TaxTMI 
TaxTMI 
2020 (10) TMI 609
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....Pr. CIT as erroneous and prejudicial to the interest to the Revenue and was set aside to file of the AO to the limited extent as stated in the revision order for making a fresh inquiry and deciding the same afresh. Against the said order and directions passed by the ld Pr. CIT, the assessee is in appeal before us. 3. During the course of hearing, the ld. AR submitted that it is a case of change of opinion in as much as the Assessing Officer has already applied his mind and formed an opinion. It was submitted that the assessment was completed u/s 143(3) after making various enquiries and detailed investigation, the AO raised detailed queries arising from the discussion through query letter dated 02.08.2017 and in response, the assessee also filed submission dated 22.08.2017. It was submitted that the AO had evidently made reasonably detailed enquiries and collected relevant information. Thus, it is a case of change of opinion in as much as the AO after making due investigation and application of mind completed the assessment and now the ld. Pr. CIT has substituted the AO's opinion which is not permissible within scope of section 263. In support, the reliance was placed on the Hon'b....
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....ulating allowable remuneration to partners u/s 40(b), it was submitted that the assessee during the revisionary proceeding has stated that the said FDRs were given as guarantee to Sony India Pvt. Ltd and Canon Ltd. who are supplier of printers and thus the interest on FDRs being business income should be included for calculating allowable remuneration u/s 40(b) of the Act. This fact is evident from an agreement entered between the assessee and M/s Canon India Private Ltd and M/s Sony India Pvt. Ltd. It was submitted that the ld. Pr. CIT has wrongly stated that no evidence was furnished. In support, the reliance was placed on the Co-ordinate Bench decision in case of M/s S.P. Equipment & Services CIT (2010) 33 DTR 265 (JP). It was submitted that the assessee firm was required to submit performance bank guarantee to Cannon and Sony and it could not have proceeded further to take dealership of the company to sell its products in absence of the same. This way, it was an operational and compelling necessity on the part of the assessee to get the FDRs prepared and pledged with the concerned banks. In support, the reliance was placed on the Co-ordinate Bench decision in case of ITO vs. Ma....
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.... kitchen store room, lounge etc, the AO failed to enquire into each of such places i.e. rooms etc. to see the use thereof and therefore, it is clear that an erroneous and prejudicial order has been passed by the Assessing Officer on account of lack of enquiry. Further, the assessee has furnished fee receipt issued by the Sub-Registrar along with sale deed however, on going through the same, the evaluated value taken by the Sub-Registrar is again not clearly shown therein. 9. Regarding claim of depreciation on scooter, it was submitted that the same is in the name of partner of the assessee firm, and the firm had no right over it and accordingly, depreciation cannot be allowed to the assessee firm. Further, the decision in case of Mysore Minerals vs. CIT 239 ITR 775 (1999) is distinguishable of facts and does not support the case of the assessee. 10. Regarding placing of FDRs and considering the interest on said FDRs for the purpose of computation of partner's remuneration u/s 40(b), it was submitted that the assessee has merely raised its contentions that said FDRs were placed for business purposes. However, it has not furnished any documentary evidence to substantiate its claim.....
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....has been shown as Residential in the sale deed, but you made inadmissible claim of depreciation of Rs. 2,34,630/-. However, the AO failed to conduct enquiry with reference to inadmissible depreciation on Residence thereby making the assessment order erroneous in so far as prejudicial to the interest of revenue. On examination of fee receipt issued by the Sub-Registrar, it is noticed that the evaluated value taken by the Sub-Registrar is not clearly shown therein. Moreover, the evaluated value as taken by the Sub-Registrar appears to be different from the value so adopted by you for registration purpose. However, AO failed to conduct any enquiry thereinto. 3. On examination of details of fixed assets available on assessment record, it is noticed that the scooter of Rs. 48,455/- was purchased from M/s Raj Motors on 06.06.2014 in the name of Shri Ashish Deedwania and not in the name of assessee firm. But the AO failed to enquire into the admissibility of depreciation thereon. 4. As per partnership deed, the remuneration of Rs. 40,48,607/- was allowed to partners on book profit of Rs. 65,97,679/-. This book profit included interest on FDR of Rs. 3,36,620/- which is not the inc....
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....an and internal construction shows that it was a residential property and not a commercial property and the photographs so submitted by the assessee during the revisionary proceedings doesn't support the claim of the assessee that the property has been used for business purposes. We are therefore of the view that had the AO carried out even preliminary verification and examined the contents of the registry, the AO would have noted the similar description of the property which is clearly discernable from the reading of the contents of the Registry and would have raised similar questions regarding conversion and more importantly, the usage of such property for business purposes in order to examine the assessee's eligibility to claim depreciation. However, we don't find any such basic enquiries and investigation being carried out by the AO. We therefore find that it is case of complete lack of enquiry on part of the AO to examine the description of the property and also whether the same is used for business purposes in order to examine the eligibility of the assessee to claim depreciation where one of the cardinal rule is the property should be used for purposes of business. A referen....
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....d by the assessee company. It is not a question of kind and extent of enquiry and hence, a difference of approach and methodology of examination of a particular transaction as done by the AO and as suggested by the ld Pr CIT. No doubt every Assessing officer has his unique style of functioning and no hard and fast rule can be laid down as to how he should conduct the enquiry in discharge of his statutory functions. However, where the factual scenario of a case prima facie shows the description of property as residential and cry for looking deep into it in terms of acual usage for the purposes of business, then a mere collection of registry document and keeping that on record cannot be held as conducting an enquiry. In our considered view, it is a clear case of lack of enquiry on part of the Assessing officer and the order thus passed is clearly erroneous and prejudicial to the interest of the Revenue. Therefore, the finding of the ld Pr CIT that the order so passed by the AO is erroneous in so far as prejudicial to the interest of Revenue is upheld. 16. In respect of claim of depreciation on scooter, we find that it is again a case of lack of enquiry on part of the Assessing offic....