TaxTMI 
TaxTMI 
2021 (3) TMI 73
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....assumed powers u/s. 263 for revising the order of the Assessing Officer and issued notice to the assessee specifically pointing the errors noted by him vis-à-vis. the above claims of the assessee of Long Term Capital Gains and brought forward business losses. The notice is reproduced at pages 2 to 5 of the order of the PCIT. In response to the same, the assessee contended that the Assessing Officer had examined the issues during the assessment proceedings and the assessee had filed the details and evidences with regard to the same and that the Assessing Officer having been satisfied with the same, had therefore accepted the claim of the assessee. The assessee further replied to each and every specific discrepancy/error pointed out by the Ld. PCIT and contended, therefore, that there was no error in the order of the Assessing Officer. The Ld. PCIT rejected the contention of the assessee and held that the Assessing Officer had accepted the assessee's claim without making any verification with respect to the various expenses claimed against the capital gains and against its business income and since the same needed verification, the order passed by the Assessing Officer ....
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....om, kitchen etc. was accepted at its face value as the property sold happens to be the 'Vacant Open Land'. The assessee in 'Fixed Assets' Schedule has also shown the given property as 'Land'. The A.O., however, blindly allowed the deduction of the given expenditure of Rs. 13.90 lacs from the Capital gain without any application of mind, and without conducting any enquiries. ii) Further, there are 2 bills of commission, one from Rajeev Insulation Products of Rs. 8 Lacs and another of Rs. 5.90 Lacs. The latter one is an unsigned bill. The name of the so-called commission agent has been smudged at the top of the bill. Despite the effort to smudge the name, if is evident that the said bill has also been procured from the same "Mayank Gupta", from whom the bill of repair expenses mentioned above was procured. The A.O. did not care to conduct any enquiry about the genuineness of the assessee's claim of the given expenses. The A.O. just didn't try to find out as to how Mayank Gupta had issued bill for Commission Expenses, as well as for repair of Building, and that too for a vacant land. The smudging of the name at the top of the bill seem....
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.... Sagar Steel Traders at Rs. 67,930/-. It is noted that the factory at Shahbad is lying closed. Therefore, the reason behind undertaking repair of a closed factory needed to be enquired. Even for arguments' sake, it is accepted that repair was undertaken, if is not understandable as to how only one bill of steel could complete the repair process. c) Survey Expenses have been claimed at Rs. 60,000/-. No query was raised by the A.O. to examine the nature and business relevance of the said expenses. Only internal vouchers of the company are available on record, it is not at all clear as to how the said expenses are incidental to the business and how the A.O. satisfied himself regarding the genuineness of the claim. d) Heavy Professional & Legal charges have been debited in the P & L account to the tune of Rs. 56,02,852/-. If is noted that the said expenses are disproportionately higher than the preceding year. If is noted that only general submissions were made in this regard by the assessee. The A.O. did not care to ask the assessee to co-relate the expenses to the exact legal and professional services procured case-wise, and to ascertain the genuineness of the s....
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....from capital Gains. Mayank Gupta 13,90,000 Repair and misc work bill. Bill attached as per page no....to Assesse acquired the peace if land on 1939. Initially, the vacant land was given on lease to a tenant who from his own cost carried out the construction and constructed building and boundary wall etc. and when he vacated the premises, assessee incurred some repair cost as required by the buyer. Since the expenses were incurred in connection and in order to complete sale of property. It was claimed and allowable as expenditure. In the show cause notice, there appears some typing error in mentioning Rs. 8,00,000/- as Rs. 8,80,000/- and accordingly total wrongly mentioned as 28,60,000/- where as correct amount is Rs. 27,80,000/- 2. Repair and maintenance expenses amounting to Rs. 10,33,079/-.: In the show cause notice, there appears some typing error in mentioning Rs. 10,35,079/- instead of correct figure Rs. 10,33,079/-. Details of repair and maintenance expenses were submitted before Learned AO (refer Page no ..... to .....). Details re produced herein below:- Financial Grouping Tally Grouping Debit Repair & Maintenanc....
