Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2011 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (6) TMI 683 - AT - Income TaxRe-opening of Assessment by AO - AO reopened the assessment proceedings solely on the basis of statement made by director before the Central excise authorities in the context of levy of excise duty on unaccounted production - HELD THAT:- As held by the hon'ble High Court in the case of COMMISSIONER OF INCOME-TAX VERSUS KS BHATIA. [2001 (8) TMI 21 - PUNJAB AND HARYANA HIGH COURT], proceedings under the Central Excise Act have relevance only for formation of opinion of escapement of income and thereafter the income-tax authorities have to independently finalise the reassessment irrespective of the final view in excise proceedings. We find that the AO has reassessed the income and made the impugned additions solely on the basis of the information received by him from the Central Excise Department without bringing any material on record to justify or support the additions. Besides, the statement of said director has several gaps on material issues. Therefore, the impugned additions are liable to be cancelled and are accordingly cancelled. Unexplained Expenditure for Purchase of Raw Material u/s 69C - AO estimated unexplained expenditure towards purchase of raw materials on the ground that it must have been utilised in producing 624 mts. of unaccounted goods - HELD THAT:- The Assessing Officer has made the impugned additions under section 69C. We have already deleted the addition made by the Assessing Officer with reference to unaccounted production and sale of 624 mts of steel ingots, In this view of the matter, the impugned additions cannot be sustained. The order of the Commissioner of Income-tax (Appeals) deleting the impugned addition is therefore confirmed. Revisional Power of Commissioner u/s 263 - AO made the additions in the AY 2004-05 on the basis of the statement of director so as to maintain consistency in the stand of the Department in both assessment years - HELD THAT:- Pre-requisite to the exercise of jurisdiction by the learned Commissioner of Income-tax suo motu u/s 263 is that the order of the AO is erroneous in so far as it is prejudicial to the interests of the Revenue. The Commissioner has to be satisfied of both the conditions. It has been held in MALABAR INDUSTRIAL CO. LTD. VERSUS COMMISSIONER OF INCOME-TAX [2000 (2) TMI 10 - SUPREME COURT], that section 263 cannot be invoked to correct each and every type of error committed by the AO. It is only when an order is erroneous in so far as it is prejudicial to the interests of the Revenue that section 263 will be attracted. On the basis of facts of the case and on perusal of directions given by the Additional Commissioner of Income-tax shows that he has duly considered and dealt with all the relevant aspects of the case. In the directions issued by him. It cannot therefore be said that the directions given by the Additional Commissioner are without inquiries or application of mind. Thus, the order passed by the learned Commissioner of Income-tax under section 263 is cancelled.
|