TaxTMI 
TaxTMI 
2019 (12) TMI 913
X X X X Extracts X X X X
X X X X Extracts X X X X
....Year 2014-15 on 06.12.2014 declaring a total income of Rs. 11,98,290/-. Thereafter, the case was selected for scrutiny under CASS. The assessment order under section 143(3) of the I.T. Act, 1961 was passed by AO on 05.12.2016 at an assessed income of Rs,73,95,440/-. 4. Later on, ld PCIT has exercised his jurisdiction under section 263 of the Act. The ld PCIT, on perusal of the assessment record noticed that the assessee had claimed labour charges amounting to Rs. 26,25,000/-. The ld PCIT further noticed that this expense is altogether a new introduction in the assessment year under consideration and no such claim was made in earlier years by the assessee firm though the nature of business remains unchanged. The ld PCIT also noticed that one of the partners of the assessee-firm, Smt. Manjushree Chakraborty had introduced capital of Rs. 16,57,666/- during the year under consideration. Such introduction of capital had not been enquired into by the A.O. while framing the assessment order; no relevant bank statement, cash flow and /or consolidated personal Balance Sheet was furnished by the A.O. Keeping in line with the facts of the case, the Assessing Officer was required to make....
X X X X Extracts X X X X
X X X X Extracts X X X X
....submitted before the Bench that AO has not conducted sufficient hearings to examine the genuineness of labour charges as well as genuineness of introduction of capital by one of the partners in the partnership firm therefore, order passed by the AO is erroneous and prejudicial to the interest of Revenue. Apart from this, ld DR has primarily reiterated the stand taken by the ld PCIT which we have already noted in our earlier para and the same is not being repeated for the sake of brevity. 10. We have heard both the parties and persued the materials available on record. First of all, we have to see whether the requisite jurisdiction necessary to assume revisional jurisdiction is there existing before the Pr. CIT to exercise his power. For that, we have to examine as to whether in the first place the order of the Assessing Officer found fault by the Principal CIT is erroneous as well as prejudicial to the interest of the Revenue. For that, let us take the guidance of judicial precedence laid down by the Hon'ble Apex Court in Malabar Industries Ltd. vs. CIT [2000] 243 ITR 83(SC) wherein their Lordship have held that twin conditions needs to be satisfied before exercising revisional ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ences and documents relating to labour charges. Besides, the assessee explained the labour charges stating that these were incurred for the purposes of business. The veracity of the introduction of capital by one of the partners, Smt. Manushree Chakraborty, has also been examined by AO in detail. Therefore, order passed by the AO is not erroneous. 12. So far the verification of labour charges of Rs. 26,25,000/- is concerned, we note that as per 'order sheet' of the Assessing Officer, the assessee`s AR appeared before the AO and the AO has discussed with the authorized representative of the assessee and subsequently issued statutory notices u/s 142(1) dated 16.11.2016 along with questionnaire of hearing dated 28.04.2016. In response to the notice u/s 142(1), the assessee`s AR appeared and filed before the AO the copy of income tax, bank details, commission details, audit report in Form No.3CB and 3CD, profit & loss account, balance sheet, copy of partnership deed, and details of sundry debtors and creditors. In subsequent dates, the assessee filed before the Assessing Officer the required details as sought by notice u/s 142(1) of the Act. On 02.12.2016, vide order sheet, of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....idering the reply and documents and after verification of the same and after due application of mind passed the assessment order, so it cannot be termed as erroneous and prejudicial to the interest of the revenue. So, the Ld. CIT's finding fault with the order of the AO is erroneous as well as prejudicial to the interest of revenue on account of lack of inquiry has to fail. Therefore, at this juncture, it is pertinent to mention here that the way in which assessment should be finalized falls in the exclusive domain of the Assessing officer. Section 142(1) speaks of inquiry before assessment and gives immense power to the A.O. for conducting enquiry. Therefore, the A.O. u/s 142(1)(ii) & (iii) can ask the assessee almost any information which he think necessary for passing assessment order. The assessing officer has conducted a detailed scrutiny and thorough enquiry in respect of capital introduced and labour charges. After going through the information furnished by assessee, we note that it is not a case of inadequate scrutiny as noted by the ld CIT in his order U/s 263 of the Act. Therefore, order passed by the AO is neither erroneous nor prejudicial to the interest of Revenu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al in the case of Smt. Juthika Kar vs. ITO [I.T.A. No.1128/Kol/2009, dated 16.5.2012], wherein it has been held as under :- "8. With the leave and consent of my learned brother, however, I may add a few words to my learned brother's analysis of Hon'ble Delhi High Court's judgment in the case of Gee Vee Enterprises (supra). Undoubtedly, as noted by their Lordships in that case, an Assessing officer cannot remain passive in the face of a return which is apparently in order but calls for further enquiry. In such a case, revision proceedings can indeed be initiated and there seems to be no serious controversy in this respect. The fine point, however, one must bear in mind is the distinction between adequate enquiries not having been conducted and the result of such enquiries not having been dealt with by way of a speaking order or not having resulted in the conclusion that could be, in the wisdom of a person other than the Assessing officer, more appropriate. Here is a case in which sufficient enquiries were conducted. As learned brother has rightly noted, the Assessing officer called for specific details, confirmations and even copies of bills. It could n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....see firm appeared on the stipulated date and time. Subsequently, statutory notic-142(1) dated 11.04.2016 Ked alongwith questionnaire fixing date of hearing on 28.04.2016 at 12.30 28.4.16 02/06/16 14/05/16 Yes the Tax Office 177032819 even mo written Sutomivasion an Nome appeared. found to have been fike. on Re-fixation letter isoned questionna wait a request to appea acked for through details as wila u with notice whs-1426) de. 16-11-15. Mr. Dipak kr. Gueen, A/R appenor and producee kuce Power of Attorney following tee Q Cii) Copy of (iii) Civ> ITR- firm Baure detail without statement Conrymission creaved form varices Customers (v) tutit report in 3CD with audited (pons A/C (35) (vi) The your 300 ape Photo Copy of Details of Parefresh Dead. ={debtors & of Geditors Kumar 14/6/16. 2:00 Pr The Case to adjourned file 15/07/14 at K Mr. Dipak appeared tim Coxments D and producte" rece asa Lesce folloing CPO Partnerse return fike 2014-pacity for the أمة الى However, the ....