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...., Automotive Industry'-like Maruti Udyog, Cooling towers manufacturers and Chemical equipments made of Fibers Glass Reinforcement manufactures and ii. Import of Hard PVC foam. Balsa wood for Indian Railways, Aerospace Wind energy sector and ship buildings. b. Above items are specialized products and not easily available in Indian markets-even though some are available but are of inferior quality and not acceptable to the manufactures of equipment's in government sector I organized sector. Some of the import customers are Indian Railways Coach building factory RCF-Kapurthala, National Aerospace, NSTL Vishakhapatnam, Hindustan Aeronautics Ltd. Etc. and in corporate sector like Suzlon, Sterling group Enercon India, Paharpur Cooling Tower etc. c. These customers float Global tender enquiry for the specialized items required and we on behalf of our principal company in Switzerland I USA and China submit the price and technical bid. All work connected to the technical approval, price negotiation and fill the finalization of the order is looked after by our team of sales, marketing and technical person who have been trained in USA Factory of our foreign ....
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....uch name. Please provide further details if this pertains to assessee company. We would be glad to submit the details after hearing from your goodself. 7. Travelling expenses of staff and foreign travelling expenses directors: the assessee has incurred Travelling expenses amounting to Rs. 19,61,571/-. In comparison to Rs. 23,22,948/- in previous year. The assessee is line of business requires extensive travelling. The principal of assessee is a swiss based company. Assessee is working under trade name "Composite Polymers & Specialties Company, a Unit of Indian Sulphacid Industries Limited. The assessee travels frequently to attend workshops, launches of the products. The assessee has submitted complete details of travelling expenses alongwith bills and vouchers. Intact for foreign travelling copy of Invitation/email trails were also asked by learned AO and produced by the assessee. (Copies attached .......................) From the above it can be slated that assessee has incurred travel conveyances expenses and thus correctly allowed by learned AO. Under the above circumstances, your good self will appreciate that learned AO has carried out comp....
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.... The assessee has challenged the invoking of the provisions of Section 263 on the grounds that the Assessing Officer had made proper and adequate enquiries and examination as required in the facts of the case and thereafter allowed the claims of the assessee. The assessment order is stated to be not erroneous on this ground. It is further stated mat merely a different view from that of the Assessing Officer by itself could not have been a ground for exercising jurisdiction u/s. 263. If was also submitted that an order can be interfered with under the revisionary provisions not only when the order is held erroneous but it also has to be prejudicial to the interest of Revenue. Several case laws have been relied upon. In the present case, the Assessing Officer completed the assessment without any application of mind and without conducting any worthwhile enquiries as is evident from the reasons spent out in the show cause letter for initiating the revisionary proceedings u/s. 263 of the Act. The AO blindly accepted assessee's claims without any independent verification as will be evident from the ensuing discussions. There were no subsequent events that were not available ....
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....AO. 9. The purchase of book and salary paid to heritage security and intelligence services have to be verified with respect to the claim of the assessee. 10. In view of the above, it is clear that the AO has passed the order dated 06.12.2017 in an extremely careless, casual and perfunctory manner without caring to go though the details of the case and conducting any worthwhile enquiries on critical issues. The AO failed to exercise due diligence in respect of each and every issue involved in the assessee's case, and has passed a summary assessment order after simply obtaining a few documents from the assessee and placing them on record. The order passed by the A.O. is, therefore, held to be erroneous in so far as it is prejudicial to the interest of Revenue. The same is accordingly set-aside with the directions to the A.O. to make the assessment afresh after inter alia considering all the facts/issues discussed above. The A.O. is also directed to allow reasonable opportunity of being heard to the assessee before passing the assessment order in this case." 10. As is evident from a bare perusal of para 5-9 above the Ld. Pr.CIT has dealt with each issue flagge....