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TaxTMI 
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TaxTMI 
2022 (10) TMI 21
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....17-18. 2. The only interconnected issue raised by the assessee is that the learned Principal CIT erred in holding the assessment framed under section 143(3) of the Act as erroneous insofar prejudicial to the interest of Revenue under the provisions of section 263 of the Act. 3. The brief facts are that the assessee is a partnership firm and filed its return of income declaring income of Rs. 2,66,56,280.00 which was accepted in the assessment framed under section 143(3) of the Act vide order dated 07 December 2019. However, the Ld. PCIT, having examined the case records of the assessee observed certain infirmities in the assessment order as detailed below: i. The assessee on one hand was paying interest on the loan borrowed by it and on ....
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.... observed by the learned PCIT was based on wrong assumption of facts. As such the current year data of the ITS, custom, CBEC can only be compared with the data of the relevant years of the assessee to point out the infirmities. However, the assessee filed a reconciliation statement before the learned PCIT to justify that there is no difference in the amount of import purchases, payment of custom duty with the date of the ITS/custom/CBEC. 5.1. The assessee further submitted that it has not only imported the raw materials but also the fixed assets and spare parts of the fixed assets which were subject to the payment of the customs duties. The details with respect to the import purchases of raw material, fixed assets and spare parts of the fi....
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....rtaining to the relevant assessment year is incorrect as evident from the fact that if the same was not pertaining to the year under consideration then how the assessee has prepared the reconciliation of the data and arrived at the conclusion that there was no difference. It means the data provided by this office was correct and pertaining to the year under consideration. Further the reconciliation submitted is unverifiable for want of complete details and documents in support. Therefore the same would have to be done by the AO in the subsequent proceedings as per the directions in the subsequent paras of this order. Thus the AO has failed to examine the huge difference of the invoice value and assessable value in the books of account vis-a....
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....ed on pages 22 to 30 as well as the reply made by the assessee in response to such notice dated 27th of November 2019 which is placed on pages 31 to 36 of the paper book. 8.1. The learned AR further contended that the assessee has furnished the copies of purchase/import purchase account, import expenses and custom duty expenses along with the details of suppliers for the period under consideration which is placed on pages 37 to 56 of the paper book. 8.2. The learned AR also submitted that the copies of fixed assets accounts for the period under consideration were also furnished which are placed on pages 57 to 73 of the paper book. 9. On the other hand, the learned DR vehemently supported the order of the authorities below. 10. We have h....
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....ly the partnership firm does not have any interest free fund with it. Therefore, it appears to us that the assessee cannot be given the benefit that it (the assessee) has given advances out of its own interest free funds and reserves. Thus to our understanding, this aspect as pointed out by the learned PCIT was supposed to be verified by the AO during the assessment proceedings. But the same has not been done by the AO, accordingly we do not find any infirmity in the observation of the learned PCIT. 10.2. With respect to the 2nd allegation that there were differences in the import purchases, payment of custom duty and ITS data/CBES, in this regard we find that the AO during the assessment proceedings has carried out requisite verification ....
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....roverted by the learned PCIT. From the finding of the Ld. PCIT, reproduced above, we find that there was no tangible material referred by the PCIT highlighting the differences between the value of purchases and the custom duty as discussed above. Based on this we hold that the learned PCIT has assumed the jurisdiction on this issue on wrong assumption of facts. Thus on this count, the assessment order framed under section 143(3) of the Act cannot be categorized as erroneous insofar prejudicial to the interest of revenue. 10.4. With respect to the 3rd allegation that there was no verification of the contribution made by the assessee towards the Provident fund, in this regard we have referred the paper book filed by the assessee and find tha....