2019 (5) TMI 697

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....he respondent-assessee and thereby reversed the order the CIT, Alwar dated 15.3.2016 and restored the assessment order for the assessment year 2011-12 made under Section 143 of the Act on 24.3.2014 by the Assessing Officer. The Assessing Officer by the aforesaid order enhanced the trading income of 2,99,820/- to Rs. 4,55,556/- by making additions out of the various expenses. The CIT, Alwar issued notice u/s.263 dated 25.01.2016 by invoking its revisional power because in its view, the assessment order was "prejudicial to the interests of Revenue" since the Assessing Officer had not made proper enquiry on various issues. The respondent-assessee contested the notice and filed reply. The CIT however did not upheld the arguments of the asses....

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....ncurred with the view taken by the CIT and held in para 7 as under: "7. The Bench have heard both the sides on the issue, perused the material available on the record and also perused the case laws relied upon. Assessment year 2011- 12 was the first year of operation of the assessee company. It was a partnership firm having 17 partners and the share of the each partner was specified as evidence from page No.28 of the paper book. The assessee firm commenced the business of contractor ship in the name and style of Hari Om Stones with Mining Department and Sales tax department to collect to revenue for government. The partnership deed is placed at page Nos.26 to 31 of the paper book. This partnership deed also specifies in para 10 tha....

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....of its claim made in P&L account. Therefore, in our considered view, the order passed by the Assessing Officer U/s 143(3) of the Act on 24/3/2014 was not an erroneous order, which could be said to be prejudicial to the interest of the revenue. Considering the ratio laid down in various case laws relied upon, we set aside the order passed by the ld. Pr. CIT." We are inclined to concur with the view expressed by the ITAT as the order of assessment indicate that the Assessing Officer has made enquiry on various issues and assessee submitted the details therefor. The enquiry pertained to the remuneration of the partners and the expenses/receipts. The Assessing Officer enhanced the return income of the assessee of Rs. 2,99,820/- to Rs. 4,55,5....

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....confined to loss of tax. The High Court of Calcutta in Dawjee Dadabhoy & Co. v. S.P. Jain (1957) 31 ITR 872 (Cal), the High Court of Karnataka in CIT v. T. Narayana Pai (1975) 98 ITR 422 (Kant), the High Court of Bombay in CIT v. Gabriel India Ltd (1993) 203 ITR 108 (Bom), and the High Court of Gujarat in CIT v. Minalben S. Parikh (1995) 215 ITR 81 (Guj) treated loss of tax as prejudicial to the interests of the Revenue. 9. Mr Abraham relied on the judgment of the Division Bench of the High Court of Madras in Venkatakrishna Rice Co. v. CIT (1987) 163 ITR 129 (Mad) interpreting "prejudicial to the interests of the Revenue". The High Court held: "In this context, (it must) be regarded as involving a conception of acts or ord....