AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (11) TMI 1109
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....ame ought to be quashed and set aside. 2. That under the facts and circumstances of the case and in law, the Ld. PCIT in passing the order under section 263 of the Act, was unjustified and erred in setting aside the assessment order under section 143(3) of the Act passed by the Assessing Officer, and the same ought to be quashed and set aside. 3. That under the facts and circumstances of the case and in law, the Ld. PCIT in passing the order under section 263 of the Act and having made observations adverse to the assesse therein, was unjustified and erred in directing the Assessing Officer to frame the assessment afresh, and the same ought to be quashed and set aside. 4. That the above grounds of appeal are without prejudice to one another; and 5. The Appellant craves leave to add, modify or delete any of the above grounds of appeal at the time of hearing." 3. Brief facts of the case are that the assessee is a private limited company. The assessee declared loss at Rs.1,42,78,245/- in the e-return filed on 04/11/2017. The assessee's case was selected for scrutiny and assessment u/s 143(3) of the Act was framed on 29/12/2019, wherein the ld. Ass....
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....course of revisionary proceedings, the assessee's contention was that the alleged sum received by the assessee from M/s Dewars Garage Insurance Agencies Pvt Ltd. (M/s. DGIAPL) at Rs. 12,39,56,758/- is not in the nature of loans but they are business transactions carried out in the course selling cars of Maruti Suzuki. Relevant portion of the submissions made by the ld. Pr. CIT is extracted for ready reference:- "3. The reason for opening under section 263 of the Income Tax Act at present is stated as under - That M/s. Dewars Garagc Garage Limited received a sum of Rs. 12,39,56,758/- on account of Loan and Advances from M/s. Dewars Garage Insurance Agencies Pvt. Limited on examination of the Balarnce Sheet of M/s. Dewars Garage Insurance Agencies Pvt. Limited, it is observed that the said company is a private limited company where public were not substantially interested as per provision of Section 2(18) of the Act. It is further observed that you M/s. Dewars Garage Limited were holding 19% of its total equity shares of M/s. Dewars Garage insurance Agencies Pvt. Limited. I, is also observed that the closing balance of reserve and surplus in the Balance Sheet of M/s....
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.... it was paid to the assessee which in turn paid to the Maruti Auto Debit Account and sometimes the assessee paid to Maruti Auto Debit Account on its own and this was reimbursed by DGIAPL, as per business needs. Hence there is a running account between the two Companies as per business needs as one Company is facilitating the other Company for carrying on these business objects. Hence there are no loans or advance but expenses and amount given for business. Also the assessee has taken properties for running its business (showroom etc.) from DGIAPL on rent and therefore paid rent and deposits for the same. Some deposit against rent has also been returned by DGIAPL to DGL during the year." 5. However, the ld. Pr. CIT did not find any merit in the submissions filed by the assessee and he referred to the tax audit report in Clause 31(a) of Form 3CD wherein, in the list of loans or deposits exceeding Rs.20,000/-, taken or accepted during the year, the Auditor has mentioned the details of loans of Rs.12,39,56,758/-. Since the submission of the assessee were in contradiction to the report of the auditor, the ld. Pr. CIT came to the conclusion that the assessment order dt. 29/12....
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....n can be subject to the levy penalty u/s 271D of the Act which is a sum equal to the amount of loan or deposit or a specified sum so taken or accepted. The purpose of clause 31(a) in Form 3CD is that the auditor who examines the books of account has to fill up the details of all the loans are deposits taken or accepted during the year and in the remarks column it has to mention that whether it is in a mode otherwise than by account payee cheque/bank transfer/account payee demand draft. Further in the very same detail those loan accounts which are repaid/squared off during the year are also needed to be provided as there may be a situation that loan taken during the year has been repaid and it is not appearing in the closing balance of the unsecured loan at the close of the year. Such details are further helpful to the assessing officer while conducting the scrutiny proceedings and with the details provided by the auditor it is easy for the assessing officer to examine the transactions of loans or deposits taken during the year and the applicability of provisions of Section 68 of the Act. 9.1. In the instant case, the auditor has provided all these details in the audit report of ....
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....-tax Officer on the basis of the directions issued by the 91[Joint] Commissioner under section 144A; (ii) an order made by the 91[Joint] Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer 89a[or the Transfer Pricing Officer, as the case may be,] conferred on, or assigned to, him under the orders or directions issued by the Board or by the 92[Principal Chief Commissioner or] Chief Commissioner or 92[Principal Director General or] Director General or 92[Principal Commissioner or] Commissioner authorised by the Board in this behalf under section 120; 92a [ (iii) an order under section 92CA by the Transfer Pricing Officer; ] (b) 93"record" 94[shall include and shall be deemed always to have included] all records relating to any proceeding under this Act available at the time of examination by the 92[Principal 95[Chief Commissioner or Chief Commissioner or Principal] Commissioner or] Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer 92a[or the Transfer Pricing Officer, as the case may be,] had been the subject matter96 of any appeal 97[filed on or be....