TaxTMI 
TaxTMI 
TaxTMI 
2023 (10) TMI 261
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....ner of Income-tax has erred in observing that order passed by assessing officer u/s 143(3) of the Act is erroneous on the ground that assessing officer ought to have inquired the issue of utilization of cash of Rs. 3,84,00,000/- by the company and examined the violation of section 40A(3)/269T of the Act when in fact said amount is not expended during the year but disclosed on assets side of balance sheet. 3. It is therefore prayed that order passed by Pr. Commissioner of Income-tax u/s 263 of the I.T. Act setting aside the order of assessing officer and directing assessing officer to pass fresh assessment order may please be quashed. 4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal." 2. Brief facts, as discernible from the orders of lower authorities are that assessee-company (M/s. Raremat Mall Management Company Pvt. Ltd.) had filed its return of income for assessment year (AY) 2017-18, on 07.11.2017, declaring returned loss of Rs. 2,73,097/-. The assessee`s case was selected for complete scrutiny and the scrutiny assessment under section 143(3) of the Act, was completed on 25/12/2019, determining total as....
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....e facts. For a better and clear understanding of the case, we will like to put before your Good Self the following facts of the case which were already mentioned and elaborated during the assessment proceedings: Raremat Mall Management Private Limited is a private limited company engaged in the business of managing the day to day affairs and running the Rahulraj Mall at Surat. It used to collect the maintenance charges from the tenants and owners of the shops at Rahul Raj Mall Surat and take care of the routine management of the mall viz power supply, security, housekeeping, repair and maintenance etc. The difference between the collection of charges and the expenses incurred was income of the company, and the company paid tax on the same. But, due to non-payment of maintenance charges by the owners of vacant shops and even occupied shops for a long period of time, the company was incurring losses and eventually had to shut down its operations with accumulated losses. The funds already collected in earlier financial years, on which tax was already paid, were being used to meet the expenses of the F.Y. 2016-17 and onwards. The funds sent to the Mall Management Office was debit....
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.... of the income Tax Act." 5. However, ld PCIT rejected the contention of the assessee and observed that reply of the assessee to the effect that assessing officer (AO) has inquired and verified the matter was not acceptable. The reason is that no query has been raised in this regard by the assessing officer, during the assessment stage. The assessing officer had called for 'cashbook' to inquire into the issue of cash deposit in the bank accounts during the period 08.11.2016 to 31.12.2016, and the said issue is a different issue than the issue raised by ld PCIT. Further, the assessee has submitted that cash of Rs. 3,84,00,000/- were transferred from main cash book to Raremat Mall Management Office account, for the purpose of incurring expenses. It was also submitted that total balance of Rs. 3,84,00,000/- was shown as part of current assets in balance sheet and the amount was not expended but was shown as current asset in Balance-Sheet of F.Y.2016-17. From balance-sheet, current assets are shown at Rs. 2,35,05,982/- is 'on account of short term loans and advance', therefore, ld PCIT note that the submission of the assessee is not correct. 6. The ld PCIT further observed tha....
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....nt office, is the office of the assessee -company itself, hence there is no violation of section 40A(3)/section 269T of the Act. It is like transfer of money from one pocket to another pocket by an individual. The learned counsel for the assessee further submitted that during the course of assessment, the assessing officer has issued notice under section 142(1) of the Act, and in that notice the assessing officer has raised the same issue as raised by ld PCIT. In response to the notice of the assessing officer, the assessee has submitted its reply and therefore there was a sufficient compliance, that is, the assessing officer has examined the issue raised by PCIT. Therefore, it is not a case of no enquiry. The ld Counsel further stated that it is own money of the assessee-company, which has been transferred to his own office, called, Raremat Mall Management office. The ld Counsel also stated that an explanation has been offered by the assessee during the assessment stage, regarding the nature and purpose of such cash payments and how the cash received by the Raremat Mall Management office has been utilized. Therefore, ld Counsel contended that order passed by the assessing officer ....
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....ng in Trading account and profit & loss account, where there is a variation in excess of 25% of such expenses of receipt to total turnover (either by way of expenses or reduction) in comparison to last year. The comparative details may be furnished in the following format: S. No. Expenses & Receipts in Trading P&L A/c in A.Y.2016-17 Expenses & Receipts in Trading & P&L A/c in AY.2017-18 12. We note that Assessing Officer has also issued further notice under section 142(1) of the Act, dated 04.12.2019, wherein assessing officer (AO) has asked the assessee to submit month-wise details of cash sales for the financial year 2015-16 and month-wise details of cash sales for the financial year 2016-17 relevant to assessment year 2017-18. The assessing officer also asked the assessee to submit cash book for the assessment year 2017-18. The assessing officer also asked the assessee to submit Sales Tax return and VAT return and other returns filed under the Income Tax Act. In response to this, the assessee has submitted its reply, which is placed in the paper book at page nos.17 to 23. We note that with help of these documents and details, the assessing officer h....