2024 (4) TMI 50
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.... the total income at Rs. 4,97,740/-. The additions made in the said assessment included - (a) Undisclosed receipt - Rs. 2,53,280/- (b) Disallowance of expenditure on estimated basis - Rs. 1,94,905/- (c) Donation received - Rs. 35,000/- (d) Difference in PF & ESI actually paid and debited in P&L Account - Rs. 24,554/- 3.1. Subsequent to the said assessment, Ld. Pr. CIT on examination of the assessment records observed that Ld. AO has completed the assessment without making enquiries, verifications and examination of the following three items - (i) In the Note No. 3(b) and 3(b)(a) of the Balance Sheet as on 31.03.2016, an amount of Rs. 32 lakh was shown as unsecured loan from Shri U. P. Singh whereas in the written submissions furnished by the assessee, the name of Jyotipunj Educational Welfare was mentioned against the said unsecured loan. (ii) In the Note No. 13 of Balance sheet as on 31.03.2016, opening stock of Rs. 7,29,71,920/- was shown while the closing stock for the preceding year was shown at Rs. 7,87,68,920/-. Thus, there was a difference of Rs. 57,96,973/- which remained unreconciled. (iii) In clause 20(b) of the tax audit report in Form 3CD, details....
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....n during the year under consideration, no other query was raised by the Ld. AO. It is not a case of lack of enquiry on the part of Ld. AO. 4.2. On the second issue relating to difference in stock, ld. Counsel submitted that this issue was looked into by the Ld. AO in the course of assessment proceeding by making relevant enquiry. He referred to the annexure forming part of notice issued u/s. 142(1) dated 15.01.2018. According to Ld. Counsel, Ld. Pr. CIT has misinterpreted in the notes to the Balance Sheet where details of inventory is mentioned which are closing stocks of the year at Rs. 7,87,68,893/-. However, in the sub-notes 13 of the Balance Sheet, details of Rs. 7,29,71,920/- under the head of raw material and WIP are only given. The difference amount of Rs. 57,96,973/- pertains to finished goods which are not mentioned in the sub-notes because there was no change in the said amount during the year under consideration. Since there was change in the amount of raw material and WIP only, therefore, details of these were only mentioned in the sub-notes. According to him, sub-notes formed part of the notes to the Balance sheet. Ld. Pr. CIT has thus misinterpreted/misread the detai....
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.... ld. AO to arrive at fresh conclusion. Assessee itself has accepted incurrence of mistake of reporting a wrong name for the unsecured loan which demonstrates that the Assessing Officer has not examined the issues properly. 6. We have heard the rival contentions and perused the material available on record. We take note of the fact that revisionary proceedings were initiated by raising three issues in the show cause notice and were concluded for which direction was given to the Ld. AO to pass an order afresh de novo. 6.1. We observe that Ld. CIT has not applied his mind to arrive at a consideration which is erroneous in so far as prejudicial to the interest of revenue for passing the impugned order u/s. 263 of the Act. We observe that in the course of proceeding u/s. 263 of the Act, assessee had furnished the relevant details and explained the issues raised through the show cause notice, supporting its contentions by corroborative documentary evidence. It is well settled law that for invoking the provisions of section 263 of the Act, both the conditions that the order must be erroneous and prejudicial to the interest of revenue needs to be satisfied. This ratio stands laid down by....
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....himself decide that order is erroneous, by conducting necessary enquiry, if required and necessary before the order u/s 263 of the Act is passed. In such cases, the order of the AO will be erroneous because the order passed is not sustainable in law and the said finding must be recorded by CIT who cannot remand the matter to the assessing officer to decide whether the findings recorded are erroneous. 6.3.2. In cases where there is inadequate enquiry but not lack of enquiry, again the CIT must give and record a finding that the order/enquiry made is erroneous. This can happen if an enquiry and verification is conducted by the CIT and he is able to establish and show the error or mistake made by the AO, making the order unsustainable in law. 6.3.3. In some cases, possibly though rarely, the CIT can also show and establish that the facts on record or inferences drawn from facts on record per se justified and mandated further enquiry or investigation but the AO had erroneously not undertaken the same. However, the said finding must be clear, unambiguous and not debatable. The matter cannot be remitted for a fresh decision to the AO to conduct further enquiries without a finding that ....