TaxTMI 
TaxTMI 
TaxTMI 
2021 (10) TMI 1056
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....missioner of Income Tax had issued a show cause notice to the assessee and the reasons enshrined therein, also finds place in the order of Ld. Pr. Commissioner of Income Tax wherein he enumerated the reasons for assuming revisionary jurisdiction u/s.263 of the Act. The assessee has furnished detailed written submissions before the Ld. Pr. Commissioner of Income Tax in response to the show cause notice and after considering the submissions of the assessee at Para 4, it was observed by the Ld. Pr. Commissioner of Income Tax that one of the reasons for selecting of the case is "low net profit or loss shown from large gross receipts". 4. From perusal of the all the notices issued by the Assessing Officer, it was observed that the Assessing Officer did not ask even a single question on this issue. The assessee vide submission dated 17.03.2021 had submitted that the main reason for reduction of net profit is due to increase in foreign exchange loss. On perusal of records, it was seen that there is exponential increase in foreign exchange loss from Rs. 82,23,143/- to Rs. 82,83,74,234/- i.e. Rs. 82,01,51,091/-. The Assessing Officer has not examined the reasons for the same. Further, it w....
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....essing Officer and the assessee has provided detailed explanations in respect of foreign exchange loss in the relevant assessment year. Therefore the contention of the Department that the Assessing Officer has failed to conduct any enquiry or verification on this aspect is not a correct statement of fact. 8. The Ld. DR also could not refute the fact that all these explanations and documents were filed before the Assessing Officer while completing the assessment proceeding. The Ld. DR could not bring on record any material or evidences to show that there was no enquiry or verification on this aspect by the Assessing Officer. 9. The Ld. Counsel further submitted that even at Para 4.1, the contention of the Ld. Pr. Commissioner of Income Tax has already been met with since it is in connection with Para 4 of his order. However, on the remaining part of the order of the Ld. Pr. Commissioner of Income Tax at Para 4.1 that there might be certain domestic transactions of the company which may had impact on the decline of net profit drastically compared to assessment year 2013-14, the Ld. Counsel contended that the Ld. Pr. Commissioner of Income Tax is only anticipating without any specif....
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....ceedings before the Assessing Officer, they had furnished a letter dated 08.09.2017 wherein they had explained all these issues before the Assessing Officer. Furthermore, it was brought to our notice that so far as sub-contracting charges paid to Gestamp Global Tooling figure was not Rs. 3.447 crores but was Rs. 1.02 crores. 12. In so far as Rs. 0.847 crores paid to Viraj Enterprises for contractual labour supply for production etc. is concerned, the Ld. Pr. Commissioner of Income Tax summarily mentioned that the amount was paid to this extent. He has not stated as to why this amount was not to be allowed by the Assessing Officer. Simply because certain amount has been paid to labour contractor cannot, in itself, render the assessment order erroneous so as to be prejudicial to the interest of the revenue. 12.1 As regards the payment of Rs. 3.447 Crores paid to Gestamp Global Tooling for technical assistance for tools and die setting etc., it is seen that the assessee, in fact, paid Rs. 1.027 crores and not Rs. 3.447 crores as alleged by the Ld. Pr. Commissioner of Income Tax. The version of the assessee is fortified from Form 3CEB wherein payment of Rs. 1.027 crores has been show....
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....the shortcomings in the assessment order as alleged by the Ld. Pr. Commissioner of Income Tax vide Paras 4, 4.1 and 4.2 of his order, that the assessee had demonstrated each and every aspect of such queries raised before the Assessing Officer. The Ld. DR also could not refute the fact that necessary documents were placed before the Assessing Officer and he also could not bring on record any material/evidence to show that the Assessing Officer has not conducted any enquiry. Rather, we have observed that questions were asked and in response thereto, the assessee had given reply to each and every queries raised by the Department. 14. It is a settled position of law while assuming jurisdiction u/s.263 of the Act, the Ld. Pr. Commissioner of Income Tax should specifically state the reasons why the order of the Assessing Officer was erroneous in so far as prejudicial to the interest of the revenue by supporting factual evidences and reasoning which in this case is absent. We take guidance from the decision of the Hon"ble Andhra Pradesh High Court in the case of Spectra Shares & Scrips (P) Ltd Vs. Commissioner of Income Tax (supra.) wherein it was held by the Hon"ble High Court that "the....
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....ng inquiries or verification which should have been made. On facts, it is established that the AO did make preliminary inquiry at the first instance by seeking relevant explanation and then after verification, carried out a detailed enquiry on the aspect, which was elaborately replied by the assessee. Thus, the case cannot fall under clause (a). 16. Clause (b) is triggered where the order is passed allowing any relief without inquiring into the claim. Here again, we find that the prescription of this clause is not satisfied. Though the order was passed allowing relief but it was not 'without inquiring into the claim'. The inquiry was duly conducted and the reply of the assessee was sought which was also given and then examined. 17. Clause (c) is magnetized where the order has not been made in accordance with an order of direction or instruction issued by the Board u/s.119. The ld. CIT has not referred to violation by the AO of any order, direction or instruction issued by the CBDT. 18. Clause (d) is attracted when the order passed by the AO is not in accordance with any decision rendered by the jurisdictional High Court or the Supreme Court in the case of the assessee....