TaxTMI 
TaxTMI 
2021 (6) TMI 751
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....id not enjoy jurisdiction u/s. 263 of the Act to interdict the order passed by the AO dated 24.12.2018 and, therefore, he pleads that the order of the Ld. PCIT may be quashed. 3. Brief facts of the case is that the Ld. PCIT noted that in this case for AY 2011-12 the AO had reopened the assessment u/s. 147/143(3) of the Act and has passed the reassessment order on 24.12.2018. According to Ld. PCIT the premise on which the case of assessee was reopened was in respect of escapement of income to the tune of Rs. 2,75,40,000/- through accommodation entry provided by Akash Agarwal group in the garb of bogus billing. However, according to the Ld. PCIT, the AO completed the reassessment by taking a different approach and recomputed assessee's income by invoking the provision of section 44AD of the Act. Further, according to the Ld. PCIT, the gross contract receipt of the assessee from M/s. Usha Martin Group exceeded Rs. 60 lacs during the relevant previous year 2010-11, therefore, section 44AD of the Act was not applicable. In the aforesaid circumstances, according to the Ld. PCIT there was underassessment of the income to the tune of Rs. 2,37,44,120/- (Rs. 2,75,40,000/- - Rs. 37,95,880/-)....
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....e, and the fact that assessee had executed the work, presumed that the billing of M/s. Simplex might have been made by the assessee to inflate the expenses. So, in order to guard the leakage of revenue, he applied 8% as per provision of sec. 44AD of the Act to determine the profit in relation to contract work of M/s. Usha Martin Ltd in the project for which the assessee claimed the expenditure in question. Therefore, the assessee prayed before the Ld PCIT that the AO's order is not erroneous as well as prejudicial to the interest of the revenue. However, the Ld. PCIT did not agree. According to him, the income of Rs. 2,75,40,000/- has escaped assessment through accommodation entry provided by Akash Agarwal group in the garb of bogus billing and since the contract receipt by assessee from M/s. Usha Martin Ltd. exceeded Rs. 60 lakhs, therefore, section 44AD of the Act was not applicable. According to him, the entire bogus sub contractual payments to the paper entity should have been added to the income of the assessee and therefore, he was pleased to hold that the assessment order dated 24.12.2018 as erroneous in so far as it is prejudicial to the interest of the revenue. Therefore, ....
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.... Vijaya II Iron Ore Mine Barajamda, Jharkhand 11 Km 20,00,000 2,20,00,000 UshaMartin Ltd. JSR/USAD/UM/2010-33803 Levelling and grading using mechanized machinery along with tools, tackles & labour for site at Oxygen Plant, Jharkhand 77,000 (CUM) 150 1,15,50,000 Usha Martin ltd. JSR/USAD/UM/2010-33802 Formation of village road on either side of railway track for shifting of level crossing along with materials, tools, tackes and labour for site at Gamharia Station yard Jharkhand 1,76,000 (CUM) 110 1,93,60,000 Total 5,29,10,000 This job was outsourced to M/s. Simplex Infra project Pvt. Ltd. It is aware about the full credentials of M/s. simplex Infra Project Pvt. Ltd. but the work was carried out in remote areas where it did not have any regular network of contractors or readily available infrastructure. It had to rely on recommendations of local project incharge and other contractors associated with the nearby projects. In support the assessee had submitted full profile of its company and some photographs related to work carried out on behalf of M/s. Usha Martin Ltd. 4. Conclusion; The assessee submission was analyz....
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....evisional 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 jurisdiction u/s 263 of the Act by the CIT. The twin conditions are that the order of the Assessing Officer must be erroneous and so far as prejudicial to the interest of the Revenue. In the following circumstances, the order of the AO can be held to be erroneous order, that is (i) if the Assessing Officer's order was passed on incorrect assumption of fact; or (ii) incorrect application of law; or (iii)Assessing Officer's order is in violation of the principle of natural justice; or (iv) if the order is passed by the Assessing Officer without application of mind; (v) if the AO has not investigated the issue before him;[ because AO has to discharge dual role of an investigator as well as that of an adjudicator ]then in a....
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....rovided accommodation entry in the form of bogus billings for contractual receipt and sub-contractual payment through their jama kharchi companies to several beneficiaries. It has been found that the assessee company M/s. prism Logistics (P) Ltd. had availed accommodation entry for bogus billing in form of sub-contractual payments to M/s. Simplex Infra Project during the FY 2010-11 to the tune of Rs. 2,75,40,000/-." 9. Thus it is noted that AO had reopened the assessment based on information from the DCIT, CC-1(4), Kolkata that a survey conducted on Akash Agarwal Group on 10.02.2015 by the Investigation Wing revealed that they were invoked in providing bogus accommodation entry through their jama kharchi companies to their beneficiaries. And it was found that assessee had availed accommodation entry from M/s. Simplex Infra Project in the form of bogus billing as sub-contractual payment to the tune of Rs. 2,75,40,000/-. 10. Based on the aforesaid information, the AO reopened the assessment and after calling for relevant details/material/evidences (supra) has concluded by making a finding of fact that assessee had carried out actual contractual work by observing that "there is no d....