TaxTMI 
TaxTMI 
2022 (7) TMI 1082
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....ts entirety; the impunged order under section 263 is bad in law in as much as the assessment order of the Assessing Officer is neither erroneous nor prejudicial to the interest of the Revenue. The appellant further contends that on the facts and in the circumstances of the case and in law, the Pr. CIT ought not to have reached the aforesaid conclusion in as much as the Assessing Officer, after being satisfied on the basis of documentary evidences filed, framed the order dated 20.12.2018 making an adhoc disallowance of office expenses Rs. 50,000. The appellant further, contend that the observation of the Pr. CIT that "As directed in preceding paragraphs of this order, the AO based on outcome of the his examinations and enquiries on various issues make the additions to the total income of the assessee wherever required per law by modifying the assessment order" is bad in law and needs to be expunged." 2. The appellant company filed return of income on 29.9.2016 declaring total income of Rs. 23,78,172/-. The case was selected for complete scrutiny on certain parameters, and the case the assessment u/s 143(3) was completed on 20.12.2018 assessing the income at Rs. 24,28,170/-. ....
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....rved that the total turnover was Rs. 83.63 crores against which purchases were 69.88 crores and opening stock was Rs. 13.65 crores which raised doubts about the sundry creditors which was Rs. 218.30 crores. The PCIT observed that in the submissions made by the appellant before him, it was contended that during assessment details of all sundry creditors along with their names and addresses and confirmation was submitted, which was examined by AO. As per the assessee in the list of sundry creditors there were some business advances also which were grouped under sundry creditors, but were unsecured loans and inadvertently grouped in sundry creditors. The assessee submitted that the amount Rs. 35.09 crores of Glory Export was loan and was wrongly shown as creditors. The PCIT was however, not satisfied with the reply of the assessee, and observed that after submissions of the appellant the AO has not made any further query and merely accepted the details of the assessee. the loan of Glory Exports was also not shown as loans in the financial statements. In relation to the foreign creditors the AO could have referred the matter to FT and TR which he has failed to do and therefore the orde....
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....and is not based upon the income of the appellant. In relation to the outward remittances to non resident and foreign companies, it was mainly for purchase of diamonds imported from foreign countries mainly Belgium, Russia, Dubai, Hongkong, Israil etc. For the Imports of goods assessee had to made the payments which caused outward remittance. All the purchases/imports made by the assessee company are duly certified by the custom department thereafter only the payments are made. It was submitted that the assessee was not liable to furnish Form 15CA to the bank as per press release of CBDT and rule 37BB, he had however also furnished the same to ease his business transaction. 10. As regards sundry creditors, the appellant submitted the complete list of creditors with complete details was submitted during the assessment proceedings. Confirmations of most of the creditors except the foreign creditors were submitted during the assessment proceedings. However, the list of Sundry Creditors also included some accounts which were of the nature of loans, which will have no impact so far as the assessment of income is concerned. The classification of the same to Unsecured Loans will rather r....
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....the commission expenses claimed had not been examined. It is stated that the commission expenses had been claimed at Rs. 26,91,041/- which has not been enquired into. No rent has been claimed for Mumbai and Surat or Beawar office, however certain expenses had been claimed at Surat and Mumbai. In relation to the payment of commission expenses the contention of the appellant is that the details of the same was furnished to the AO, which is also there in the paper book submitted by the department at pages 38 to 88 containing all supporting vouchers and bills. Further copy of their voucher receipts together with their return acknowledgement was also submitted to the ld. AO, TDS was also made u/s. 194H on all the payments made. As regards the registered office of the assessee company it was stated that the office at Beawar was at director Mr Mahendra Chhajer's residence, and Surat Office was at property of the director Mr. Manoj Chopra for which no rent was paid. 13. In relation to the payment for assortment charges, it was also contended that the diamonds were assorted in Mumbai only. In Surat Goods were sold and purchased there either finished or rough. However goods were transferred....
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....ous or prejudicial to the interest of revenue to invoke section 263 and requested to quash the order. 17. During the course of hearing, the ld. DR strongly relied on the orders of the authorities below. 18. We have heard both the parties and perused the materials available on record. As regards the first issue raised by the PCIT with regard to reference to TPO, we find from the order u/s 263 of the PCIT at page 6 in para 4 of his order in which he has observed as under : 4. In response the assessee has filed submissions dated 11.2.2021 though e filing portal in respect of the issues as discussed in the proceedings paragraphs of this order. It is stated by the assessee that it has neither dealt in any international transactions as specified u/s 92 and 92B nor it has dealt in specified domestic transactions u/s 92BA requiring its reporting by the Chartered Accountant in Form 3CEB u/s 92E r.w. Rule 10E. As per the assessee that it and the persons/ concerns with whom it had dealt (purchases/ sale of goods including import purchases) are neither associated enterprises nor prior agreement in relation to such transactions. It is pleaded by the assessee that when the purchases and othe....
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....creditors. The AO during the course of assessment proceedings had also issued notices u/s 133(6) to some of the creditors on random basis, and was satisfied by the same and no adverse inference was drawn. It cannot be said that proper enquiry was not made in relation to the same. The complete address of the creditors and their PAN details were also submitted during the assessment proceedings. In the order u/s 263, nothing adverse has been pointed out in relation to any of the creditors or any irregularities in the account. Simply on the basis of suspicion the order cannot be said to be erroneous when proper enquiry was duly made. The Hon'ble Supreme Court also in the case of CIT vs. Kwality Steel Suppliersd Complex (2017) 297 CTR (SC) 553 have held that the CIT while sitting in the revisionary jurisdiction is not sitting in appeal, judging the view taken by the AO. It the view taken by the AO after verification is a plausible and permissible view, the CIT cannot exercise the powers under s. 263. Even from the impunged order it is seen that various past assessments had been also made under scrutiny and some of the creditors which are regular creditors, nothing adverse had been state....