TMI Blog2022 (1) TMI 940X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no loss to the revenue inasmuch as the issue is tax neutral. - Pr.CIT was not justified in treating the assessment order as erroneous and prejudicial to the interest of the Revenue on this score. Disallowance of Transport Expenses u/s.40(a)(ia) on account of failure to deduct TDS u/s. 194C - Even though the AO did not make a mention of the issue in the assessment order, the same cannot be considered as prejudicial to the interest of the Revenue because the provisions of sub-section (6) of section 194C did not require deduction of tax at source. The position so stated before the ld. Pr.CIT, giving all the necessary details which have been tabulated in the impugned order, has not been controverted in any manner. We, therefore, hold that the ld. Pr.CIT was not justified in exercising the revisionary power on this issue because the twin conditions for revision were not satisfied. Mismatch of Sales Turnover - Even though there is a mistake in mentioning the figure of turnover in Tax Audit report but that mistake does not affect the total income inasmuch as the amount of profit shown in the Profit and loss account has been considered for the purposes of computation of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment order. We, therefore, set-aside the same. - Decided in favour of assessee. - ITA No. 156/PUN/2021 - - - Dated:- 20-1-2022 - Shri R.S. Syal, Vice President And Shri S.S. Viswanethra Ravi, Judicial Member For the Assessee : Shri Pratik Sandbhor For the Revenue : Shri Mohit Jain ORDER PER R.S.SYAL, VP : This appeal by the assessee arises out of the order dated 19- 03-2021 passed by the Principal CIT, Nashik-1 u/s.263 of the Income-tax Act, 1961 (hereinafter also called the Act ) in relation to the assessment year 2015-16. 2. Briefly stated, the facts of the case are that the assessee is engaged in the business of sale of Tractors, Tractor parts, Two wheelers and spare parts etc. The assessee filed its return declaring total income at ₹ 32,37,270/-. The assessment was finalized at the same income. Invoking the powers u/s.263, the ld. Pr. CIT held the assessment order to be erroneous and prejudicial to the interest of the Revenue on the five counts, namely, (i) Disallowance of Professional Fees at ₹ 73,000/- u/s.40(a)(ia) for non-deduction of tax at source u/s.194J; (ii) Disallowance of Transport Expenses of ₹ 37,19,441/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. CIT held the assessment order to be erroneous and prejudicial to the interest of the Revenue on the ground that the AO did not examine this aspect. 5.2. It can be seen that none of the individual items of payments or aggregate to one party exceeds ₹ 30,000/-. Once the position is such, the case gets covered under the first proviso to section 194J(1), requiring no deduction of tax at source on professional fees or technical fees in terms of section 194J. The ld. Pr.CIT, without controverting the factual position stated before him, failed to consider that the assessee was, in fact, not required to deduct tax at source in view of the first proviso to section 194J. When the AO impliedly accepted the assessee s contention, the assessment order cannot be held as prejudicial to the interest of the Revenue inasmuch as there is no loss to the Revenue warranting disallowance u/s.40(a)(ia) of the Act. The assessment order may be termed as erroneous from the standpoint of the ld. Pr.CIT for not having discussed the issue in the assessment order, but it cannot be branded as prejudicial to the interest of the Revenue because there is no loss to the revenue inasmuch as the issue is ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not verified by the AO. In response, the assessee submitted before the ld. Pr.CIT that the sales turnover declared in the return at ₹ 38,74,74,192/- matched with the actual turnover. Not convinced, the ld. Pr.CIT held the assessment order liable for revision because the AO did not examine this fact. 7.2 We have gone through the relevant material in this regard. Page 33 of the paper book is a copy of Annexure 1 Part B of the Tax Audit report in which the amount of turnover has been shown at ₹ 40,47,36,750/-. As against that, the amount of turnover as per the Trading Account, appearing at page 8 of the paper book, has been declared at ₹ 38,74,74,192/-. It is this latter amount of turnover which has been actually considered for the purposes of computation of total income. Even though there is a mistake in mentioning the figure of turnover in Tax Audit report but that mistake does not affect the total income inasmuch as the amount of profit shown in the Profit and loss account has been considered for the purposes of computation of total income. In fact, the same audit report having Annexure 1 Part B gives the amount of net profit/loss to be taxed as per the Prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use the AO did not conduct any inquiry on this issue. 9.2. We have gone through the copy of Interest account from the assesse s ledger which has been placed at pages 102 and 103 of the paper book. It can be seen that the amount of interest on income-tax refund at ₹ 24,969/- has been duly credited on 16- 07-2014. The total closing balance from such account at ₹ 10,27,788/- has been taken to the Profit and loss account which has been considered for declaring the income chargeable to tax. Under these circumstances, we fail to appreciate as to how the assessment order can be termed as prejudicial to the interest of the Revenue when the assessee disclosed the amount of interest on income-tax refund in its interest income account. 10. On all the five reasons given by the ld. Pr.CIT for holding the assessment order as erroneous and prejudicial to the interest of the Revenue, we find that none of them justifies the revision because the ld. Pr.CIT, even though observed that the assessment order did not discuss these issues, but failed to point out as to how it was prejudicial to the interest of the Revenue. All these fives items are of such a nature that either no disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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