2019 (11) TMI 413

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....n 263 of the Income Tax Act, 1961 (hereinafter called as 'Act'). 2. This appeal was admitted on 07.05.2012 on following question of law:- "1. Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal was justified in law in allowing the appeal of the assessee based upon their conclusion that the order of the A.O. was neither erroneous nor prejudicial to the interest of the revenue on the issue relating to deposits introduced by the members of the AOP? 3. Whether on the facts in the circumstances of the case, the Hon'ble Income Tax Appellate Tribunal was justified in law in holding that assumption of jurisdiction by the CIT, relating to allowance of expenses by the AO w....

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....re this Court. 5. Sri Shubham Agarwal, learned counsel appearing for the revenue submitted that Tax Audit Report filed by assessee along with return under Section 44AB of the Act, the statutory auditors have recorded after examining books of accounts that correctness of third party transactions recorded in books of accounts was subject to verification, as the AO had not verified the accounts, as such the order passed by CIT under Section 263 for fresh assessment was in the interest of revenue and the order of assessment being erroneous and prejudicial to the interest of revenue was rightly remanded by the CIT. 6. It was also contended that ITAT had erred in law and facts by allowing appeal of assessee based on their conclusion that or....

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....welfare expenses, telephone expenses, travelling expenses and wage and freight expenses. The CIT while exercising power under Section 263 of the Act had remanded the matter back to AO on the ground that necessary enquiries were not conducted and he failed to apply his mind in all perspective on the issues mentioned in Paras 3(I), 3(II), 3(III) and 3(IV) of the show-cause notice dated 17.03.2008, as such the assessment order was set aside restoring file to AO for further verification. 10. The Tribunal while dealing with first substantial question of law as regards deposits introduced by members of AOP has recorded a categorical finding and held that CIT has not considered the assessment order as erroneous and prejudicial to the interest o....

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.... 12. We find that the Tribunal on this issue has relied upon the assessment order dated 12.04.2006 and set aside the order passed by CIT under Section 263 of the Act on the ground that CIT has not refuted the observation of the assessment order which otherwise confirmed without doubt that AO scrutinised the books of accounts, vouchers as well as other details before him, and set aside the remand order. 13. We have carefully considered the rival submissions made by counsel for the parties and perused the material on record. 14. The second substantial question of law in regard to the allowance of expenses by AO without proper verification is concerned, we find that assessment order does not reveal the fact that the AO had made any verif....