2022 (11) TMI 942

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....as debited purchases of Rs.52,33,65,669/- to the P&L account, whereas the purchases as per the VAT returns is at Rs.51,80,57,530/-. He further noted from Form 26AS that during the impugned assessment year the assessee firm received interest of Rs.43,320/-, but it has accounted for the same at Rs.39,311/- in the P&L account. He observed that the AO during the assessment proceedings has not verified these issues and completed the assessment without causing any enquiries regarding these apparent mistakes. Since the AO has completed the assessment without proper verification and application of mind, he was of the considered opinion that the order passed by the AO is erroneous and prejudicial to the interest of the revenue. He, therefore, issued a show cause notice to the assessee asking him to explain as to why the order passed by the AO should not be revised u/s. 263 of the I.T.Act, 1961. 4. The assessee relying on various decisions submitted that since the AO has verified all the information and taken one of the possible views, therefore, merely because the ld.PCIT does not agree with the view taken by the AO cannot be a ground from revision u/s. 263. 4.1 However, the ld.PCIT was n....

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....in passing the revisionary order by taking a different stand on an issue from that of a stand taken by AO in the course of original assessment. 6.The Ld. Pr. CIT has erred in adding the interest of Rs. 4009/- to the income without considering the explanations as clarification on the issue. 7.The Ld. Pr. CIT ought to have appreciated the fact that the assessee has submitted all the details in respect of the alleged difference of Rs.3,50,000/- in purchases as per P&L account and VAT returns. 8.The Ld. Pr. CIT ought to have appreciated the fact that the difference in purchases as per P&L account and as per VAT return is because of the fact that VAT return did not contain the details of exempted goods. 9. The Ld. Pr. CIT ought to have properly appreciated the factual position that all the purchases have been accounted in the P&L account. 10. 'The Ld. Pr.CIT ought to have appreciated the fact that the difference in the amount of purchases as per P&L account and as per VAT returns has arisen on account of exempt purchases and Form H has been submitted in support of the above exempted purchases. 11. The Ld. Pro CIT ought to have well appreciated that the issue was already ....

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....ome as per Form 26AS and the P&L account is concerned, he submitted that difference, if any, will be accounted for in subsequent year and the amount being very negligible, the ld.PCIT should not have invoked jurisdiction u/s. 263 of the I.T.Act. 9. Referring to the following decisions, he submitted that revisionary order u/s. 263 is not valid, where the order is neither erroneous nor prejudicial to the interest of the revenue. i. Malabar Industrial Co.Ltd. vs. CIT reported in 109 taxman 66 (SC) ii. Pricewaterhouse Coopers LLP USA vs CIT reported in 91 taxmann.com 444(ITAT.Kol) iii. Spectra Shares &Scrips(P) Ltd. vs CIT reported in 36 taxmann.com 348(ITAT.Hyd) iv. Sanspareils Greenlands(P.) Ltd. vs CIT reported in 99 taxmann.com 222 ((ITAT Delhi) v. CIT vs. Mehrotra Brothers reported in 270 ITR 157 (MP.HC) vi. Srinivasa Hatcheries(P) Ltd. reported in [200] 81 ITR 36(Hyd) (ITAT.Hyd) vii. Development Credit Bank Ltd. reported in [2011] 196 taxmann 329 (Bom.HC) viii. CIT vs. D.S.Gopta Gowda reported in 34 tamxan 154 (Kol.HC) ix. Pravardhan Seeds Pvt.Ltd. vide ITA No.667/Hyd/2017 (ITAT.Hyd) x. Visu International Ltd. vide ITA No.394/Hyd/2017 (ITAT.Hyd) 10. Referrin....

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....assing the assessment order, there was a failure on the part of the AO. Since, there was no application of mind by the AO, therefore, the ld.PCIT was fully justified in invoking the jurisdiction under section 263 of the I.T.Act 14. We have heard the rival arguments made by both the sides, perused the orders of the AO and ld.PCIT and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the AO in the instant case passed the order u/s. 143(3) on 13.12.2016 determining the total income of the assessee at Rs.62,14,820/- as against the returned income of Rs.58,64,820/- wherein he made addition of Rs.3,50,000/- on adhoc basis due to absence of proper bills and vouchers for various expenses claimed. We find the ld.PCIT invoked the provisions of section 263 of the I.T.Act on the ground that the AO failed to make proper enquiries to verify the difference in the purchases debited at Rs.52,33,65,669/- and the purchases as per VAT returns at Rs.51,80,57,530/- duo to which the difference in the purchases to the tune of Rs.53,08,139/-, remained to be added to the total income of the assessee. Similarly, the assessee has debited in....