2023 (5) TMI 38

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....urnished the requisite information from time to time. The Assessing Officer, after verifying the details filed by the assessee, completed the assessment u/s 143(3) on 13.12.2018 accepting the returned income. 4. Subsequently, the learned PCIT called for the record and noted that the assessee filed his return of income admitting total income at Rs.6,43,040/-. The gross total income of the assessee comprises Rs.Nil from house property, Rs.5,97,000/- from salary, Rs.18,96,125/- from business, Rs. Nil from capital gains and Rs.19,90,573/- from other sources. He noted that the case was selected for complete scrutiny under CASS to verify the "low income from TCS receipts-liquor". However, the Assessing Officer completed the assessment u/s 143(3) of the Act and accepted the returned income of Rs.6,43,040/-. 5. The learned PCIT observed that the assessee is in the business of liquor and for the year relevant to the A.Y 2015-16 he has purchased liquor from the Telangana State Govt. to the tune of Rs.2,21,49,529/- and accordingly has declared loss of Rs.18,96,125/- out of liquor trading activity. According to him, the Assessing Officer ought to have verified the books, purchase bills and s....

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....age 11 & 12 of the Paper Book drew the attention of the Bench to the copy of notice issued u/s 142(1) by the Assessing Officer dated 19.11.2018 and submitted that as per the said notice, the Assessing Officer had asked the assessee to furnish the details of unsecured loans/deposits taken during the year including squared up loans in the given proforma. Referring to page 13 of the paper book, he drew the attention of the Bench to the reply given by the assessee by giving the particulars of the details of unsecured loans. Referring to page 14 of the paper book, he drew the attention of the Bench to the notice issued u/s 142(1) of the I.T. Act where the Assessing Officer has asked complete details of the bank statements and to furnish the cash flow statement to which the assessee furnished the details. Referring to page 9 of the paper book, he drew the attention of the Bench to the details furnished by the assessee before the Assessing Officer such as copy of computation along with ITR Acknowledgement, copy of financials for the A.Y 2016-17, tax audit report/Form 3CD report along with Annexure and the details of Bank A/c held by the assessee. Referring to page 10 of the paper book, he....

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....nn.348) A.P High Court vii) Development Credit Bank (196 Taxmann 329) Bombay High Court viii) D.G. Housing Projects Ltd (20 Taxmann 587) Delhi High Court ix) Divya Jyothi Steels Ltd (20 Taxmann 587) ITAT Hyderabad x) Pravardhan Seeds P Ltd (ITA 667/Hyd/2017) ITAT Hyderabad xi) Futuretech Industries vs. DCIT - ITA No.1009/Hyd/2013 - ITAT Hyderabad xii) Glade Steel (P) Ltd v. Income Tax Officer ITA/723/2015, ITAT Hyderabad xiii) Bhavani Jewellers - ITA 1004/Hyd/2013 - ITAT Hyderabad xiv) Manisha Agri Biotech P Ltd - ITA 233/Hyd/2014, ITAT Hyderabad xv) Zelan Projects : Ltd - ITA No.1361/Hyd/2013 - ITAT Hyderabad xvi) Visu International Ltd - ITA 394/Hyd/2016- ITAT Hyderabad 13. Referring to the decision of the Mumbai bench of the Tribunal in the case of Reliance Payment Solutions Ltd vs. PCIT reported in (2022) 136 Taxmann.com 277, he submitted that the revisional powers u/s 263 cannot be invoked merely because the Assessing Officer did not give specific reasons for accepting assessee's detailed submissions. 14. The learned Counsel for the assessee also relied on the following decisions: a) Sri V. Rajasekhar vs. Income Tax Officer in ITA No.1357/Hyd/2018 - ITA....

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....e scrutiny and the reason was low income, the Assessing Officer should have collected all the relevant details and should have applied his mind before accepting the low income from liquor trade and the introduction of capital for which the order has become erroneous and prejudicial to the interest of the Revenue. 19. It is the submission of the learned Counsel for the assessee that the Assessing Officer during the course of assessment proceedings had called for the requisite details and the assessee has filed the relevant material before the Assessing Officer. The Assessing Officer after going through the relevant details has accepted the returned income and therefore, the order is neither erroneous nor prejudicial to the interest of the Revenue and therefore, the PCIT should not have invoked the jurisdiction u/s 263 of the I.T. Act. It is also his submission that the PCIT cannot direct the Assessing Officer to conduct inquiries in a particular manner and forcibly arrive at a profit which the assessee has never earned. 20. We find some force in the above argument of the learned Counsel for the assessee in so far as the first issue is concerned i.e. low income from liquor business....

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....o redo the assessment without pointing out the errors committed by the AO and without giving a finding as to how the assessment order is erroneous. From the literal reading of the order u/s 263, we find that the CIT pointed out certain discrepancies and then subsequently reproduced the assessee's submissions and then directed the AO to redo the assessment. Thus, there is no finding whatsoever, as to whether the assessee's contentions were acceptable to him or not and as to how the assessment order is erroneous. Therefore, the revision order passed by the Pr. CIT is not sustainable. The assessee's appeal is accordingly allowed. 23. Since in the instant case, the assessee has furnished the requisite details to substantiate its low income from liquor business and the Assessing Officer, after considering the details, has taken a possible view, therefore, the learned PCIT, in our opinion, is not justified in invoking the jurisdiction u/s 263 of the I.T. Act. Further the Coordinate Benches of the Tribunal as pointed out by the learned PCIT are adopting profit rate of 3% to 5% profit from liquor trade only when the books are rejected. However, in the instant case, the books of account, w....