. CIT was valid. 4.1 With respect to assessee's appeal challenging the quantum addition made subsequent to the order passed u/s 263 of the Act, reliance was placed on the order of the Ld. CIT (A) as well as that of the AO. 5.0 We have heard the r....
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....written differently or more elaborately. The Section does not visualize the substitution of the judgment of the Commissioner for that of the Assessing Officer, who passed the order unless the decision is not in accordance with law. Then again, any and every erroneous order cannot be the subject matter of revision because the second requirement also must be fulfilled. There must be material on record to show that tax which was lawfully exigible has not been imposed [See Gabriel India Ltd. (supra)]. However, the expression "prejudicial to the interest of the revenue", as held by the Hon'ble Supreme Court in the Malabar Industrial Co. Ltd.'s case, is not an expression of art and is not defined in the Act and, therefore, must be understood in its ordinary meaning. It is of wide import and is not confined to the loss of tax [see Dawjee Dadabhoy & Co. (supra), CIT vs. T. Narayana Pai (1975) 98 ITR 422 (KAR), CIT vs. Gabriel India Ltd. (supra) and CIT vs. Smt. Minalben S. Parikh, (1995) 215 ITR 81 (Guj)]. 5.3 At the same time, the words "prejudicial to the interest of the revenue", as observed in Dawjee Dadabhoy and Co. vs. S.P. Jain, (1957) 311 ITR 872 (Calcutta), can only mean that....
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....ssed the order unless the decision is held to be erroneous. Cases may be visualized where the Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at conclusion and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion. x x x x 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 incorrec....
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.... mind to the facts and circumstances of the case and determines the income either by making the accounts or by making some estimates himself. The commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer was on lower side and, left to the commissioner, he would have estimated the income at a higher figure that the one determined by the Assessing Officer. That would not vest the Commissioner with the power to re-examine the accounts and determine the income himself at a higher figure. Further in the case of Infosys Technologies V JCIT (Asst) (2006) 286 ITR (AT) 211, the Bangalore Bench of the ITAT held that where the A.O as examined and considered and issue, though not mentioned in the assessment order, it cannot be said that the order passed was erroneous. In CIT v Gabriel India Ltd. (1993) 203 ITR 108 (Bom), the Hon'ble Bombay High Court held that once the Assessing Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at a conclusion, such a conclusion cannot be considered erroneous simply because the commissioner does not feel satisfied with the conclusion. It may be that in the opinion of the c....