TaxTMI 
TaxTMI 
2021 (4) TMI 457
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....n P&L A/c and the same was allowed under scrutiny assessment whereas it was not allowable as deduction as the assessee maintained Book of Accounts on Cash System, i.e income were booked on receipt basis, hence there was no question arises of Bad Debts. Bad Debts is allowable where the income were booked on accrual basis, i.e Mercantile System. (b) You have debited a sum of Rs. 6,91,000/- on account of mis. Software Up-gradation charges in P&L A/c and the same was allowed under scrutiny assessment whereas it was not allowable as the expenses on Software Up-gradation Charges was in nature of Capital Expenditure being of Software is fallen under the category in capital assets and was to be allowed depreciation @60% i.e Rs. 4,14,600/-. (c) The disallowed 10% expenses related to conveyance & Petrol and Depreciation on Vehicle for personal use in Para 7 & 8 of assessment order. Accordingly, 10% of the expenses (i) Interest on Auto Loan Rs. 2,33,745/- (ii) Vehicle Maintenance Expenses Rs. 2,26,826/- was to be added back to the total income as these expenses were correlated to the expenses on which the Assessing Officer made addition, so the Addition of Rs. 46,057/- was t....
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.... visit purposes by associates, counsels and other officials; for routine work of the court proceedings, for court/forum visits i.e District Courts, District Magistrate, Consumer Forums, State Commission, Debt Recovery Tribunals, High Court etc., visiting government bodies, for Police Stations visits, to visit client's offices/branches and for other visits pertaining to Profession/Business purposes. Further, as per the assessment order dated 29.12.2017 (Para No. 7 & 8) Assessing officer passed the order of the disallowance of the 10% expenses of depreciation of the Jaguar Vehicle. In this regard, the vehicle was purchased on 15.03.2015 and the amount of interest on Loan is not charged from the Profit and Loss account for the A. Y 2015- 16. Further, it is also pertinent to note that the fuel for jaguar vehicle to the tune of Rs. 5,000/- was purchased during that period." 5. It was further submitted that a bare reading of section 263 of the Act makes it clear that the prerequisite for the exercise of jurisdiction by the Commissioner is that the order of the Income Tax Officer is erroneous is so far as it is prejudicial to the interests of the Revenue. The Commissioner ....
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....ct view of the entire material available before him and after due application of mind on law and on facts had reached to a reasonable satisfaction of concluding the assessment. Thus the order of Ld. AO is not erroneous on any count nor prejudicial to the interest of Revenue. Thus, the order of Ld. AO cannot at all be held as erroneous and thus the action of Ld. PCIT Alwar in passing the impugned order concluding that the said order is erroneous and prejudicial to the revenue is bad in law. It is further submitted that the Hon'ble Bombay High Court in the case of CIT Vs. Gabrial India Ltd., reported in 203 ITR 108, has held that, "CIT cannot revise order merely because he disagrees with the conclusion arrived at by the ITO". Further, in the case of CIT Vs. Sunbeam Auto Ltd., reported in 227 CTR 133, the Hon'ble Delhi High Court drew a distinction between "Lack of inquiry" and "inadequate enquiry" and held that in the case of inadequate enquiry, provisions under section 263 cannot be invoked. (B) The Order of Ld. AO is not prejudicial to the interest of Revenue: The action of the Ld. AO was not at all prejudicial to the interest of revenue. After making all the necessa....
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....proper inquiries about the various issues so raised in the show cause notice and in absence of proper inquiries/investigation and non-application of mind, the assessment order has been held to be erroneous as well as prejudicial to the interests of the Revenue. Further, our reference was drawn to the findings of the ld. Pr. CIT which reads as under:- "In view of above facts and judicial pronouncement, the order u/s 143(3) of I.T. Act dated 29.12.2017 passed by the Assessing Officer is deemed to be erroneous so far as it is prejudicial to the interest of Revenue, as I am of the opinion that the order passed is based on mistaken view of law/erroneous application of provisions of the Act. During the revision proceedings u/s 263 of the Act, it is found that assessee has wrongly claimed bad debts, debited his P & L a/c for software upgradation, which is a capital expenditure but the same is allowed by the AO. Further it is also seen that AO disallowed 10% expenses related to conveyance and petrol & depreciation on vehicle for personal uses, but fail to disallowed the amount on Interest on auto loan and vehicle maintenance. Therefore, the same amount was required to be added ....