TaxTMI 
TaxTMI 
2018 (4) TMI 1638
X X X X Extracts X X X X
X X X X Extracts X X X X
....ving regard to facts and circumstances of the case, the Ld. CIT has erred in law and on facts in assuming jurisdiction under section 263 and has further erred in holding that the assessment passed by Ld. AO was erroneous and prejudicial to the interest of revenue and further erred in issuing direction to Ld. AO to examine the issue of charged to income tax of interest accrued on fixed deposit receipts. iii. that having regard to facts and circumstances of the case the Ld. CIT has erred in law and on facts in assuming jurisdiction under section 263 and has further erred in holding that the assessment order passed by Ld. AO was erroneous and prejudicial to the interest of revenue and further erred in issuing direction to Ld. AO with respect to various decisions of payment of Rs. 4 00000/- to Shri Om Prakash Bhatia. iv. That having regard to facts and circumstances of the case, the Ld. CIT has erred in law and on facts in assuming jurisdiction under section 263 and has further erred in holding that the assessment order passed by Ld. AO was erroneous and prejudicial to the interest of revenue and the further erred in issuing the direction to Ld. AO with respect to mak....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssee has made sales in cash on 4 different dates amounting in all to only Rs. 26963/- whereas on various date the assessee has deposited cash of Rs. 1655000/- ii. The assessee has made one fixed deposit receipt in the month of June 2004 but no interest income in this regard has been declared in the return of income for the year ended on 31/3/2005 and the Ld. assessing officer has not examined this aspect. iii. Assessee has paid Rs. 4 Lacs to one party but the same has not been credited to the party‟s account iv. That assessee has filed the bank statement without any narration. Therefore, the Ld. assessing officer has not verified bank statement. Reply of assessee before CIT against show cause notice 05. Assessee submitted before the Ld. CIT that deposits in bank accounts are out of the balance available in cashbook. That the fixed deposit made by the assessee in the month of June 2004 and interest has been recognized in the next assessment year after the expiry of one year from the date of making the fixed deposit receipt. Regarding the loan of Rs. 4 Lacs it was submitted that assessee has paid the above some on 15/3/2005 which is in fact has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion. Submission of assessee in appeal 10. Therefore, assessee aggrieved with the order of the Ld. CIT has preferred an appeal before us challenging the order under section 263 of the income tax act. The Ld. authorized representative submitted that each and every aspect which has been raised by the Ld. CIT into 263 proceedings have already been examined by the Ld. assessing officer and therefore there is no error in the order of the Ld. assessing officer much less it is prejudicial to the interest of the revenue. 11. He referred to the assessment order passed by the Ld. assessing officer and stated that the assessee has submitted complete details before the Ld. assessing officer he referred to page No. 11 of the assessment order wherein the addition with respect to the suppression of sales have been made by the Ld. assessing officer. He submitted that complete quantitative details of the opening stock, purchases and consumption of raw material, production and sale of finished goods were examined by the Ld. assessing officer and from that the Ld. assessing officer has held that as there was no closing stock, hence there was a difference of 46401 KG of consumption of raw mat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s made by the assessee in cash from various suppliers whose accounts are available with the assessing officer. He therefore submitted that there is no lack of Inquiry on this point and which the assessing officer duly examined during the course of assessment proceedings. 12. With respect to the accounting of the interest on the fixed deposits, he submitted that during the year assessee is taken on FDR of Rs. 2 525000 and interest income on the same has been recognized after the expiry of one year from the date of putting the FDR. He submitted that the interest income accrued to the assessee at the end of the maturity of the fixed deposit receipt. In the any event, he submitted that the income has already been disclosed in the next year when the tax deduction at source certificates have been received from the banker and therefore it cannot be said that there is any error in the order of the Ld. assessing officer. He submitted that even otherwise the interest on fixed deposits can be charged to tax on the receipt basis or on accrual basis, and in the present case the interest is accrued to the assessee only at the end of the maturity period otherwise the interest does not accrue t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ired into during the original assessment. Consequently, it could not be held that such a view was erroneous, even if another view was possible. It was argued that courts have held that once relevant details/documents are available on record pertaining to the original assessment, and if on the basis of material available on record, a view could be formed by the Assessing Officer, it may not even be necessary for the Assessing Officer to conduct detailed enquiry ; in such circumstances, it cannot be presumed that the Assessing Officer had not examined the claims of the assessee. It was argued that this would be the position for all four items of revision. Submission of revenue 18. The Ld. CIT DR vehemently objected to the submission of the assessee and stated that the books of accounts are not produced before the assessing officer during the course of assessment proceedings. She submitted that the assessee was asked to produce the complete set of books of accounts with all the bills and vouchers however, the assessee has not produced them at all before the assessing officer and the assessment has been completed by the AO without looking into the books of accounts. With respect ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Further, where the Ld. assessing officer has made some enquiry and has reached at a conclusion. Therefore on debatable issues and where there is absence of‟ Lack of Inquiry‟ the powers of the CIT cannot be exercised under section 263 of the act. There exists a difference between „Lack of Inquiry‟ and „inadequate Inquiry‟. In the present case on all the four issues raised by the Ld. CIT, in the paper book submitted by the assessee or in the arguments raised by the Ld. authorised representative we did not find that Ld. AO has made any enquiry on all the 4 issues. Therefore, according to us there is no Inquiry made by the Ld. assessing officer on the issues raised by CIT in proceedings under section 263 of the act. The arguments of Ld. Authorized representative on the issue with respect to cash deposited in the bank account, loan repaid, bank interest on fixed deposit receipt and absence of narration in the bank statements were more on the aspect that no such addition can be made in the hands of the assessee. However nothing is lead before us that makes us to ascertain that Ld. AO during the course of assessment proceedings have inquired about all....